FOURTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
) 
7 
J&j 30 j',j 
> 
First Regular Session 
1 
) 
S.B. No. 
SENAT%% 
-- 
1.: 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to establish a governmental body that would oversee and 
implement the growth and development of one of the largest lakes in the Philippines, 
Lake Lanao in Lanao del Sur. 
Lake Lanao is the second largest freshwater lake in the Philippines. It is located 
in the Province of Lanao del Sur, at 701.35 meters above sea level. It has an area of 
354.60 square kilometers and a mean depth of 60 meters, with the deepest part at 112 
meters. The lake was formed by the tectonic-volcanic damming of a basin between two 
mountain ranges and the collapse of a large volcano. The basin is shallowest towards 
the north and gets progressively deeper towards the south. 
The lake is home to 18 endemic species of freshwater fish and supports a large 
number of waterfowl. The lake is fed by four rivers. Its only outlet is the Agus River, 
which flows southwest into Iligan Bay via two channels, one over the Maria Cristina 
Falls and the other over the Linamon Falls. A hydroelectric plant installed on the Lanao 
Lake and Agus River system generates 70% of the electricity used by the people of 
Mindanao. Lake Lanao is also a major source of livelihood among fisherfolks in the 
surrounding cities and municipalities of the lake. 
Because of its economic benefits and environmental importance to the people of 
Lanao, it is important that we ensure the proper utilization, sustainable development 
and preservation of Lake Lanao. This proposed measure seeks to do that by creating a 
centralized governmental agency tasked to oversee and implement the over-all 
development of Lake Lanao and its surrounding areas. 
The Lake Lanao Development Authority shall make and implement a 
comprehensive development plan designed to promote the rapid social and economic 
development of Lake Lanao. The Authority shall be governed by a Board of Directors 
who shall exercise the corporate powers granted under this bill. Moreover, the 
Authority is tasked to establish research centers to undertake studies on the marine and 
natural resources of Lake Lanao for policy or plan formulation. Finally, the Authority 
shall be exempt from taxes imposed by the national government to allow it to maximize 
the use of its funds for the development of Lake Lanao. 
In view of the foregoing, immediate passage of this bill is earnestly sought. 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
1 
9 JlJN 30 P4 2 
) 
First Regular Session 
) 
Introduced by Senator Loren Legarda 
AN ACT 
CREATING THE LAKE LANA0 DEVELOPMENT AUTHORITY, DEFINING ITS 
POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Title. - This Act shall be known as the "Lake Lanao Development 
Authority of 2007". 
SEC. 2. Declaration of Policy - It is hereby declared a policy of the State to 
promote and accelerate the development and balanced growth of Lake Lanao and its 
surrounding cities and municipalities, within the context of national plans and policies 
for sustainable development, with due regard and adequate provisions for 
environmental management and control, preservation of the quality of human life and 
ecological systems, and the prevention of undue ecological disturbances, deterioration 
and pollution. 
For purposes of this act, the Lake Lanao Development Authority created under 
Section 3 of this Act shall identify the surrounding cities and municipalities, which shall 
be known as the "Area". 
SEC. 3. Creation of the Lake Lanao Development Authority. - To effectively 
carry out the declared policy, there is hereby created under the Office of the President 
of the Philippines, a body corporate to be known as the Lake Lanao Development 
Authority hereinafter referred to as the Authority. 
SEC. 4. Powers and Functions of the Authority. - The Authority shall have the 
following purposes and functions: 
(a) 
To make a comprehensive survey of the physical and natural resources and 
potentialities of Lake Lanao and the Area, particularly its social and economic 
conditions, hydrologic characteristics, power potentials, scenic and tourist 
spots, conservation of water resources and such other areas of concerns, and 
on the basis thereof, to craft a comprehensive and detailed Lake Lanao 
Development Plan to promote its rapid social and economic development; 
Prmided, that, the implementation of all fisheries plans and programs of the 
Authority shall require prior consultation with the Bureau of Aquatic 
Resources to ensure that such plans and programs are consistent with 
national fisheries plans and programs; 


(b) 
To pass upon and approve all plans, programs and projects proposed by local 
government units, public corporations and private entities that is related to 
the utilization of the resources and the development of Lake Lanao and the 
Area, and monitor the proper implementation of said plans, programs and 
projects, consistent with the objectives and purposes of this Act. With 
mandatory prior consultation with the Deparhnent of Environment and 
Natural Resources (DENR), the Authority shall issue the necessary permit for 
approved plans, programs and projects, Provided, That, any application for 
permit that has been disapproved by the Authority may be appealed to the 
Office of the President within fifteen (15) days from receipt of such 
disapproval, whose decision shall be final; 
To harness and promote private participation in business ventures in terms of 
capital expenditures, land, expertise, financing and their facilities for the 
development and growth of the Area; 
To plan, program, finance and/or undertake infrastructure projects such as 
river, flood and tide control works, waster water and sewerage works, water 
supply, roads, pot works, irrigation, housing and related works when so 
required within the context of its development plans and programs, including 
the readjustment; relocation or restoration, or resettlement of population, as 
may be deemed necessary and beneficial by the Authority: Provided, Thaf, 
should any project be financed wholly or in part by the Authority, it is hereby 
authorized to collect reasonable fees and tolIs as may be fixed by its Board of 
Directors fi-om users and/or beneficiaries thereof to recover costs of 
construction, operation and maintenance of the projects: Provided, Further, 
That if the Authority should find it necessary to undertake such 
infrastructure project as social overhead capital projects, the Authority shall 
be authorized to receive financial assistance from the government and foreign 
donors, subject to such terms and conditions that may be imposed by the 
Government; 
(c) 
(d) 
(e) 
To reclaim or cause to be reclaimed portions of Lake Lanao or undertake 
reclamation projects and/or acquire such bodies of land from the Lake which 
may be necessary to accomplish the aims and purposes of the Authority; 
Provided, That, the land so reclaimed shall be the property of the Authority 
and title thereto shall be vested in the Authority: Provided, further, That the 
resulting lakeshore area shall continue to be owned by the National 
Government; 
(Q 
To establish research centers to undertake studies on the marine and other 
natural resources of Lake Lanao for policy or plan formation and project 
implementation; 
To exercise exclusive jurisdiction to issue new permit for the use of the lake 
waters for any projects, including navigation, construction, operation of fish 
pens, fish enclosures, fish corral and the like, and to impose necessary 
safeguard for lake quality control and management and to collect necessary 
fees for said activities and projects: Provided, That, the Authority's Board may 
determine new areas of fishery development or activities, taking into account 
the over-all development plans and programs for Lake Lanao: Provided, 
furtlzer, that the Authority shall, subject to the approval of the President of the 
Philippines, promulgate such rules and regulations which shall govern 
(g) 


fisheries development activities in Lake Lanao, including the advisability of 
placing the supervision of said activities under the Bureau of Fisheries and 
Aquatic Resources of the local government units in the Area; 
To require the cities and municipalities embraced within the area to pass 
appropriate zoning ordinances and regulatory measures to carry out the 
objectives of the Authority and to enforce the same with the assistance of the 
Authority; 
The provisions of existing laws to the contrary notwithstanding, to exercise 
water rights over public water within the Lake Lanao area whenever 
necessary to carry out the Authority’s projects; 
To promulgate and establish, in coordination with the Department of 
Environment and Natural Resources and other existing government agencies, 
water quality standards for industrial, agricultural and municipal waste 
discharges into the Lake and to ensure the cooperation of said existing 
agencies of the Government in enforcing such standards; and 
To undertake studies on the improvement and maintenance of the desirable 
water quality of Lake Lanao, and in pursuance thereof, prepare a water 
quality management program on a continuing basis, which the Authority 
shall carry out with the assistance and support of the national and local 
government units involved in water quality management. 
Sec. 5. Corporate Powers - The Authority shall exercise the following powers 
and functions: 
a. To sue and be sued; 
b. To adopt and use a corporate seal with judicial notice; 
c. To undertake the programs and projects specified in Section 4 hereof; 
d. To engage in agricultural, industrial and commercial or other activities 
necessary or directly contributory to the socio-economic development of 
the Area, and, for this purpose, whether by itself or in cooperation with 
private entities, to organize, finance, invest in, and operate subsidiary 
corporations: Provi&d, That, the Authority shall engage only, unless public 
interest requires otherwise, in those activities as are in the nature of new 
ventures or are clearly beyond the scope, capacity or interest of private 
enterprises; 
e. To invest in or otherwise acquire, own, hold, use, operate, sell, assign, 
transfer, exchange, mortgage, pledge, lease, develop or otherwise deal in, 
real property of every kind and description, including shares of stock, 
bonds, debentures, notes, evidence of indebtedness, and other securities; 
f. To exercise the right of eminent domain or acquire by purchase, privately- 
owned land within the area for purposes of implementing projects of the 
Authority; 
g. To borrow funds from any local or foreign financial institutions 
independent of the bonds it may issue to carry out the purposes of the 
authority; 
h. To acquire, lease, or own such property or assets in whatever form and 
serve as the custodian of such properties or assets, real or movable, and 
sell or otherwise dispose of the same as the Authority may deem it 
necessary in the pursuit of its aims, objectives and purposes; 


i. To lend or facilitate the extension of financial assistance and/or act as 
surety or guarantor to worthwhile agricultural, industrial and commercial 
enterprises; 
To accept grants, donations, gifts, bequests, funds and/or properties in 
whatever form and whatever source in coordination with the appropriate 
agency and administer the same in accordance with the terms thereof, or 
in the absence of any condition, in such manner consistent with the policy, 
aims and objectives of the Authority provided for in this Act; 
k. To enter into a contract of any kind and description to enable it to carry 
out its purposes and objectives; 
1. To issue such rules and regulations as may be necessary to effectively 
carry out the powers and purposes herein provided, including plans, 
programs and projects of the Authority, the same to take effect thirty (30) 
days after publication thereof, in a newspaper of general circulation; and 
m. For the purposes of attaining or in furtherance of any of its objectives, to 
perform any and all acts which a corporation, co-partnership, or natural 
person is authorized to perform under the laws existing or which may be 
enacted hereafter. 
j. 
Sec. 6. Capitalization - The Authority shall have an authorized capital of two 
billion pesos (2,000,000,000 Php) no par value shares, of which the amount of one billion 
pesos (1,000,000,000 Php) shall be subscribed by the provinces, cities, and municipalities 
in the Area and at least twenty-five percent (25%) shall be subscribed by the National 
Government. 
Sec. 7. Power to Incur Debts and to Issue Bonds - Whenever the Board of 
Directors may deem it necessary for the Authority to incur an indebtedness or to issue 
bonds to carry out the provisions of this Act, it shall, by resolution, so declare and state 
the purposes for which the proposed debt is to be incurred. The resolution shall be 
passed by the affirmative vote of at least four (4) members of the Board and approved 
by the President of the Philippines upon the recommendation of the Secretary of 
Finance in consultation with the National Economic Development Authority (NEDA) 
and the Monetary Board. 
Sec. 8. Tax Exemption - The Authority shall be exempt from payment of all taxes 
imposed by the National Government, its provinces, cities, municipalities and other 
government agencies and instrumentalities: Pro&ded, That, its subsidiary corporations 
shall be subject to all said taxes five (5) years after their establishment under a 
graduated scale. Such exemption shall include any tax or fee imposed by the 
Government on the sale, purchase or transfer of foreign exchange and all notes, bonds, 
and debentures, and other obligations issued by the Authority, both as to the principal 
and interest. 
Sec. 9. Governing Body - The corporate powers and functions of the Authority 
shall be vested in and exercised by a Board of Directors, hereinafter referred to as the 
Board, which shall be composed of a Chairman and six (6) members, to be appointed by 
the President of the Philippines who shall serve for a term of six (6) years, unless sooner 
removed from or is incapacitated to perform functions of the office; Provided, That, a 
majority of the members of the Board must be residents of Lanao del Sur and Lanao del 
Norte. 
In case of any vacancy in the Board, the same shall be filled by the President of 
the Philippines for the unexpired term. 


No person shall be appointed as Chairman or member of the Board, or as 
General Manager, unless he is a natural-born citizen of the Philippines, at least thirty 
(30) years of age and of proven probity and integrity. In addition, the General Manager 
shall likewise have demonstrated executive competence and experience in the field of 
public administration or the management of agricultural, industrial or commercial 
enterprises and knowledgeable of the socioeconomic conditions of Lake Lanao and its 
surrounding cities and municipalities. 
Sec. 10. Prohibition against Conflict of Interest - No member of the Board shall be 
financially interested, directly or indirectly, in any contract entered into by the 
Authority or in any special privilege granted by the Authority during his term of office. 
All contracts entered into in violation of the provision of this Section shall, by two- 
thirds (2/3) vote of the Board, automatically be disqualified from serving his unexpired 
term, and he shall furthermore be perpetually disqualified for membership in the said 
Board. 
Sec. 11. Compensation - The General Manager shall receive compensation in 
accordance with the Compensation and Position Classification Act of 1998 and shall not 
engage in any business, calling or profession during his term of office other than those 
connected with the performance of his official functions and duties. 
The members of the Board shall receive, for every meeting actually attended, a 
per diem of two thousand pesos (2,000 Php): Provided, fhat, such per diem shall not 
exceed six thousand pesos (6,000 Php) during any month for each member. Members of 
the Board shall be reimbursed by the Authority for actual expenses (including traveling 
and subsistence expenses) incurred by them in the performance of their duties for the 
Authority as may be specifically authorized by the Board. 
Sec. 12. Quorum - The presence of four (4) members of the Board, including the 
Chairman or Vice-chairman, shall constitute a quorum for the transaction of the 
business of the Board. 
Sec. 13. Meetings of the Board - The Board shall meet preferably at its principal 
office at least once a month and as frequently as necessary to discharge its duties and 
responsibilities properly. The Board shall be convened by the Chairman or upon the 
written q u e s t  of a majority of its members. Except when otherwise provided for in 
this Act, the vote of a majority of the members constituting a quorum shall be sufficient 
for the adoption of any rule, resolution, decision or any act of the Board. 
Sec. 14. Powers and Functions of the Board - The Board shall have the following 
powers and functions: 
a. 
b. 
To formulate, prescribe, amend and repeal rules and regulations to govern 
the conduct of business of the Authority; 
To appoint and fix the compensation of all officials from division heads 
and above, and others of comparable rank, including the Assistant 
General Manager; 
By a majority vote of all members of the Board, suspend, remove or 
otherwise discipline for just cause all officials appointed by the Board; 
To approve the annual and/or supplemental budgets of the Authority; 
To render annual reports to the President and such special reports as may 
be requested; and 
c. 
d. 
e. 


f. 
To do such other acts and perform such other functions as may be 
necessary to carry out the provisions of this Act. 
Sec. 15. Powers and Functions of the General Manager - The General Manager 
shall be the chief executive of the Authority, as such, he or she shall have the following 
powers and functions: 
To submit, for the consideration of the Board, the policies and measures 
which he or she believes to be necessary to carry out the purposes and 
provisions of this Act; 
b. 
Execute and administer the policies, plans, programs and projects 
approved by the Board; 
c. 
Direct and supervise the operation and internal administration of the 
Authority. The General Manager may delegate some of his or her 
administrative responsibilities to other officers of the Authority subject to 
the rules and regulations of the Board; 
Prepare the annual budget of the Authority for the consideration of the 
Board; 
Prepare the plantilla and appoint officials and employees below the rank 
of division heads, to positions in the approved budget upon written 
recommendations of the division head concerned, using as a guide the 
standard set forth and such other reports as may be required; 
Exercise such other powers as may be vested in him by the Board. 
a. 
d. 
e. 
f. 
Sec. 16. Representation of the Authority - The General Manager shall be the 
principal representative of the Authority. He shall be empowered, in such capacity and 
in accordance with the instructions of the Board 
a. To represent the Authority in all dealings with other offices, agencies, and 
instrumentalities of the Government and will all other persons and entities, 
whether public or private domestic, foreign or international; 
b. To sign contracts concluded by the Authority, annual reports, balance sheets, 
profit and loss statements, correspondences and other documents of the 
Authority; and 
c. To represent the Authority, either personally or through counsel, in any legal 
proceedings or actions. 
Sec. 17. Departments - There shall be created the following departments within 
the authority: the Administrative, Legal, Operations, Financial and Management, 
Auditing, Planning and Programming, and such other department as may be necessary 
to effectively carry out the functions of the Authority. The head of each Department 
shall be appointed by the Board upon recommendation of the General Manager, and 
shall receive an annual compensation as may be fixed by the Board. 
Sec. 18. Auditing - The auditing department shall be headed by the duly 
appointed representative of the Commission on Audit whose salary shall be determined 
and paid according to law. All personnel of the auditing department shall be appointed, 
and their number and salaries fixed by the Commission on Audit. 
Sec. 19. Appropriations - The sum of fifty million pesos (50,000,000 Php) 
necessary for the initial operating expenses of the Authority is hereby charged to the 
appropriations authorized for the Regional Development Fund. Thereafter, the sum 


necessary for the continued operation and maintenance of the Authority shall be 
included in the annual budget of the Office of the President 
SEC. 20. 
regulations, and 
provisions of this 
Repealing Clause.- 
All republic acts, executive orders, rules and 
other issuances, or parts thereof, that are inconsistent with the 
Republic Act are hereby repealed or modified accordingly. 
SEC. 21. Separability Clause.- If for any reason or reasons, any part or provision 
of this Act shall be declared or held to be unconstitutional or invalid other parts or 
provisions hereof, which are not affected thereby shall continue to be in full force and 
effect. 
SEC. 22. Effectivity Clause.- This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in at least two (2) national newspapers of general 
circulation. 
Approved,