Republic of the Philippines
HOUSE OF REPRESENTATIVES
16™ Congress
First Regular Session
Quezon City

HOUSE BILL NO. 1878

INTRODUCED BY HONORABLE ANSARUDDIN A.M. A. ADIONG

EXPLANATORY NOTE

This bill seeks to create the Lake Lanao Watershed Development Authority and
Provide Funds Therefor,

Lake Lanao is known to be one of the seventeen (17) ancient lakes in the whole
world, and considered to be one the earth's natural wonders in Asia. It is the second
largest lake in the Philippines. Likewise, Lake Lanao is the most useful lake in the
Philippines. It is highly suitable for fishery development. It is the major source of
hydroelectric power of the island of Mindanao. It is also used to be the habitat of
endemic fish species. It is the pride of the Maranao, the “people of the lake”. It
symbolizes our identity, culture, economy and spirituality.

However, through the years, no practicable measures and unified efforts of
agencies concerned are being implemented to safeguard the ecological balance and
environmental equilibrium of the Lake Lanao area. That is why, there have been various
and growing clamors to save the endangered lake. Endemic fish species already
disappeared. The water quality has deteriorated due to illegal logging, pollution and
other environmental degradation activities in the area. The signs of neglect are now
noticeable.

The lake has been the subject of intent studies. One study shows that there is a
major fault-line that splits the lake's bedrock in a roughly northeast-southwest direction
following the long axis of the lake. This fault-line is a southward extension of the fault-
line which originates from Camiguin Island near Hibok-Hibok Volcano and extends to
about 28 kilometers towards the center of the Lake's bedrock. The late Dr. Mamitua
Saber, formerly Research Professor of the Mindanao State University in Marawi City,
observed that fluctuations in the total weight of the water supported by the lake basin
are undesirable. The fluctuations can cause vertical oscillations of unknown magnitude
and may complicate the fractures in the lake bottom, especially along the immediate
vicinity of the major fault-line. This may result in the production of bottom fissures of
varying magnitudes that may lead somewhere else, not necessarily in the Lake Lanao
area. They could produce leakage and decrease the volume of water in the lake and
consequently lower its water level below the minimum requirements. If these happen,
the power plants will be rendered useless


Hence, the creation of the Lanao Lake Watershed Development Authority will
undoubtedly save and rehabilitate the lake in distress. The preservation and
advancement of the ecological system, environmental conditions, and rich marine
resources of the Lanao Lake area will surely be addressed.

The urgency of the passage of this bill is earnestly sought for.

REP. ANSARUDDIN A.M. A. ADIONG
4 District, Lanao del Sur


Republic of the Philippines
HOUSE OF REPRESENTATIVES
16" Congress
First Regular Session
Quezon City

HOUSE BILL NO. 1878

INTRODUCED BY HONORABLE ANSARUDDIN A.M. A. ADIONG

AN ACT
CREATING THE LAKE LANAO WATERSHED DEVELOPMENT AUTHORITY AND
PROVIDING FUNDS THEREFOR

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 “Lanao Lake Watershed Development
Authority Act of 2013”.

Section 2. Declaration of Policy.- It is hereby declared to be the national policy to
promote, and accelerate the development and balanced growth of the Lake Lanao
Watershed area consistent with the national and regional plans and policies for social
and economic development and to carry out a comprehensive development plan of the
Lake Lanao Watershed area, within the context of adequate provisions for
environmental management and control, preservation of the quality of human life,
environment and ecological systems.

It is further declared to be the policy of the State that the development plan of
Lake Lanao Watershed shall likewise promote higher productivity, increase income,
alleviate poverty, create more employment opportunities, encourage sustainable
development and people empowerment.

Section 3. Creation of Lake Lanao Watershed Development Authority.- For the purpose
of carrying out and effecting the declared policy, as provided for in Section one hereof,
there is hereby created a body corporate to be known as the Lake Lanao Watershed
Development Authority, hereinafter referred to as the Authority, which shall be
organized within one hundred twenty (120) days after the approval of this Act. The
Authority shall execute the powers and functions herein vested and conferred upon it in
such a manner as will aid to the fullest possible extent in carrying out the purposes set
forth below.

Section 4. Supervision. - The Authority shall be under the supervision of the Office of
the President.

Section 5. Territorial jurisdiction.- Except as herein otherwise provided, the Authority
shall cover the Lake Lanao Watershed Area.


Section 6. Principal Office- The principal office of the Authority shall be located in
Marawi City or any of its adjacent municipalities. However, whenever it deems
necessary, it may establish such branches, subsidiaries, offices or agencies, in any
municipality, or barangay in Lanao del Sur or any local government unit within the
territorial jurisdiction of Muslim Mindanao

Section 7. Term. -The Authority shall have a term of fifty (50) years from the effectivity
of this Act renewable for the same period unless otherwise provided by law.

Section 8. Special Powers and Functions. - The Authority shall exercise and perform the
following powers and functions:

1. To gather and collate planning data, research references, statistics, as well as.
their relevant and essential elements, and on the basis of such materials, draft a
wholistic, rational, systematic, comprehensive plan consisting of the short, medium and
long-term programs for the development of the Lake Lanao area, after carefully
evaluating the present social and economic conditions, available resources and
opportunity costs, problems and difficulties, as well as the existing national and regional
policies and plans for the area and providing for such safeguards as are necessary for
ecological balance and environmental protection;

2. To monitor and coordinate the implementation of such plan according to the
Authority’s multi-level and multi-sectoral programs, particularly, such part of the Plan as
will benefit the preservation and conservation of the ecological system, as well as the
protection and advancement of the environmental condition in the area; to preserve life,
protect public health and safety; and to maximize the utilization of the area's spatial land,
manpower resources and indigenous raw materials for agricultural, industrial and
commercial uses; water resources for fisheries and fishing; unique arts, cultural designs
and scenic landscapes for tourism; and to induce and engender higher production,
employment, income, savings and investments in the area for its economic growth and
social progress;

3. To plan and coordinate the establishment of such economic and social
structures as may be necessary for entrepreneurial mobilization as will provide local
traders, craftsmen, farmers, fishermen, and workers access to credit facilities,
equipment and machineries, raw materials and agri-inputs, transportation and
communications, storage and drier, skills training and tax exemptions to fast-track the
development of the area by means of higher productivity in farming, manufacturing,
trading and fishing, stimulate the efficient use of the factors of production;

4. To identify and recommend viable areas which will be given priority industrial
and commercial development, as well as their possible sources of financing, whether
domestic or foreign; to encourage their early utilization and development for economic
growth and expansion through government action or by private initiative; and to promote
the use or appreciation of such modern technology, facilities and equipment, methods
and processes as are available for their maximum and economical use;

5. To adopt workable and long-range policies for the intensification of local
products for export; to sustain agricultural, industrial and commercial development in the
area; to pave the way for the expansion of its domestic market structure; and to support
the internal growth of income and the accumulation of savings for local investment;

6. To encourage people's participation in the organization and development of
cooperatives, nongovernmental organizations, neighborhood organizations and other
groups for the development of livelihood projects and for the economic upliftment and
amelioration of the members thereof through entrepreneurship development and the


provision of such technical and financial aids, as may be necessary, to make them self-
supporting, self-sustaining or self-reliant economic entities, especially such sectoral
livelihood projects or income generating activities which are capital-starved but are
otherwise profitable, labor-intensive and are utilizing indigenous local raw materials and
traditional skills, arts and designs to promote the expansion of micro-enterprises in the
area;

7. To coordinate and monitor the building, operation and transfer of projects
involving the construction of abattoirs, dams, reservoirs, roads, wharfs, telephones,
transmission projects as are necessary including pipes along rivers or its tributaries
subject to the approval of the President of the Philippines and upon the
recommendation of the department head concerned;

8. To propose the zonification and reclassification of land to the local government
units concerned;

9. To reclaim lands or cause the reclamation of portions of the lake including
foreshore and submerged areas by dredging, filling or other means, or acquire
reclaimed lands in joint venture with private entities under a sharing agreement.

10. To rationalize the uses of, or to hold, administer, utilize, encumber or
otherwise deal with public lands and/or to acquire, by purchase urban idle lands,
whether public or private for the underprivileged, displaced or homeless citizens; to
make available to them decent housing at affordable costs with appropriate basic
services and access to employment opportunities and/or “growth center” for livelinood
projects or income-generating projects;

11. To formulate and recommend plans, programs and projects and monitor the
issuance of licenses, franchises or concession relating to or for the utilization and
development of the natural resources of the area or any of the places within its territorial
jurisdiction subject to such limitations as are provided for by law or the Constitution and
to promulgate such rules and regulations as are necessary for the preservation,
conservation and advancement of the natural resources of the area, prescribing therein
the form and manner through which their uses or utilization may be authorized
particularly its timber, mineral land, water and fisheries resources subject to the
approval of the President, and upon the recommendation of the Secretary of the
Department of Environment and Natural Resources and the Secretary of the
Department of Agrarian Reform;

12. To coordinate programs, projects or activities pertaining to the construction of
infrastructure program such as river flood control, sewerage work, water supply,
irrigation and such other related public works as may be required under its development
plan or programs including the readjustment, relocation or restoration of population
within the area as may be necessary; and

18. To extend the Authority's expertise on planning, management and such other
facilities as may be necessary to prospective and present investors

Section 9. Corporate Powers.- As a corporate body, the Authority shall exercise its
specific powers and functions as follows:

1. To succeed on its corporate name;

2. To sue and be sued in such corporate name:
3. To adopt, alter and use a corporate seal:

4. To adopt, amend, and repeal its by-laws:


§. To enter into contracts of any kind and description, to enable it to carry out its
purposes and functions under this Act;

6. To acquire, buy, purchase, hold or lease, such personal and real property as it
deems necessary or convenient in the transaction of its business and/ or in
relation with carrying out its purposes under this Act; and to lease,

mortgage, sell, alienate, or otherwise encumber, utilize, exploit or dispose and
such personal and real property held by it, subject to prior or existing individual or
communal right of private parties or of the government or any agency or
enterprise thereof.

7. To exercise the right of eminent domain whenever the Authority deems it
necessary for the attainment of the objectives of the Authority under this Act;

8. To borrow funds from any local or foreign financial institutions independent of
the bonds it may issue or may continue to issue, to carry out the purposes of this
Authority under this Act;

9. To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the
shares of the capital stock of, or any bond, securities, or other evidence of
indebtedness created by any other corporation, partnership, or government
agencies or instrumentalities-, and with, the owner of said stock, to exercise all
the rights of ownership, including the right to vote thereon; Provided, That the
authority shall not invest its funds in any highly risky debt instruments issued
without recourse to commercial banks or investment houses as well as in any
highly speculative stocks.

10. For carrying on its business, or for the purpose of attaining or furthering any
of its objectives, to perform any and all acts which a corporation, partnership, or
natural person is authorized to perform under the laws now existing or which may
be enacted hereafter.

11. To coordinate and integrate multi-sectoral participation and activities relating
to the utilization of Lake Lanao within the context of national plans and policies
for social and economic development.

12. To issue such rules and regulations as may be necessary to effectively carry
‘out the powers and purposes herein; provided including the plans, programs and
projects of the Authority, subject to the approval of the board of directors,

13. To undertake survey, inventory and appraisal of the lake watershed area and
develop comprehensive plan for its protection, conservation and development;
14. To address the concerns on land use planning and management and flooding
around the lake;

15. To conduct and/or promote special studies and researches with other
government or private agencies on all related aspects of water resources
development, such as but not limited to weather modification and environmental
quality;

16. To exercise such powers and perform such other acts as may be necessary
to effectively carry out the provisions of this Act.

Section 10. Capital Stock. - The Authority shall have an authorized capital stock of Two
Hundred Million Pesos (P200,000,000.00) to be divided into two million shares
(2,000,000) shares of stocks with a par value of One Hundred Pesos (P100.00) per
share; Provided, That majority of the authorized capital stock shall be subscribed by the
national government and any of its instrumentalities and the balance to be subscribed
and paid by the private sector: Provided further, That in the case of the national
government, the initial amount necessary to subscribe and pay for the initial shares of
stock shall be included in the annual General Appropriations Act.

Section 11. Operating Expenses. -The amount of Fifty Million Pesos (P50,000,000.00)
for the initial operating expenses of the Authority shall be included in the General
Appropriations Act. Thereafter, the Authority shall provide for its operations and
maintenance.


Section 12. Power to Incur Debts and to Issue Bonds. - Whenever the Board of
Directors may deem it necessary for the Authority to incur indebtedness or to issue
bonds to carry out the provisions of this Act, it shall by resolution so declare and state
be confirmed by the affirmative vote of the stockholders representing a majority of the
subscribed capital stock outstanding and entitled to vote.

The authority shall submit to the NEDA Board and the Monetary Board of Central
Bank, for approval, its proposal to incur indebtedness or to issue bonds. This shall be
considered authorized upon approval of the President of the Philippines.

Section 13. Sinking Fund Account.- A sinking fund shall be established in such manner
that the total annual contribution thereto accrued at such rate of interest as may be
determined by the Board of Directors as confirmed by the stockholders representing a
majority of the subscribed capital stock outstanding and entitled to vote, shall be
sufficient to redeem at maturity the bonds issued under this Act.

Such fund shall be under the custody of the treasurer of the Authority who shall
invest the same in such manner as the Board of Directors may direct, charge expenses
of investment to said sinking fund, and credit the same with the interest on investment
and other income according thereto.

Section 14. Authority to Contract Foreign Loan.- The Authority is hereby authorized to
contract loans, credits or indebtedness in any convertible foreign currency or capital
goods from time to time from foreign governments or any international financial
institutions or fund sources.

With the prior concurrence of the Monetary Board and in accordance with
Section 20 of Article VII of the Constitution, the President of the Philippines is hereby
further authorized to guarantee, in the name and/or behalf of the Republic of the
Philippines, the payment of any loans herein authorized, as well as the performance of
all or any of the obligations undertaken by the Authority, pursuant to loan agreements
entered into with foreign governments or any international financial institutions.

In the negotiation and contracting of any loan, credit or indebtedness under this
section, the provision of Section 4 of Republic Act No. 4860, as provided in Section 5 of
Republic Act No. 6142, as amended, shall apply.

The foreign loans, credits or indebtedness contracted under this subsection and
the payment of the principal interest and other charges thereon, as well as the
importation of machineries, equipment, materials and supplies by the Authority, paid
from the proceeds of any loan, credit or indebtedness, incurred under this Act shall be
‘exempt from alll taxes, fees, imposts, other charges and restrictions imposed by the
Republic of the Philippines or any of the agencies and political subdivisions

Section 15. Tax exemption. — Within five (5) years from the effectivity of this Act, the
Authority shall be exempt from the payment of income taxes, franchise taxes, realty
taxes, and all kinds of taxes and licenses to the national government, its provinces,
cities and municipalities and other government agencies and instrumentalities; Provided,
That its subsidiary corporation shall be subject to all said taxes five (5) years after their
establishment under 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 its principal and interest

Section 16. Structure, Staffing and Pay Scale.- The Board shall determine the
organizational structure, staffing pattern and pay scale of the Authority, and the officers


and employees thereof conformably to that of existing government-owned or controlled
corporations and subject to existing rules and regulations of the Civil Service
Commission and the Department of Budget and Management.

Section 17. Subsidiary Corporation.- The Authority may, for the attainment of its
purpose and objectives, establish and maintain one or more subsidiary corporations
subject to the approval of the Securities and Exchange Commission. The Chief
Executive Officer of the Authority or his representative shall be ex officio member of the
Board of Directors of said subsidiary corporation.

Section 18. Merit System.- All officials and employees of the Authority and its
subsidiary corporation shall be selected and appointed on the basis of merit and fitness,
in accordance with a comprehensive and progressive merit system, which shall be
established by the Authority immediately upon its organization, The recruitment, transfer,
promotion and dismissal of its personnel including contractual workers shall be
governed by such merit system in accordance with existing laws, rule and regulations.

Section 19. Board of Directors.- 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 eleven (11) members as follows:

1) Secretary, Department of Energy, as ex officio chairman;

2) Regional Governor, Autonomous Region In Muslim Mindanao as ex-officio,
Vice-Chairman;

3) President, National Power Corporation, as ex-officio member;

4) Provincial Governor, Lanao del Sur, as ex-officio member;

5) Representative, 1" District of Lanao del Sur;

6) Represetative of the Congressman, First District of Lanao del Sur;

7) City Mayor, Marawi City, as ex officio member;

8) Representative, Department of Environment and Natural Resources;

9) Representative, Department of Agriculture;

10) Representative, Department of Trade and Industry; and

11) One (1) representative from the private sector, either from the cooperative
federation or union, nongovernmental organization or any duly registered
association to be appointed by the President of the Philippines who shall
serve for a term of 3 years: Provided, That in the event of vacancy, the
successor appointed to fill the same shall serve only the unexpired portion
of the term of the member he succeeds.

Section 20. Quorum. -The presence of a majority of the members of the board shall
constitute a quorum for the transactions of the business the board,

Section 21. Meetings. - 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.
The Board shall be convoked by the Chairman or upon the written request of at least
three (3) of its member. Except as otherwise provided for in this Act, the votes of a
majority of the members constituting a quorum shall be sufficient for the adoption of any
tule, resolution, decision or any act of the Board.

The members of the Board shall receive per diem for every meeting actually attended
and shall be reimbursed by the Authority for actual expenses (including travelling and
subsistence expenses) incurred by them in the performance of their duties in
accordance with existing law.

Section 22, Powers and Functions. - The Board shall have the following powers and
functions:


(1) To formulate policies, develop programs and establish projects, and
promulgate rules and regulations to govern the conduct of the affairs of the
authority;

(2) To adopt and approve the annual or supplemental budget of the authority
to cover its financial operation;

(3) To appoint and fix the compensation and allowances of all the officers and
employees of the Authority including the Deputy Administrator and Assistant
Deputy Administrator in accordance with existing laws;

(4) Upon the majority vote of all members on the Board,to suspend, remove
or otherwise discipline its officers and employees for just cause;

(5) To submit an annual report to the President and render such special
reports as may be required or deemed necessary; and

(6) To perform such other functions as may be necessary to carry out the
provisions of this Act.

Section 23. Administrator. - The Board shall have an administrator to be appointed by
the President of the Philippines who shall be the Chief executive officer of the Authority.
The administrator shall serve for a term of four (4) years subject to renewal upon
recommendation of the Board and at the pleasure of the President.

The administrator shall be assisted by such Deputy Administrator and Assistant
Deputy Administrator as the Board may authorize and appoint. Their tenure,
qualification and compensation shall be determined and fixed by the board in
accordance with existing laws.

Preferably, the administrator shall possess, at least, a master’s degree in
economics or shall have attended an MBA course at a reputable institution of higher
learning for, at least, two (2) consecutive years. He must also have held for, at least five
(8) years an executive or managerial position, and he must be a native of the area and
is an actual resident thereof

Section 24, Duties and Functions of the Administrator. - The administrator shall perform
the following duties and functions:

(1) Submit, for the consideration of the Board, the policies and measures
which he believes to be necessary to carry out the provisions of this Act;

(2) Execute and administer the policies and measures approved by the board;
(3) Direct and supervise the operation and internal administration of the
Authority. He may, for efficiency and effectiveness, delegate certain
administrative responsibilities to other officers of the Authority subject to the
rules and regulations of the Board;

(4) Represent the Authority in all dealings with other offices, agencies and
instrumentalities of the government and with all other persons, entities or
enterprises, whether public or private, domestic or foreign;

(5) Sign contracts entered into or concluded by the Board, and such other
correspondence and documents of the Authority;

(6) Represent the Authority, either personally or through counsel, in any legal
action or proceedings; and


(7) Exercise such other duties and functions as may be granted to him by the
Board.

Section 25. Department. — There shalll be created by the authority the following service
departments: Administration Operation, Finance and Management, Planning and
Programming, Legal, auditing, and such other department, division, section or unit as
the Board may deem necessary to carry out its powers and functions. The tenure
qualification and compensation of the personnel of these departments or any of its unit
shall be determined and fixed by the Board in accordance with existing laws.

Section 26. Auditing. — The auditing department shall be headed by duly appointed paid
according to law. All personnel of the auditing department shall be appointed and their
number and salaries fixed by the Commission on Audit in accordance with existing laws.

Section 27. Miscellaneous Provision. — Within ninety (90) days upon the effectivity of
this Act, the Authority shall be organized to carry out its purposes and objectives:
Provided, That the Authority shall, furthermore, within one (1) year upon organization,
formulate a comprehensive plan for the rapid and balanced development of the Lake
Lanao Area: Provided, finally, That the aforesaid plan shall be submitted to the
President after proper evaluation and upon the recommendation of the National
Economic and Development authority.

Section 28. Applicable of the Corporation Law. — The provisions of the corporation law,
as amended, insofar as they are not inconsistent with this Act shall be applicable to the
operations of the Authority.

Section 29. Repealing Clause.- All laws, decrees, orders, rules and regulations or parts
thereof inconsistent with the provisions of this Act are hereby repealed, amended or
modified accordingly.

Section 30. Effectivity Clause. - This Act shall take effect upon its approved

Approved.