An Act Creating the Bicol Development Company, Defining its Powers, Functions and Duties, Appropriating Funds Therefor, and Other Purposes

REPUBLIC ACT No. 4690

An Act Creating the Bicol Development Company, Defining its Powers, Functions and Duties, Appropriating Funds Therefor, and Other Purposes

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Chapter I
Creation and Organization of Corporation

Section 1. Declaration of Policy.— It is hereby declared to be the policy of Congress to promote the balanced and accelerated growth of the Bicol Region within the context of national plans and policies for social and economic development through the leadership, guidance, and support of the government. To achieve this end, it is recognized that a government corporation should be created to implement the approved plans and programs of the National Economic Council and/or to draw the necessary plans for the development of the Region, provide leadership therefor, and coordinate and integrate the diverse efforts of various public and private enterprises engaged in the development of the Region, and whenever necessary, to undertake the activities essential to said development.

Section 2. Bicol Development Company created.— 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 Bicol Development Company, hereinafter referred to as the Company, which shall be organized within ninety days after the approval of this Act. The Company shall exercise the power expressly granted under this Act and perform such functions as are necessary for carrying out its objectives and purposes. This Act may be cited as the "Bicol Development Company Act."

Section 3. Incorporation.— The Company shall be deemed organized upon the first meeting of the Board of Directors and the directors who attended the first meeting shall be deemed the incorporators.

Section 4. Principal Office; Subsidiary Corporation.— The principal office of the Company shall be in the City of Legaspi but subsidiary corporations organized in accordance with this Act in the six provinces of the region shall have their principal offices in the capitals of the provinces concerned. Branches and agencies may be established in such other places as may be necessary for the proper conduct of their business.

Chapter II
Purposes and Objectives

Section 5. Purposes and Objectives.— The Company shall have the following purposes and objectives:

The exercise of authority by this Company to carry out the aims and objectives of this Act shall not be limited by any existing provision of law to the contrary. Whenever the Company decides to exercise any authority necessary for the development of the region presently vested in another governmental body or agency, the exercise of such authority by the Company shall be deemed exclusive.

Chapter III
Corporate Powers

Section 6. Powers, Functions, Eminent Domain, etc.— Without in anyway limiting the powers of the Company, in order to accomplish the purposes of this Act, the Company shall have, among others, the following powers and functions:

Chapter IV
Organization and Financing

Section 7. Capitalization.— The Company shall have an authorized capital of Three hundred million pesos divided into three million shares at One hundred pesos par value which shall be fully subscribed by the Republic of the Philippines and shall be paid out as follows:

Section 8. Operating Expenses.— For the operating expenses of the Company for the fiscal year nineteen hundred sixty-seven the sum of Five hundred thousand pesos is hereby appropriated out of any fund in the National Treasury not otherwise appropriated. For the succeeding fiscal years, the Board of Directors may appropriate out of the paid-in capital of the Company a sum not exceeding One million pesos each fiscal year for operating expenses. A standing annual appropriation is hereby made out of any fund in the National Treasury not otherwise appropriated of such sums as may be necessary to reimburse the Company of the total amount actually expended out of the said One million pesos for overhead expenses at the end at each fiscal year, which reimbursement shall accrue to the paid-in capital of the Company. The unexpended balance of the appropriation for overhead expenses at the end of each fiscal year shall automatically revert to the said paid-in capital.

Section 9. Procedure to Issue Bonds and Incur Indebtedness.— Whenever the Board of Directors may deem it necessary for the Company 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 purpose for which the proposed debt is to be incurred. In order that such resolution may be valid, it shall be passed by the affirmative vote of at least four members of the board and approved by the President of the Philippines upon the recommendation of the Secretary of Finance, after consultations with the National Economic Council and the Monetary Board of the Central Bank.

Section 10. Bond Limits.— The bonds issued under this provision shall in no case exceed the amount of fifty million pesos: Provided, That no single issue shall exceed ten million pesos and that no further issue shall be made if eighty per centum of the immediately preceding issue is not yet sold.

The bonds shall be issued in such amounts as will be needed at any one time, taking into account the rate at which said bonds may be absorbed by the buying public and the fund requirements of projects ready for execution, and considering further a proper balance between productive and non-productive projects as that inflation shall be held to the minimum.

Section 11. Form, Rates of Interests, etc. of Bonds.— The Secretary of Finance, in consultation with the Monetary Board, shall prescribe the form, the rates of interest, the denominations, maturities, negotiability, convertibility, call and redemption of features, and all other terms and conditions of issuance, placement, sale, servicing, redemption and payment of all bonds issued by virtue of this Act.

The Bonds issued by virtue of this Act may be made payable both as to principal and interest in Philippine Currency or any readily convertible foreign currency. Said bonds shall be receivable as security in any transaction with the Government in which such security is required.

Section 12. Exemption from Tax.— The Company shall be exempt from all taxes incidental to its operations: Provided, That its subsidiary corporations shall be subject to all said taxes five years after their establishment under a graduated scale as follows: Twenty per centum of all said taxes during the sixth year, forty per centum of all said taxes during the seventh year, sixty per centum of all said taxes during the eight year, eighty per centum of all said taxes during the ninth year, and one hundred per centum of all said taxes during the tenth year after said establishment. Such exemption shall include any tax or fee imposed by the government on the sale, purchase or transfer of foreign exchange. All notes, bonds and debentures and other obligations issued by the Company shall be exempt from all taxes, both as to principal and interest, except inheritance and gift taxes.

Section 13. Sinking Fund.— A sinking fund shall be established in such manner that the total annual contributions thereto, accrued at such rate of interest as may be determined by the Secretary of Finance shall be sufficient to redeem at maturity the bonds issued under this Act. Said fund shall be under the custody of the Central Bank of the Philippines which shall invest the same in such manner as the Monetary Board may approved; charge all expenses of such investments to said sinking fund, and credit the same with the interest in investments and other income belonging to it.

Section 14. Guarantee by the Government.— The Republic of the Philippines hereby guarantees the payment by the Company of both the principal and the interest of the bonds, debentures, collaterals, notes or such other obligations issued by the Company by virtue of this Act, and shall pay such principal and interest in case the Company fails to do so. In the event that the Company shall be unable to pay the said principal and interest, the Secretary of Finance shall pay the amount thereof which is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collaterals, notes or other obligations, unless the sums so paid by the Republic of the Philippines shall be refunded by the Company within a reasonable period of time.

Section 15. Subsidiary Corporations.— The capital stock of the subsidiary corporations shall be subscribed in whole or in part by the Company in joint venture with private investors or the provincial or municipal government of the region, is such amounts as may be determined by the Board. As soon as the Company is organized, the Catanduanes Development Authority, the organization of which is authorized under Republic Act No. 4412, shall be deemed and shall operate as a subsidiary corporation under this Act.

Chapter V
Management and Personnel

Section 16. Board of Directors; Composition of .— The corporate powers of the Company shall be vested in and exercised by a Board of Directors, hereinafter referred to as the Board, which shall be composed of seven members appointed by the President of the Philippines with the consent of the Commission on Appointments: Provided, That in the selection of members of the Board, the President shall give preference to residents of the Bicol Region and whenever practicable, the six provinces comprising the Region shall be represented.

Section 17. The Board of Directors.— The directors shall elect annually a chairman from among themselves. He shall perform the duties imposed by law on the president of a corporation.

Section 18. Tenure of Office.— The term of office of the directors shall be four years each, except that the directors initially appointed by the President shall serve as designated in their appointments; one for one year, two for two years, two for three years, and two for four years: Provided, That any person chosen to fill a vacancy shall serve only for the unexpired term of the director whom he succeeds.

Section 19. Qualifications.— All members of the Board of Directors shall be natural-born citizens of the Philippines and of unquestioned integrity and competence.

Management experts and technical personnel employed in government agencies shall not be barred from serving as member of the Board and receive per diems therefor: Provided, That the appointment of government personnel is made with the consent of their respective chiefs of office.

Section 20. Disqualifications.— No member of the Board of Directors shall practice any profession or engage in any business, directly or indirectly, affected by or related to the exercise of the functions and powers of the Company; nor shall he be financially interested, directly or indirectly, in any contract entered into, or in any special privilege granted by the Company during his term of office. Violation of any of these prohibitions shall constitute a ground for dismissal.

Section 21. Removal.— A member of the Board may be suspended or removed from office by the President of the Philippines only for cause.

Section 22. Quorum: Board Meetings.— Four members of the Board of Directors shall constitute a quorum to transact the business of the Company. The Board shall meet at least once every month and as frequently as may be necessary to perform its duties. The Board shall be convoked by the Chairman or upon written request signed by a majority of the members.

Section 23. Per Diems.— The members of the Board of Directors shall receive for every meeting attended, a per diem of One hundred pesos: Provided, That in no case will the total amount received by each exceed the sum of five hundred pesos for one month. Members of the Board Shall be reimbursed by the Company for actual expenses incurred by them in the performance of their duties for the Company as authorized by the Board of Directors.

Section 24. General Manager: Appointment and Qualification of .— In addition to the qualification for Director set forth in Section Nineteen of this Act, no person shall be appointed General Manager unless he be of known executive competence and experience in the field of public administration or the management of agricultural, industrial, or commercial enterprises. The General Manager shall be appointed by a majority vote of the Board of Directors. He may or may not be a member of the Board: Provided, However, That the General Manager appointed who is not a member of the Board shall be ex-officio member of the Board and shall be entitled to all the privileges of a member of the Board, except the right to vote.

Section 25. Tenure of Office.— The General Manager shall serve for a fixed term of four years, unless removed from office by a vote of two-thirds of the Board of Directors.

Section 26. Powers and Duties.— The General Manager shall have, among others, the following powers and duties:

Section 27. Compensation; Residence Requirement; Prohibitions.— The General Manager shall receive a compensation not exceeding Twenty-four thousand pesos per annum which shall be charged against the operating expenses of the Company. He shall established his residence within the Region. He shall not, during the term of his office, engage in any business, or profession or calling other than those connected in the performance of his official duties as general Manager of the Company.

Section 28. Merit System.— All officials, agents, and employees of the Company shall be selected and appointed on basis of merit and fitness in accordance with a comprehensive and progressive merit system to be established by the Company. The recruitment, transfer, promotion and dismissal of all personnel of the Company shall be governed by such merit system.

Chapter VI
Miscellaneous Provisions

Section 29. Authority Directly Under the National Economic Council.— Any provisions of law to the contrary notwithstanding, the Company shall operate as an independent corporation subject only to the supervision of the National Economic Council.

Section 30. Auditing.— The auditor General shall be ex-officio auditor in charge of the auditing office of the Company. He shall appoint a representative who shall be the auditor thereof. The Auditor General shall, upon the recommendation of the auditor of the Company, appoint or remove the other officials and personnel of the auditing office in accordance with the merit system of the Company. The operating expenses of this office and the salaries and travelling expenses of the officials and employees thereof shall be fixed by the Board and paid by the Company. Internal auditing of the accounts and transactions of the Company shall be its sole responsibility. Audit by the Auditor General shall be conducted on a post-audit basis and the Company shall be entitled to disburse funds without prior approval from the Auditor General. The result of such audit shall be transmitted to the Board through the Chairman and to the President and the Congress of the Philippines.

Section 31. Separability Clause.— The provisions of this Act are hereby declared to be separable, and in the event any one or more of such provisions are held unconstitutional, they will not affect the validity of other provisions.

Section 32. Laws repealed.— All Acts, charters, executive orders, administrative orders, rules and regulations, or parts thereof in conflict with this Act are hereby repealed or modified accordingly.

Section 33. Effectivity.— This Act shall take effect upon its approval.

Approved: June 18, 1966.