Law Summary
Purposes and Specific Powers
- Acquire and operate assets, grants, concessions, and franchises of the former Manila Railroad Company.
- Operate various land and water transportation systems for passengers, mail, and freight nationwide.
- Engage in auxiliary activities including operation of powerhouses, hotels, restaurants, warehouses, mining properties, and rolling stock manufacturing.
- Construct toll viaducts and tunnels connected with railroad lines.
Authorized Capital Stock
- Authorized capital set at ₱250 million, divided into shares of ₱200 par value, incorporating capitalization of the Manila Railroad Company.
- Government to fully subscribe to the increased capital.
- Conversion of Manila Railroad Company’s long-term debts to government into PNR capital stock.
- Funding allocated for construction of new lines and rehabilitation projects under specified Republic Acts.
- Additional funds reserved for purchasing rolling stock and survey of new railway projects including Mindanao.
General Powers
- Authority to undertake all transactions and activities necessary or conducive to achieving corporate objectives.
- Exercise all powers granted to railroad corporations as per Corporation Law.
Board of Directors Composition and Appointment
- Board consists of 5 to 11 members including chairman and vice-chairman.
- Members appointed by the President of the Philippines with Commission on Appointments’ consent.
- Initial staggered terms set; successors serve three-year terms.
- Members receive a per diem for meeting attendance.
Powers and Duties of the Board
- Prescribe and amend corporate by-laws, rules, and committees with approval of Economic Coordination Administrator.
- Appoint and fix compensation of General Manager and other officers, subject to Presidential and Economic Coordination approval.
- Approve budgets, subject to final approval by Economic Coordination Administrator.
Suspension and Removal of Directors
- Board members may be suspended or removed by the President of the Philippines.
Prohibition on Board Members’ Concurrent Roles
- Board members cannot hold other capacities in the corporation unless authorized by the President or law.
Management by the General Manager
- General Manager holds primary responsibility for managing corporate affairs.
General Manager’s Powers and Duties
- Direct day-to-day operations under Board’s control.
- Serve as Vice-Chairman of the Board, with voting rights.
- Submit annual reports to the President through the Board.
- Appoint subordinate personnel with Board approval; impose disciplinary measures.
- Perform additional duties as assigned by the Board.
Appointment and Promotion Policy
- Based on merit and efficiency; political qualifications are prohibited.
- Officers and employees subject to Civil Service rules and regulations.
Tax and Duty Exemptions
- Exempt from all taxes on capital stock, franchises, property, and earnings.
- Exempt from import duties on railway materials and equipment.
- Port charges exempted or proportionally reduced for vessels carrying construction materials.
Audit Personnel and Reporting
- Auditor General appoints the Corporation’s Auditor and staff.
- Audit expenses borne by PNR.
- Comprehensive annual audit report including financial statements and analysis submitted to the President, Economic Coordination Administrator, and Congress.
- Report includes disclosure of unauthorized expenditures or programs.
Legal Counsel
- PNR shall have its own legal department, staffed by Board appointees.
Exemption from Public Service Act
- PNR is not under the jurisdiction of the Public Service Commission.
Liquidation Procedures
- Upon expiration, PNR continues for three years to settle affairs, defend suits, and dispose of assets.
- A Board of Liquidators appointed by the President oversees liquidation.
Strike Prohibition During National Emergency
- Employees prohibited from striking during national emergencies or threats to national security as declared by the President.
Reversion of Funds Upon Dissolution
- Funds from liquidation revert to the Government’s general funds.
Applicability of Corporation Law
- Applicable provisions of Corporation Law apply unless inconsistent with this Act.
Repeal or Modification of Conflicting Laws
- Conflicting laws, orders, or proclamations are repealed or modified accordingly.
Separability Clause
- Unconstitutional provisions or applications severable without affecting the rest of the Act.
Abolition of Manila Railroad Company
- Manila Railroad Company dissolved; assets, liabilities, personnel, and rights transferred to PNR.
- Liquidation of Manila Railroad Company to follow legal and accounting standards.
Effectivity
- Act takes effect immediately upon approval.