Legal basis and policy emergency rationale
- The order is issued under the power conferred by Commonwealth Act No. 498.
- Commonwealth Act No. 498 declares a national policy during the emergency to prevent scarcity, monopolization, hoarding, injurious speculations, manipulations, private controls, and profiteering affecting prime-necessity commodities.
- Commonwealth Act No. 498 authorizes the President during the emergency to: (a) purchase specified commodities for storage, sale, or distribution; (b) fix maximum selling prices; and (c) promulgate rules and regulations with the force and effect of law until the date of adjournment of the next regular session of the National Assembly unless sooner revoked or otherwise provided for.
Commodities covered under the enabling authority
- The enabling framework in Commonwealth Act No. 498 targets prime-necessity commodities including foods, clothing, fuel, fertilizers, chemicals, building materials, implements, machinery, and equipment required in agriculture and industry, and other prime necessity articles or commodities.
- The enabling framework includes commodities both imported and locally produced or manufactured.
- The emergency rationale includes the likely increase in insurance and freight rates, scarcity of bottoms, and limitations with respect to the movement of commodities, which can lead to profiteering.
Corporation: name, corporate existence, and business location
- A corporation “under the laws of the Philippines” is created and named the National Trading Corporation.
- The governing board is structured as a Board of Directors composed of five members.
- The incorporators and first directors of the corporation are designated by the President of the Philippines.
- The corporation’s office and principal place of business are set in the City of Manila.
- Branch offices are established at locations selected and determined by the President of the Philippines.
Capital stock structure and government ownership rules
- The corporation’s capital stock consists of 50,000 shares with a par value of P100 each.
- The Government of the Philippines purchases capital stock from time to time at par as needed to supply the necessary capital for the corporation’s operations.
- No capital stock is sold to any person or entity other than the Government of the Philippines and individual directors or incorporators for the purpose of qualifying as such.
- The qualifying shares held by directors or incorporators are held in trust for the use and benefit of the Government of the Philippines.
Powers, governance instruments, and presidential approval
- The corporation exercises the powers contained in its Articles of Incorporation and By-Laws, which are approved by the President of the Philippines.
- All officers of the corporation are selected with the consent and approval of the President of the Philippines.
Financial subscription and appropriation funding
- The Secretary of Finance is authorized and directed to subscribe for and purchase all the capital stock in the name and for the use and benefit of the Government of the Philippines.
- Payment is made out of the appropriation of P10,000,000 authorized by Section 5 of the Commonwealth Act.
- The subscription and purchase are carried out for the purpose of enabling the corporation to carry on its business.
Transitory and implementation effect in the enabling framework
- Rules and regulations promulgated under Commonwealth Act No. 498 have the force and effect of law until the date of adjournment of the next regular session of the National Assembly, unless sooner revoked or the National Assembly provides otherwise.
- If a new agency is organized, the President has authority to designate employees or officials from other National Government offices or instrumentalities to work in the agency.