Law Summary
Creation of Bicol Development Company
- A corporate body known as the Bicol Development Company (the Company) is established.
- The Company will be organized within 90 days from approval.
- It will exercise powers and perform functions necessary to achieve its objectives.
- The Act may be cited as the "Bicol Development Company Act."
Incorporation of the Company
- The Company is deemed organized upon the first meeting of the Board of Directors.
- Directors attending the first meeting are considered incorporators.
Principal Office and Subsidiaries
- The principal office is located in Legaspi City.
- Subsidiary corporations in the six provinces have offices in respective provincial capitals.
- Branches and agencies may be established as needed.
Purposes and Objectives
- Implement approved National Economic Council plans for agro-industrial development.
- Formulate regional plans if the National Economic Council fails to do so within specified periods.
- Provide planning, management, and technical assistance to investors.
- Recommend financing, technical support, and assistance levels to proper agencies.
- Approve development plans or projects related to regional development; decisions are final.
- Engage in industry, agriculture, commerce, or other enterprises that contribute to socio-economic development.
- Organize, finance, invest in, or operate subsidiary corporations with up to 40% foreign equity.
- Act as a holding company supervising subsidiaries.
- Annually report progress, comparisons of targets and accomplishments, and recommendations to the President, National Economic Council, and Congress.
- Authority exercised is exclusive if in conflict with other governmental bodies.
Corporate Powers
- Exercise eminent domain in the name of the Republic for purposes of the Act; real estate obtained remains owned by the Republic but entrusted to the Company.
- Review budgets, approve management contracts, and set general policies of subsidiaries.
- Issue bonds and borrow funds locally or abroad.
- Own agricultural and forest lands beyond limits imposed on private entities.
- Sue and be sued, adopt corporate seal, enter contracts, acquire property, and make necessary regulations.
- Undertake all acts necessary or incidental to achieve its purposes.
Capitalization and Funding
- Authorized capital of PHP 300 million divided into three million shares at PHP 100 par value.
- Paid subscription by the Republic of the Philippines in specified installments including immediate PHP 30 million and annual amounts for nine years.
Operating Expenses
- Initial appropriation of PHP 500,000 for 1967 operating expenses.
- Board may appropriate up to PHP 1 million annually for operations from paid-in capital.
- Reimbursement mechanism for operating expenses with unexpended balances reverting to paid-in capital.
Bond Issuance and Debt
- Board may resolve to incur indebtedness or issue bonds with at least four directors' affirmative vote.
- Requires approval of the President, Secretary of Finance, National Economic Council, and Central Bank’s Monetary Board.
- Bond issuance capped at PHP 50 million; no single issue above PHP 10 million and subsequent issues depend on sales.
- Bonds terms prescribed by Secretary of Finance in consultation with Monetary Board.
- Bonds payable in Philippine pesos or convertible foreign currencies.
- Bonds accepted as security in government transactions.
Tax Exemptions
- The Company exempt from all taxes related to operations.
- Subsidiary corporations subject to graduated tax scheme starting fifth year after establishment.
- Exemption includes taxes on sale, purchase, or transfer of foreign exchange.
- Notes, bonds, and other obligations exempt from taxes except inheritance and gift taxes.
Sinking Fund
- Established to ensure redemption of bonds at maturity.
- Managed and invested by Central Bank under Monetary Board's approval.
- Expenses charged to the sinking fund.
Government Guarantee
- Republic guarantees payment of principal and interest on Company obligations.
- Secretary of Finance to pay in case of Company default, with appropriation from the National Treasury.
- Government may succeed to bondholders’ rights unless refunded by the Company.
Subsidiary Corporations
- Capital stock may be subscribed jointly with private investors or local government units.
- The Catanduanes Development Authority automatically operates as a subsidiary.
Board of Directors Composition
- Seven members appointed by the President with Commission on Appointments consent.
- Preference for residents and representation from the six Bicol provinces.
Board Leadership and Meetings
- Directors annually elect a chairman who acts as corporation president.
- Quorum requires four directors.
- Monthly and special meetings are convened by the chairman or majority request.
- Directors receive per diem with limits and reimbursement for actual expenses.
Board Tenure and Qualifications
- Directors serve four-year terms, staggered initially.
- Members must be natural-born Filipinos with integrity and competence.
- Government employees may serve with consent.
- Disqualified from conflicting business or financial interests with the Company.
- Removal only by the President for cause.
General Manager Appointment and Qualifications
- Must possess executive competence in public administration or relevant fields.
- Appointed by majority of the Board; may be ex-officio non-voting Board member.
- Four-year fixed term; removable by two-thirds Board vote.
- Resident of the Bicol Region required.
- Prohibited from other business or professions during term.
Powers and Duties of the General Manager
- Manage Company affairs according to Board policies.
- Prepare board meeting agendas and recommend policies.
- Submit annual and supplemental budgets for approval.
- Supervise subsidiary budgets and affairs.
- Appoint and remove employees with Board approval.
- Propose organizational reorganizations with Board approval.
- Report annually to the Board and perform assigned duties.
- Authority may be delegated in writing.
Personnel Merit System
- Officials and employees selected based on merit and fitness.
- Recruitment, transfer, promotion, and dismissal governed by the merit system.
Corporate Supervision
- Company operates independently subject only to the National Economic Council.
Auditing
- Auditor General acts as ex-officio auditor and may appoint representatives.
- Auditing office personnel appointed under merit system.
- Operating expenses, salaries governed by the Board.
- Internal auditing responsibility of the Company.
- Post-audit by Auditor General results report to Board, President, and Congress.
- Company may disburse funds without prior Auditor General approval.
Separability Clause
- Unconstitutional provisions do not invalidate remaining provisions.
Repealing Clause
- Conflicting laws, orders, and regulations are repealed or modified.
Effectivity
- Act takes effect upon approval.