Corporate purposes and activities
- The Corporation is authorized to undertake all manner of activities, business, and development projects for establishing a reliable aviation and aerospace industry.
- The Corporation may assemble and manufacture all forms of aircraft, devices, equipment, or contraption, and conduct studies or research for innovations and improvements.
- The Corporation may engage in maintenance, repair/overhaul, and modification of aerospace and associated flight and ground equipment and components.
- The Corporation must provide technical services and overhaul support to the Philippine Air Force, the national airline, foreign airline companies, foreign air forces, and the aviation industry in general.
Corporate powers
- The Corporation may prepare its corporate by-laws.
- The Corporation may carry on any other lawful business whatsoever that is in pursuance of or connected with its primary purposes.
- The Corporation may enter into, make, perform, and carry out contracts of every kind and description for its corporate purposes with any person, firm, association, or corporation.
- The Corporation may have one or more officers in and outside of the Philippines and may conduct business and exercise its powers throughout any part of the Republic of the Philippines and/or in any foreign countries, states, and territories.
- The Corporation may hold public agricultural lands and mineral lands in excess of areas permitted to private corporations, associations, and persons, for a period not exceeding twenty-five years, renewable by the President of the Philippines for another twenty-five years.
- The Corporation may acquire, hold, mortgage, and alienate personal and real property in the Philippines or elsewhere.
- The Corporation may purchase, hold, alienate, mortgage, pledge, or otherwise dispose of the shares of capital stock, or any bond or security, of other corporations or associations in the Philippines or abroad.
- While owning such stock, the Corporation may exercise all rights of ownership, including the right to vote.
- The Corporation may execute any and all acts authorized for partnerships or natural persons under existing laws or laws that may be enacted later.
- The Corporation may perform such other acts it deems appropriate for proper enforcement of Presidential Decree No. 286.
Authorized capital and subscription
- The initial authorized capital stock is Fifty Million (P50,000,000.00) Pesos, divided into five hundred thousand shares, with a par value of one hundred (P100.00) pesos per share.
- No share of stock may be transferred at less than par.
- The stock subscription and payment are allocated as follows:
- P10,000,000.00 shall be subscribed and paid for by the Government of the Republic of the Philippines, set aside and appropriated from the proceeds of the General Fund not otherwise appropriated.
- P20,000,000.00 shall be subscribed and paid for by the Development Bank of the Philippines.
- P20,000,000.00 shall be offered for subscription to domestic and foreign investors.
- Twenty five per centum of the value of all stock subscribed under the Development Bank of the Philippines (paragraph (b)) and domestic/foreign investors (paragraph (c)) must be paid at the time of subscription.
- The balance for paragraphs (b) and (c) is subject to call upon a majority vote of the Board of Directors, with approval of the Chairman.
- Voting power for Government-subcribed stock is vested in the President or in the persons he designates.
- Voting power for Development Bank-of-the-Philippines subscribed stock is vested in the Chairman, Board of Governors.
- Each share represents one vote.
- Any agreement, contract, arrangement, scheme, or plan that transfers voting rights to any person other than the stockholders is prohibited.
Board of Directors composition
- The Corporation is governed and managed by a Board of Directors.
- The Board consists of four (4) ex officio members and three (3) appointed members, for a total of seven directors.
- The four ex officio members are:
- the Executive Secretary,
- the Secretary of National Defense,
- the Chairman, Board of Governors of the Development Bank of the Philippines, and
- the Chairman, Board of Investments.
- The three appointive directors are appointed by the President.
- Each appointive director serves a term of four (4) years.
- The President appoints a Chairman from among the seven directors.
Board functions and reporting
- The Board appoints and fixes the salaries of a General Manager and such other officials as are necessary for internal administration.
- The Board establishes the number of Divisions needed to accomplish corporate purposes.
- The Board must submit an annual report to the President of the Philippines and must publish the annual report of the condition of the Corporation before the end of February of each year.
Government audit and auditor restrictions
- The Chairman of the Commission on Audit appoints a representative to serve as the auditor of the Corporation.
- The Chairman of the Commission on Audit also appoints the necessary personnel to assist the auditor.
- The salaries of the auditor and staff are fixed by the Chairman of the Commission on Audit, with the advice of the Board of Directors.
- The Corporation pays the salaries and other expenses for the auditor’s office.
- The auditor and personnel may be removed only by the Chairman of the Commission on Audit.
- The auditor must be a certified public accountant with at least ten years experience as a certified public accountant.
- No relative of any member of the Board of Directors or the Chairman of the Commission on Audit within the fourth degree of consanguinity and affinity may be appointed as the auditor representative.
Tax and customs exemptions
- The Corporation is exempt from all national, provincial, municipal, and city taxes and assessments then in force or later established for a period of five (5) years from the date it commences operations.
- The Corporation’s importation of equipment, materials, devices, and other items to be used or necessary for purposes authorized under Presidential Decree No. 286 is fully exempt from all customs duties and all other taxes, assessments, and charges related to such importation.
Effectivity and organization
- Presidential Decree No. 286 takes effect upon its approval.
- Within thirty (30) days from the date of his appointment, the Chairman of the Board must call for an organizational meeting of the Board so corporate business may immediately be commenced.
Promulgation details
- Presidential Decree No. 286 is dated September 05, 1973.
- Ferdinand E. Marcos signed as President of the Philippines.
- Alejandro Melchor signed as Executive Secretary.