Creation of National Abaca and Fiber Corp.

Corporate objects and economic purpose

Section 2 requires the corporation to ensure a permanent, sufficient and balanced production of abaca and other fibers for local industry requirements and exportation.
Section 2 directs the corporation to check speculation that tends to decrease prices of abaca and other fibers.
Section 2 requires the corporation to stabilize prices at a level sufficient to cover the cost of production plus a reasonable profit.
Section 2 authorizes the corporation to assist in preventing short as well as excess production, and to act as a regulating organ to avoid disorganization of an important national economic activity and its consequences, including suspensions of work, unemployment, and other social calamities.

Broad corporate authority and powers

Section 3 authorizes the corporation to buy, sell, export, barter, and deal in abaca and other fibers in any manner.
Section 3 authorizes the corporation to acquire, use, and operate, subject to existing law, transportation and processing/handling resources, including merchant vessels, rails, railroad lines, stripping machines, presses, warehouses, buildings, and other equipment connected with stripping, warehousing, and proper handling of abaca and other fibers.
Section 3 authorizes the corporation to act as agent, broker, commission merchant, or representative of producers, merchants, pressmen, or other dealers and of the products derived therefrom.
Section 3 authorizes the corporation to grant loans to planters on reasonable terms when it deems it advisable, on account of abaca and other fiber crops.
Section 3 authorizes the corporation to borrow, issue bonds, or otherwise raise funds when the needs of the industry require it.
Section 3 authorizes the corporation to enter into, make, and execute contracts of any kind necessary or incidental to its purposes, with any person, firm, or public or private corporation, with the Governments of the Philippines or the United States, with any State, territory, or possession thereof, or with a foreign government.
Section 3 authorizes the corporation to maintain offices outside the Philippines and to transact business and exercise its powers in any part of the Philippines or any foreign country, state or territory.
Section 3 grants authority “in general” to do everything directly or indirectly necessary or incidental to, or in furtherance of, the corporation’s purposes, and to perform acts that a partnership or natural person is authorized to perform under existing or future laws.

Capital structure, subscription, and payment rules

Section 4 sets the corporation’s capital stock at PHP 20,000,000, divided into 200,000 shares with a par value of PHP 100 per share.
Section 4 prohibits issuing any stock at less than par or except for cash.
Section 4 requires that at least 51% of the capital stock be subscribed by the Government of the Commonwealth of the Philippines.
Section 4 provides that the remaining shares may be offered to provincial, municipal, and city governments and to the general public.
Section 4 requires that 25% of the value of all stock subscribed be paid at the time of subscription, with the balance subject to call at times the Board of Directors deems advisable.
Section 4 provides a special payment condition for subscriptions by the Government under the Act: those amounts are paid only upon certification to the President of the Philippines by the Auditor General and the Secretary of Finance that there are sufficient funds available in the National Treasury to warrant disbursement, in excess of the appropriations made for the ordinary expenses of the National Government.
Section 4 vests voting power over shares owned by the Government of the Commonwealth in the President of the Philippines or the person(s) he designates.
Section 4 vests voting power over shares owned by provincial, municipal, or city governments in the chief executive officer of the respective local government.

Relation to Corporation Law and governance

Section 5 provides that the corporation is subject to the Corporation Law insofar as its provisions are compatible with the Act and with the corporation’s purposes.
Section 5 grants the corporation the general powers under the Corporation Law in addition to those specified in the Act.
Section 6 vests management in a Board of Directors consisting of not more than five members appointed by the President of the Philippines with the consent of the Commission on Appointments of the National Assembly.
Section 6 directs the President of the Philippines to appoint the chairman from among the board members.
Section 6 sets staggered initial terms for the first five directors: one for 1 year, one for 2 years, one for 3 years, one for 4 years, and one for 5 years; thereafter, each director serves 5 years.
Section 6 provides that a director appointed to fill a vacancy serves only the unexpired term.
Section 6 allows removal of any director by the President of the Philippines.
Section 6 establishes that three directors constitute a quorum.
Section 6 requires each director, before performing duties, to take the oath prescribed in section twenty-three of the Revised Administrative Code and in the Constitution of the Philippines.
Section 6 provides director compensation rules: each director receives a per diem not to exceed PHP 30 per day of actual meeting attendance, except the chairman who is also the general manager and receives a salary not to exceed PHP 15,000 per annum.
Section 6 requires the Board to submit the corporation’s annual report and balance sheets to the President of the Philippines and the National Assembly, as provided in sections five hundred and seventy-four to five hundred and seventy-seven, inclusive, of the Revised Administrative Code.

Appropriation and funding for government shares

Section 7 appropriates PHP 11,000,000 from funds in the National Treasury not otherwise appropriated.
Section 7 requires the appropriation to pay for the shares of stock acquired by the Government of the Commonwealth in accordance with the Act.

Effectivity

Section 8 provides that the Act takes effect on approval.
Approved: June 18, 1938.