Law Summary

1. Short Title

• This Act is known as the "Sulu Development Act of 1969."

2. Declaration of Policy

• Congress aims to promote the balanced development of the Province of Sulu through government support.
• A government corporation is established to plan, lead, and coordinate development efforts.
• Key Objectives:
  • Foster industrial, agricultural, and fishing enterprises.
  • Integrate public efforts for provincial development.

3. Creation of the Sulu Development Company

• Establishes a corporate entity named Sulu Development Company (SUDECO).
• The Company must be organized within six months post-approval of the Act.

4. Incorporation

• The initial Board of Directors are the incorporators; incorporation occurs at their first meeting.

5. Location and Principal Office

• The principal office must be situated in Sulu, with possible branch offices elsewhere.
• Changes in office location must be published in a national newspaper.

6. Purposes and Objectives

• The Company has several objectives:
  • Conduct comprehensive surveys of resources in Sulu.
  • Implement plans approved by the National Economic Council.
  • Provide technical guidance to investors.
  • Evaluate local government projects for development relevance.
  • Engage in necessary industries and reclamation projects.
  • Submit annual reports to the President and Congress.

7. Powers and Functions

• The Company is endowed with various powers:
  • Legal entity status (sue and be sued).
  • Enter contracts and acquire properties.
  • Exercise eminent domain.
  • Borrow funds, subject to government oversight.

8. Government Guarantee

• The Philippine government guarantees payment of the Company’s obligations.
• If the Company defaults, the Secretary of Finance is responsible for payment.

9. Capitalization

• The Company has an authorized capital of ₱50 million, fully funded by the Republic.
• Funding is appropriated over five years, with specific annual amounts.

10. Operating Expenses

• ₱400,000 is allocated for the Company’s operating expenses for FY 1970-1971 from the sale of seized goods.
• Subsequent expenses will be included in the General Appropriations.

11. Tax Exemption

• The Company is exempt from all taxes during operations.
• Subsidiaries are subject to a graduated tax scale starting five years after establishment.

12. Sinking Fund

• A sinking fund must be established to redeem bonds issued under the Act.
• Managed by the Central Bank of the Philippines.

13. Board of Directors

• Consists of five members appointed by the President, who designates the Chairman.

14. Acting Chairman

• In the absence of a Chairman, the Board can appoint an acting chairman.

15. Appointment and Tenure

• Board members serve staggered terms, with successors appointed similarly.

16. Vacancy Before Expiration of Term

• Vacancies are filled for the unexpired term.

17. Effect of Vacancies; Quorum

• A minimum of three Board members constitutes a quorum.

18. Qualifications of Directors

• Directors must be Filipino citizens with relevant experience and residency in Sulu.

19. Disqualification

• Directors cannot engage in partisan politics or related business interests.

20. Conflict of Interest

• Directors must not have personal interests in Company contracts.

21. Removal for Cause; Courtesy Resignation

• Directors may only be removed for cause by the President.

22. Board Meetings

• Board meetings occur at least monthly and can be convened by the Chairman or majority request.

23. Per Diems

• Board members receive specific per diems for meetings and can be reimbursed for expenses.

24. General Manager

• The General Manager, appointed by the Board, oversees daily operations.

25. Qualifications of the General Manager

• Must have relevant executive experience and serves as an ex-officio Board member.

26. Powers and Duties

• The General Manager prepares agendas, manages staff, and administers policies.

27. Compensation

• The General Manager’s annual salary is ₱24,000, with additional allowances.

28. Residence

• The General Manager must reside near the Company’s principal office.

29. Activities of the Company; Key Officials

• Key officials include an Assistant General Manager, division chiefs, and a Corporate Counsel, each with specified roles and compensation.

30. Merit System

• All personnel are appointed based on merit following a comprehensive merit system.

31. Appointment by the Board

• Officials above division head are Board-appointed based on General Manager recommendations.

32. Appointment by the General Manager

• Employees below division chief level are appointed by the General Manager.

33. Plans to be Formulated Within One Year

• The Company must submit development plans to the President within one year of organization.

34. Approval of Plans

• The Company must advise agencies to proceed with plans upon approval.

35. Company Under the Office of Economic Coordination

• The Company operates under this Office.

36. Supplies and Service

• Purchases must follow proper bidding procedures, with exceptions for emergencies or small amounts.

37. Auditing

• The Auditor General serves as the Company’s auditor, overseeing financial operations and reports.

38. Separability Clause

• Invalid provisions do not affect the validity of the remaining Act.

39. Laws Repealed

• Conflicting laws and regulations are repealed.

40. Effectivity

• The Act takes effect upon approval.

Key Takeaways

• The Sulu Development Company (SUDECO) is established to promote economic development in Sulu.
• It has significant powers, including the ability to borrow funds and engage in various enterprises.
• The government guarantees its financial obligations, and a structured governance framework is established for its operation.
• Tax exemptions are provided for the Company, while a sinking fund ensures the management of debt.
• A merit-based system governs hiring, ensuring qualified personnel are in place to execute the Company's objectives.