FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SIXTY-THREE HUNDRED NINETY-FIVE ENTITLED "AN ACT REVISING THE CHAPTER OF THE NATIONAL POWER CORPORATION," AS AMENDED BY PRESIDENTIAL DECREE NOS. 380, 395, 758 AND 938.

• Number: Presidential Decree No. 1360
• Sections: 9

Preamble

WHEREAS, the accelerated power expansion program of the

National Power Corporation involving as it does the construction of generation

facilities in Luzon, Visayas and Mindanao and the setting up of transmission

line grids require a greater decree of corporate flexibility in the

implementation of said power program as well as in corporate management;

WHEREAS, in pursuing said accelerated power expansion

program for generation and transmission facilities, the present capitalization

of P8 Billion and the ceiling of foreign borrowing pegged at $4 Billion would be

rendered insufficient by the year 1987 and, therefor, a corresponding increase

thereon is necessary in order that such programs would be successfully

completed;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers vested in me by the

Constitution, do hereby order and decree as follows:

Section 1

SECTION 1. Section 5 of Republic Act Numbered Sixty-Three

Hundred Ninety-Five, as amended, is hereby amended with the first and second

paragraphs thereof duly revised to read as follows:

"SECTION 5. Capital Stock of the Corporation—The

authorized capital stock of the Corporation shall be Fifty Billion Pesos

(P50,000,000,000.00) divided into Five Hundred Million (500,000,000) shares

having a par value of One Hundred Pesos each, which shares are not to be

transferred, negotiated, pledged, mortgaged, or otherwise given as security for

the payment of any obligation. The sum of Three Hundred Million Pesos of said

capital stock has been subscribed and paid wholly by the Government of the

Philippines in accordance with the provisions of Republic Act Numbered Four

Thousand Eight Hundred Ninety-Seven.

"The remaining Forty-Nine Billion Seven Hundred Million Pesos shall be

subscribed by the Government of the Republic of the Philippines and shall be

paid as follows:

"(a) The sum of Twenty-Nine Million Two Hundred Sixty-Seven Thousand Six

Hundred Pesos representing outstanding cost and interest of reparation goods

procured by the Corporation pursuant to the provisions of Republic Act Numbered

Seventeen Hundred Eighty-Nine, shall be additional paid-in subscription of the

Government of the Philippines for Two Hundred Ninety-Two Thousand Six Hundred

Seventy-Six shares of stock of said capital stock.

"(b) The balance of said subscription shall be paid by the conversion into

equity capital of the existing bonded indebtedness, cost of reparations goods

that may be allocated in the future, and surpluses of the Corporation and in the

absence thereof, from an annual appropriation of Two Hundred Million Pesos which

is hereby appropriated out of any funds in the National Treasury not otherwise

appropriated, be they collections from any or all taxes accruing to the general

fund or proceeds from loans, the issuance of bonds, treasury bills or notes

which are hereby authorized to be incurred or to be issued by the Secretary of

Finance for the purpose, such annual appropriation to be programmed and released

by the Budget Commission in accordance with the schedule of cash requirements to

be submitted by the Corporation; Provided, that this annual

appropriation of Two Hundred Million Pesos and the programming and release

thereof shall remain in force until the balance of the unpaid subscription of

the Government to the capital stock of the Corporation shall have been paid in

full."

Section 2

SECTION 2. Section 6 of the same Act is hereby amended to

read as follows:

"SECTION 6. The National Power Board; its composition;

compensation of members; qualifications; powers and duties:—The corporate

powers of the Corporation shall be vested in and exercised by a Board of seven

members consisting of a Chairman, Vice-Chairman and five directors who shall be

appointed by the President of the Philippines.

"The President of the Corporation shall be the ex-officio Vice-Chairman of

the Board.

"The said members of the Board shall serve for terms of three years, except

that any person appointed to fill a vacancy shall serve only for the unexpired

term of the member whom he succeeds.

"The Board shall meet as often as may be necessary upon call of the Chairman

of the Board or upon call by a majority of all the Board members.

The members of said Board shall receive a per diem of not to exceed Five

Hundred Pesos for each regular or special meeting of the Board actually attended

by them, and upon approval of the Secretary of Energy, shall receive such other

allowances as the Board nay prescribe, any provision of law to the contrary

notwithstanding.

"A majority of the members of the Board shall constitute a quorum for the

transaction of business.

"The Board, shall, moreover, have the following specific powers and

duties:

"(a) To formulate and adopt policies and measures for the management and

operation of the Corporation;

"(b) To adopt an annual and supplemental budget of receipts and expenditures

of the Corporation according; to its requirements;

"(c) To organize, reorganize and determine the Corporation's organization

structure and staffing pattern; abolish and create offices and positions; fix

the number of its officers and personnel; transfer and re-assign such officers

and personnel; fix their compensation, allowances and benefits, the provisions

of Presidential Decree No. 985 to the contrary notwithstanding;

"(d) To fix the compensation of the President of the Corporation who shall be

appointed by the President of the Philippines; and to appoint and fix the

compensation of other corporate officers;

"(e) For cause, to suspend or remove any corporate officer appointed by the

Board;

"(f) To adopt and set down guidelines for the employment of personnel on the

basis of merit, technical competence and moral character;

"(g) To take care that in fixing the rates and fees to be charged by the

Corporation considerations of adequacy, reliability and sustained power service

at the least possible cost to the public and of limited return on investments as

proscribed in section 5 hereof, shall be taken;

"(h) Any provision of law to the contrary notwithstanding to write off bad

debts."

Section 3

SECTION 3. Section 7 of the same Act is hereby amended, to

read as follows:

"SECTION 7. The President of the Corporation, his powers

and duties; and other Corporate Officers and employees of the

Corporation:—The President of the Corporation who shall be the Chief

Executive Officer of the Corporation, shall be assisted by such number of

Corporate Officers and employees as may be deemed necessary by the Board of

Directors of the Corporation.

"The President of the Corporation shall have the following powers and

duties:

"(a) To execute and administer the policies and measures approved by the

Board, and have the responsibility for the efficient discharged of management

functions;

"(b) To submit for the consideration of the Board such policies and measures

which he deems necessary to carry out the purposes and provisions of this

Act;

"(c) To direct and supervise the operation and internal administration of the

Corporation and, for this purpose, may delegate some or any of his

administrative responsibilities and duties to other officers of the

Corporation;

"(d) Subject to the guidelines and policies set up by the Board, to appoint

and fix the number and compensation of subordinate officials and employees of

the Corporation; and for cause, to remove, suspend or otherwise discipline any

subordinate employee of the Corporation;

"(e) To prepare an annual report to the Board on the activities of the

Corporation at the close of each fiscal year and upon approval thereof, submit a

copy to the President of the Philippines and to such other agencies as may be

required by law;

"(f) To represent the Corporation in all dealings and transactions with other

offices, agencies and instrumentalities of me Government and with all persons

and other entities, private or public, domestic or foreign;

"(g) To exorcise such other powers and duties as may be vested in him by the

Board from time to time.

"The Commission on Audit shall appoint a representative who shall be the

Auditor of the Corporation. In carrying out his responsibilities, he shall be

assisted by such number of personnel as shall be necessary, whose appointments

shall be subject to the approval of the Board. The salaries of the Auditor and

his staff shall be fixed and approved by the Board."

Section 4

SECTION 4. Section 8 of the same Act is hereby amended to

read as follows:

"(a) Domestic Indebtedness—Whenever the Board deems it necessary for

the Corporation to incur indebtedness by contracting loans with domestic

financial institutions or to issue bonds to carry out the purpose for which the

Corporation has been organized, it shall, by resolution, approved by at least

four members of the Board, so declare and state the purpose for which the

proposed, debt is to be incurred and such terms and conditions as it shall deem

appropriate for the accomplishment of the said purpose; Provided, that

in the case of bond issues, the same shall be subject to the approval of the

President of the Philippines upon recommendation of the Secretary of

Finance.

"The bonds issued under the authority of this subsection shall be exempt from

the payment of all taxes by the Republic of the Philippines, or by any

authority, branch, division or political subdivision thereof which facts shall

be stated upon the face of said bonds. Said bonds shall be receivable as

security in any transaction with the Government in which such security is

required.

"The Republic of the Philippines hereby guarantees the payment by the

Corporation of both the principal and the interest of the bends issued by said

Corporation by virtue of this Act, and shall pay such principal and interest in

case the Corporation fails to do so, and there are hereby appropriated, out of

the general funds in the National Treasury not otherwise appropriated, the sums

necessary to make the payments guaranteed by this Act; Provided, That

the sums so paid by the Republic of the Philippines shall be refunded by the

Corporation; Provided, further, That the Corporation shall set aside

five per centum of its annual net operating revenues before interests as a

reserve or sinking fund to answer for amounts advanced to it by the National

Government for any loan, credit and indebtedness contracted by the former for

which the latter shall be answerable as primary obligor or guarantor under the

provisions of this Act; Provided, furthermore, That the setting aside

of the amounts mentioned herein shall automatically cease the moment the

accumulated sinking fund or reserve exceeds the amounts advanced to the

Corporation by the National Government under this Act; And, Provided,

finally, That the Corporation may periodically make partial payments to the

National Government out of the said reserves.

"(b) Foreign Loans—The Corporation is hereby authorized to contract

loans, credits, in any convertible foreign currency, or capital goods, and

indebtedness from to time to time from foreign governments, or any international

financial institution or fund source, or to issue bonds, in such amount and in

any foreign currency on such terms and conditions as it shall deem appropriate

for the accomplishment of its purposes and to enter into and execute agreements

and other documents specifying such terms and conditions.

"The President of the Philippines, by himself, or through his duly authorized

representative, is hereby authorized to negotiate and contract with foreign

governments or any international financial institutions or fund sources, in the

name and on behalf of the Corporation, one or several loans, for the purpose of

assisting in the reconstruction, or promoting the development of the economy of

the country.

"The President of the Philippines, by himself, or through his duly authorized

representative, is hereby further authorized to guarantee, absolutely and

unconditionally as primary obligor and not as surety merely, in the name and on

behalf of the Republic of the Philippines, the payment of the loans, credits,

indebtedness and bonds issued up to the amount herein authorized, which shall be

over and above the amount which the President of the Philippines is authorized

to guarantee under Republic Act Numbered Sixty-One Hundred Forty-Two, as

amended, as well as the performance of all or any of the obligations undertaken

by the Corporation in the territory of the Republic of the Philippines pursuant

to loan agreements entered into with foreign governments or any international

financial institutions or fund sources.

"In the contracting of any loan, credit or indebtedness under this Act, the

President of the Philippines may, when necessary agree to waive or modify the

application of any law granting preferences or imposing restrictions on

international competitive bidding, including among others, Act Numbered Four

Thousand Two Hundred Thirty-Nine, Commonwealth Act Numbered One Hundred

Thirty-Eight, the provisions of Commonwealth Act Numbered Five Hundred

Forty-One, Republic Act Numbered Five Thousand One Hundred Eighty-Three, insofar

as such provisions do not pertain to constructions primarily for national

defense or security purposes; Provided, however, That as far as

practicable, utilization of the services of qualified domestic firms in the

prosecution of projects financed under this Act shall be encouraged;

Provided, further, That in case where international competitive bidding

shall be conducted preference of at least fifteen per centum shall be granted in

favor of articles, materials or supplies of the growth, production of

manufacture of the Philippines; Provided, finally, That the method and

procedure in the comparison of bids shall be the subject of agreement between

the Philippine Government and the lending institution.

"The loans, credits and indebtedness contracted under this subsection and the

payment of the principal, interest and other charges thereon, as well as the

importation of machinery, equipment, materials, supplies and services, by the

Corporation, paid from the proceeds of any loan, credit or indebtedness incurred

under this Act, shall also be exempt from all direct and indirect taxes, fees,

imposts, other charges and restrictions, including import restrictions

previously and presently imposed, and to be imposed by the Republic of the

Philippines, or any of its agencies and political

subdivisions."

Section 5

SECTION 5. A new section shall be inserted to be known as

Section 6

SECTION 6. Repealing Clause. All laws, decrees,

executive orders, administrative orders, rules and regulations inconsistent

herewith are hereby repealed, amended or modified accordingly.

Section 7

SECTION 7. This Decree shall take effect immediately.

Done in the City of Manila, this 25th day of April, in the year of Our Lord,

nineteen hundred and seventy-eight.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) JACOBO C. CLAVE

Presidential Executive

Assistant

Section 160

Section 160A of the same Act, to read as follows:

"SECTION 16-A—Transitory Provisions:

"(a) The word "President" in Section 3(k) of this Act shall refer to the

President of the Philippines;

"(b) The phrase "General Manager of the Corporation" in this Act, as amended,

shall mean the President of the Corporation; And further, the phrase "Regional

Manager" in this Act, shall mean Corporate Officer;

"(c) Until the President of the Philippines appoints the President of the

Corporation, the incumbent General Manager of the Corporation shall, as may be

determined by the Board, either act as President of the Corporation or hold such

office with such duties and responsibilities as shall be determined by the

Board; Provided, That, upon the assumption of office by the President

of the Corporation appointed by the President of the Philippines, said incumbent

General Manager of the Corporation shall without any diminution in salary,

allowances and benefits, hold such office and perform such duties and

responsibilities as shall be determined by the

Board."