AMENDING THE CHARTER OF THE PHILIPPINE AEROSPACE DEVELOPMENT CORPORATION, PRESIDENTIAL DECREE NO. 286, DATED SEPTEMBER 5, 1973, AND FOR OTHER PURPOSES

• Number: Presidential Decree No. 346
• Sections: 7

Preamble

WHEREAS, the Philippine Aerospace Development Corporation,

in undertaking developmental projects prescribed therefor, now requires a

restructured capital and organizational setup that shall allow greater

responsiveness and flexibility in meeting management and capital demands

and provide full protection for the national interest; and

WHEREAS, for this purpose, its corporate charter,

Presidential Decree No. 286, needs to be amended;

NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief

of all the Armed Forces of the Philippines, pursuant to Proclamation No.

1081, dated September 21, 1972, and General Order No. 1, dated

September 22, 1972, as amended, do hereby decree and order that certain

provisions of Presidential Decree No. 286, dated September 5, 1973, be

amended:

Section 1

SECTION 1. Section 1 of the Decree is hereby amended to

read as follows:

"SECTION 1. Purpose of the Corporation. — The

Philippine Aerospace Development Corporation, hereinafter referred to as

the Corporation, shall be governed by this Decree and its bylaws, as

authorized hereunder, and shall have succession for a period of fifty

years from and after the date of the approval of this Decree. The

principal office of the Corporation shall be located in a place to be

determined by the Board of Directors.

"The Corporation shall have the following purposes:

"[1] a. To undertake all manner of activity, business or

development projects for the establishment of a reliable aviation and

aerospace industry, including the assembly and manufacture of all forms

of aircraft, device, equipment or contraption and studies or researches

for innovations and improvements thereon.

"[2] b. To engage in the maintenance, repair/overhaul, and

modification of aerospace and associated flight and ground equipment and

components thereof in order to provide technical services and overhaul

support to the Philippine Air Force, the national airline, foreign

airline companies, foreign air forces and to the aviation industry in

general."

Section 2

SEC. 2. Section 2, paragraph (7) of the Decree is hereby

amended to read as follows:

"SEC. 2. Powers of the Corporation. — In order to

accomplish the foregoing corporate purposes, the Corporation shall be

vested with the following powers:

"7. To invest, own, or otherwise participate in equity in any

establishment, firm or entity engaged in the aerospace industry; to

form, organize, establish and maintain such subsidiary or subsidiaries

as it may deem necessary to undertake its development projects: Provided,

That such subsidiary or subsidiaries shall each have a board of

directors of seven members in which at least one of the directors

representing the Government shall be elected from among the seven

members of the Board of Directors of the Corporation; and to execute any

and all acts which a partnership or a natural person is authorized to

perform under laws now existing or which may hereafter be enacted."

Section 3

SEC. 3. Section 3 of the same Decree is hereby amended to

read as follows:

"SEC. 3.Capital Stock. —The Corporation shall have a

capital stock divided into three million no-par shares to be

subscribed, paid for and voted as follows:

"a. Two million shares of stock shall be subscribed and paid

for by the Government of the Republic of the Philippines. For this

purpose, the amount of ten million pesos (P10,000,000) set aside and

appropriated from the proceeds of the general fund under Presidential

Decree No. 286, dated September 5, 1973, shall be applied to the full

payment of the two million shares subscribed by the Government.

"b. Five hundred thousand shares of stuck shall each be

subscribed and paid for by the Development Bank of the Philippines and

the Government Service Insurance System at issue values to be determined

by the Board of Directors of the Corporation.

"The voting power pertaining to shares of stock subscribed by

the Government of the Republic of the Philippines shall be vested in the

President or in such person or persons as he may designate.

"The voting power pertaining to shares of stock subscribed by

the Development Bank of the Philippines and the Government Service

Insurance System shall be vested in the Chairman, Board of Governors,

and the General Manager, respectively.

"Each share of stock shall represent one vole and any agreement,

contract, arrangement, scheme or plan that shall transfer ownership and

voting rights over such shares such that the public corporate nature of

the Corporation shall be impaired or removed is prohibited.

Section 4

SEC. 4. Section 4 of the Decree shall be amended to read

as follows:

"SEC. 4. Board of Directors. — The Corporation

shall be governed and its activities shall be directed, controlled and

managed by a Board of Directors which shall be composed of five (5) ex

officio members, namely, the Executive Secretary, the Secretary of

National Defense, the Secretary of Industry, the Chairman, Board of

Governors of the Development Bank of the Philippines, the General

Manager, Government Service Insurance System and two (2) other members

to be appointed by the President of the Philippines. The two appointive

directors shall each serve for a term of two (2) years. The President

shall appoint a Chairman from among the seven directors."

Section 5

SEC. 5. Section 5, paragraph (1) of the Decree is hereby

amended to read as follows:

"SEC. 5. Functions and Duties of the Board of

Directors. —

"(1) The Board shall appoint and fix the salaries of such

executive officers and other officials of the Corporation as may be

necessary for the accomplishment of its corporate purposes."

Section 6 A new section is hereby added to the Decree: "SEC. 8. Foreign Loans.

SEC. 6. A new section is hereby added to the Decree:

"SEC. 8. Foreign Loans. — The Corporation is hereby

authorized to contract loans, credits, in any convertible foreign

currency or capital goods, and indebtedness from time to time from

foreign governments, or any international financial institutions or fund

sources or to issue bonds, the total outstanding amount of which,

exclusive of interest, shall not exceed one billion United Stales

dollars or the equivalent thereof in other currencies, 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 in behalf of the

Corporation, one or several loans, for the accomplishment of its

purposes. "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 in behalf of the Republic of the

Philippines, the payment of the loans, credits, indebtedness and bonds

issued up to 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.

"The loans, credits and indebtedness contracted under this

subsection and the payment of the principal, interest mid 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."

This Decree shall take effect immediately.

Done in the City

of Manila, this 14th day of December, in the year of Our Lord, nineteen

hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ROBERTO V. REYES

Assistant Executive Secretary