Presidential Decree No. 538 (PD 538) — Creating and Establishing the Phividec Industrial Authority and Making It a Subsidiary Agency of the Philippine Veterans Investment Development Corporation Defining Its Powers, Functions and Responsibilities, and for Other Purposes.
WHEREAS, it is the policy of the Government to encourage,
promote and sustain the economic and social growth of the country;
WHEREAS, the provision of well-planned areas with the
appropriate infrastructure facilities will encourage and facilitate the
establishment of industries which in turn contribute to economic and
social growth;
WHEREAS, maximum benefit from such industrial areas can be
derived by creating an Authority with the responsibility to plan,
coordinate and when necessary, actually undertake the construction of
such areas as well as manage their operations in a professional and
efficient manner;
WHEREAS, it is also the policy of the State to harness the
full potentials and capabilities of veterans and AFP retirees so that
they could participate fully in the enhancement of the economic
development of the country;
WHEREAS, the PHIVIDEC was created for the purpose of pooling
the economic resource potentials of these veterans and retirees;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution of
the Philippines, in order to effect the desired changes and reforms in
the social, economic and political structure of our society do hereby
create the PHIVIDEC Industrial Authority and make as part of the law of
the land the following;
SECTION 1. Declaration of Policy. It is hereby
declared and reiterated to be the policy of the Government to encourage,
promote and sustain the economic and social growth of the country and
that the establishment of professionalized management of well-planned
industrial areas shall further this objective.
Creation of the PHIVIDEC Industrial Authority.
SEC. 2. Creation of the PHIVIDEC Industrial Authority.
— To carry out the above policy, a body corporate to be known as the
PHIVIDEC Industrial Authority is hereby created. The Authority as
hereinafter referred to shall be a subsidiary of the PHILIPPINE VETERANS
INVESTMENT DEVELOPMENT CORPORATION created under PD 243, as amended by
PD 853. The functions of the Authority are hereby declared governmental
and proprietary.
Creation of the PHIVIDEC Industrial Areas.
SEC. 3. Creation of the PHIVIDEC Industrial Areas. —
To further carry out the above policy, there are hereby created the
PHIVIDEC Industrial Areas, hereafter referred to as the Areas, which
shall hereafter be proclaimed, designated and specified by
Presidential Proclamations.
The public land and foreshore and offshore areas portion of the
Areas so proclaimed shall be surveyed by the Bureau of Lands and
conveyed in absolute ownership to the Authority, except as hereinafter
provided, for the nominal sum of one peso for each parcel of land.
Thereafter, the proper Register of Deeds shall register the same and
issue the corresponding original certificate of title to the Authority.
The first Area which the Authority shall develop shall be that located
in the municipalities of Tagoloan and Villanueva in the Province of
Misamis Oriental, bounded on the West by Macajalar Bay, on the North
by the Taganga Creek, on the East by the Kiamo and Kirahon plateaus and
the South by the Tagoloan River containing an area of 3,000 hectares
more or less: Provided, however, that the foreshore area from
Tagoloan River, Municipality of Tagoloan, up to the Taganga Creek,
Municipality of Villanueva, and the offshore area 400 meters toward the
sea from the inshore limit between the Tagoloan River and the Taganga
Creek, shall be ceded, transferred and conveyed in absolute ownership to
the National Steel Corp. for the nominal sum of one peso. The meters
and bounds of this Area are specified in Annex "A" which is hereby made
an integral part hereof.
The Authority shall respect existing private rights until such
time that it takes possession of the properties acquired either by
voluntary or forced sale for the construction of infrastructural
facilities and other facilities needed by the Area; and provided,
further, that any new improvements to be introduced by landowners or
claimants during this period shall be first approved by the Authority in
writing.
Purposes and Specific Powers.
SEC. 4. Purposes and Specific Powers. —
The purposes and specific powers of the Authority are as follows:
To operate, administer and manage the PHIVIDEC Industrial
Areas and other areas which shall hereafter be proclaimed, designated
and specified in subsequent Presidential Proclamation; to construct,
acquire, own, lease, operate and maintain infrastructure facilities,
factory buildings, warehouses, dams, reservoirs, water distribution,
electric light and power systems, telecommunications and transportation
networks, or such other facilities and services necessary or useful in
the conduct of industry and commerce or in the attainment of the
purposes and objectives of this Decree;
To take water from any public stream, river, creek, lake,
spring, waterfall or underground aquifers as may be necessary for the
attainment of the purposes of this Decree; to alter, straighten,
obstruct or increase the flow of water in streams or in water channels
intersecting or connecting therewith or contiguous to its works or any
part thereof; and to undertake land reclamation as well as own, hold,
purchase or lease foreshore areas within or adjacent or approximate to
the Areas;
To acquire and hold agricultural lands in excess of the areas
permitted to private corporations or associations by the Constitution;
To determine and regulate the enterprises to be
established within the Areas in order to ensure the implementation of
its plans for the sound development and operation of the Areas in
furtherance of the herein declared national policy;
To construct, operate and maintain or otherwise to grant the
use of or to rent, lease or let, for a consideration and under such
terms, arrangements and conditions it may deem reasonable and
proper, and any and all port facilities, including stevedoring and
port terminal services, or any concession properly incident thereto or
in connection with the receipt, delivery, shipment and transfer in
transit, weighing, marking, tagging, fumigating, refrigerating,
icing, storing and handling of goods, wares and merchandise; Provided,
however, That where the piers and/or harbors are owned
and or operated by private persons, the fees and charges to be
levied shall not exceed that being collected by the Government for
similar services;
To fix, assess and collect charges and fees, including rentals,
for the lease, use, omit or occupancy of lands, buildings, structures,
warehouses, all the facilities and services mentioned herein and other
properties owned and administered by the Estate; and to fix and collect
the fees and charges for the issuance of permits, licenses and the
rendering of services not enumerated herein, the provisions of law to
the contrary notwithstanding;
To sell, lease, or otherwise dispose of, lands and other
properties owned or administered by the Authority for such use by the
Area enterprises, for such housing or commercial purposes within the
Areas and for such maximum industrial development of the Areas;
To levy, assess and collect a real property tax on real
properties within the Areas. The appraisal values and tax rates shall be
in accordance with the rules and regulations promulgated by the
Secretary of Finance for chartered cities. The Authority shall retain
three-fourths of the real property tax collected and remaining
one-fourth shall be turned over to the local government or governments,
as the case may be, which, previous to the establishment of the Areas
were collecting a real property tax from real properties within the
area: Provided, That such share of the real property tax of the
local government or governments shall not be less than what they were
receiving prior to the establishment of the Areas: Provided, finally,
That realty taxes accruing within the Areas at the time the Authority
has not taken over actual possession of a portion or portions of the
properties therein shall continue to be collected by the respective
local governments.
To grant such franchise for and to operate and maintain within
the Areas electric light, heat or power systems, transportation,
communication within, to and from the Areas, warehousing, ice plant or
cold storage;
To prescribe and enforce within the Areas rules and regulations
for pollution control;
For the due and effective exercise of the powers conferred by
law and to the extent requisite therefor, to exercise exclusive
jurisdiction and sole police authority over the Areas;
To promulgate such rules and regulations as may be reasonable,
necessary and desirable for the attainment of the objectives of this
Decree; such rules and regulations shall be binding on the persons,
proprietorships, partnerships and corporations residing or located in
the Areas;
To recommend the establishment of other Industrial Areas as it
may deem advisable, and to recommend the issuance of a proclamation to
fix and delimit the site of the Areas;
When essential to the proper administration of its corporate
affairs or when necessary for the proper transaction of its business or
for carrying out the purposes of this Decree, to contract in debtedness
and issue bonds;
To create and operate and/or contract to operate such agencies,
functional units, office and departments of the Authority as it may
deem necessary or useful for the furtherance of any of the purposes of
this Decree;
To adopt, alter and use a corporate seal which shall be
judicially noticed, make contracts, lease, own or otherwise dispose of
personal and real property; sue and be sued, and otherwise do and
perform any and all acts and things that may be necessary or proper to
carry out the purposes of this Decree;
To perform all other functions enumerated in Section 2 of
Presidential Decree No. 243, as amended by Presidential Decree No. 353.
Capitalization.
SEC. 5. Capitalization. — The capital of the
Authority shall consist of (1) all such properties as may be contributed
to the Authority by the Government to form part of capital, (2) all
capitalized surplus, and (3) cash contribution by the government in the
amount of Two Hundred Million Pesos (P200,000,000.00), which is hereby
appropriated out of any funds in the National Treasury not otherwise
appropriated, be they collections from all taxes accruing to the general
fund or proceeds from loans, the issue of bonds, treasury bills or
notes or derived from any other sources of income, by or of the National
Government, which amount shall be programmed and released by the Budget
Commission in accordance with the schedule of development and
expenditures to be prepared and submitted by the Authority.
Exercise of Corporate Powers.
SEC. 6. Exercise of Corporate Powers. — The
affairs and business of the Authority shall be directed and its
properties managed, controlled and preserved, unless otherwise provided
in this Decree, or in the exercise of the powers vested in the
Authority, by the Board of Directors of the Philippine Veterans
Investment Development Corporation, who may appoint an Estate
Administrator assisted by a staff, or a Board of Management, if it is so
desired, who shall be chosen from veterans of good standing with formal
business training and/or experience in law, or commerce, or finance, or
management on recommendation of the President of said corporation.
Insofar as the Authority is concerned, the Board of Directors of the
Philippine Veterans Investment Corporation is hereby empowered to
exercise governmental and proprietary functions in the administration
and operation of the Authority in all the areas so proclaimed, any
provision of law to the contrary notwithstanding.
Power to Issue Bonds or Incur Indebtedness.
SEC. 7. Power to Issue Bonds or Incur Indebtedness.
— The Authority shall have the authority to contract loans, credits and
other indebtedness, or to issue bonds, notes, debentures, securities
and other instruments of indebtedness for the development and/or
operation of the Areas.
The bonds and other instruments of indebtedness which the
Authority is authorized to issue under this Section and any income
derived therefrom shall be exempt from the payment of all taxes imposed
by the Republic of the Philippines, its agencies, instrumentalities or
political subdivisions, which fact may be expressed on the face thereof,
and shall be eligible as collateral in any transaction with the
national or any local government, its agencies and instrumentalities,
including government-owned or controlled corporations and government
banking and financial institutions, in which collateral is required. Any
or all loans or instruments of indebtedness which the Authority is
authorized to contract or issue under this Section shall be
unconditionally guaranteed both as to principal and interest by the
Government of the Republic of the Philippines whenever the President of
the Philippines, by himself or through his duly authorized
representative, may deem such guarantee by the Government of the
Republic of the Philippines to be advisable and necessary, in which
case, the President of the Philippines or his duly authorized
representative is hereby authorized to execute and deliver said
guarantee of the Government of the Republic of the Philippines.
The Central Bank of the Philippines or any of its authorized agent
banks shall extend to the Authority priority in the allocation of
foreign exchange and in the availment of the assistance and resources of
the Central Bank in a manner that shall facilitate the contracting or
issuance by the Authority of the loans or instruments of indebtedness
which the Authority is authorized to contract or issue under this
Section or the repayment thereof. In any case, where the Authority is
required to surrender or sell to the Central Bank foreign currencies
qualified to form part of its international reserves, the Authority is
hereby given the right to repurchase any or all of said foreign
currencies out of any and all loans and instruments of indebtedness
payable in foreign currency contracted or issued by it pursuant to this
section at the same rate or rates at which said foreign currencies were
respectively sold to the latter, subject to the payment of foreign
exchange premium or fees as the Central Bank may deem reasonable.
In the negotiation, contracting and issuance of any loan, credit and
evidence of indebtedness under this Section, the President of the
Philippines may, if deemed by him upon recommendation of the Authority
to be necessary or justified and when made a condition by the foreign
creditor to the issuance of such loans, credits, or instruments of
indebtedness, agree to waive the application of any law granting
preference or imposing restrictions on international competitive
bidding, such as, but not limited to, Commonwealth Act Numbered Five
Hundred Forty-one: Provided, however, That in every case where
competitive bidding is agreed upon in the purchase of machineries,
equipment, materials and supplies financed out of proceeds of such
loans, credits and instruments of indebtedness, preference may be
granted in favor of such machineries, equipment, materials and supplies
produced, processed or manufactured in the Philippines at such rate and
in such manner as may be agreed upon from time to time with the entity
or institution providing financing for the project.
SEC. 8.
Tax Treatment of Merchandise in the Areas. — Raw materials,
supplies, articles, equipment, machineries, spare parts and wares of
every description, except those prohibited by law, brought in the Areas
and utilized in the production, storing, packing and shipment of goods
meant for foreign markets, shall not be subject to customs duties and
internal revenue taxes, and laws and regulations relating thereto, nor
to local tax ordinances, the provisions of law to the contrary
notwithstanding.
Determination of those commodities, or the
portion thereof, to be accorded these privileges shall be vested in the
Authority subject to the approval of the Secretary of Finance. For this
purpose, the Secretary of Finance is hereby empowered to rule on the
provision of tax exemption of merchandise imported into the Areas by
enterprises operating therein.
Tax Exemption of Enterprises Operating in the Areas.
SEC. 9. Tax Exemption of
Enterprises Operating in the Areas. — Aside from the tax privileges
accorded those of the enterprises operating in the Areas who are
likewise registered with the Board of Investments, all industries or
firms operating in the Areas shall be exempt from the payment of local
taxes to the barrio, municipality, city or province, as the case may be,
where their respective Areas are located. However, as stipulated in
Profit Character of the Authority; Exemption from Taxes.
SEC. 10. Profit Character of the Authority;
Exemption from Taxes. — The Authority shall be operated for profit
and fifty (50) percent of such profit shall be turned over to the
Philippine Veterans Investment Development Corporation and the remaining
balance shall be plowed back for operation, maintenance and
administration of the Industrial Areas and the Authority, to pay its
indebtedness and obligations, in furtherance and effective
implementation of the policy enunciated in Section 1 of this Decree. In
consonance therewith, the Authority is hereby declared exempt from all
internal revenue taxes as well as tariff and custom duties on imports of
capital goods required for its operations, as well as all wharfage dues
and such other custom fees, charges and dues, of whatever nature and
kind, in the conduct and exercise of its powers, functions and
operations.
The foregoing exemptions may however be entirely or partially
lifted by the President of the Philippines upon recommendation of the
Secretary of Finance if the President shall find the Authority to be
self-sustaining and financially capable by then to pay such taxes,
customs duties, fees and other charges, after providing for debt service
requirements of the Authority and its projected capital and operating
expenditures.
Road Networks in the Areas.
SEC. 11. Road Networks in the Areas. — The road
networks within the Areas are hereby declared to be exclusive property
of the Authority. However, as part of the governmental function of the
Authority, they shall get priority in the allocation of monies coming
from the highway special fund to be used in the construction, repair or
maintenance of such roads, therein, the provisions of law, executive
orders, rules and regulations to the contrary notwithstanding.
Eminent Domain.
SEC. 12. Eminent Domain. — For the acquisition of
rights of way, or of any property for the establishment or expansion of
the PHIVIDEC Industrial Areas, or for housing projects for the
employees working in such Areas, or properties for the establishment and
construction of residential and commercial areas as may be necessary
for the proper attainment of the objectives of this Decree or for the
protection of watershed areas, or properties for the construction of
dams, reservoirs, wharves, priers, docks, quays, warehouses and other
terminal facilities, structures and approaches thereto, or for the
acquisition of any properties for use by the Authority in the necessary
course of its affairs, business and the exercise of its powers herein,
the Authority shall have the right and power to acquire the same by
purchase, by negotiation or by expropriation proceedings. For the
maximum industrial development of the Areas, the properties so acquired
or expropriated may thereafter be resold or leased by the authority to
area enterprises under such terms condition it may impose. Should the
authority elect to exercise the right of eminent domain, expropriation
proceedings shall be maintained by and in the name of the Authority and
it may proceed in the manner provided for by law.
Miscellaneous.
SEC. 13. Miscellaneous. — Without prejudice to
the provisions of this Decree, nothing herein provided shall divest or
deprive courts of justice, civil or military, of their jurisdiction, in
the proper cases, over civil or criminal suits or actions arising from
acts or omissions within the Areas.
All heads of Departments,
Agencies, Offices and instrumentalities of the National Government as
well as political subdivisions are hereby enjoined to extend full
cooperation and assistance to the Authority in the exercise of its
powers and duties and for the maximum accomplishment of the policy
declared herein.
Repealing Clause.
SEC. 14. Repealing Clause. — The
provisions of all laws, decrees, instructions, executive orders,
proclamations, administrative orders, rules and regulations or parts
thereof which are inconsistent with the provisions of this Decree are
either repealed or modified accordingly.
Separability Clause.
SEC. 15. Separability Clause. — The provisions of
this Decree are hereby declared to be separable; and in the event any
one or more of such provisions are held unconstitutional, the validity
of other provisions shall not be affected.
Effectivity.
SEC. 16. Effectivity. — This Decree shall take
effect upon its approval.
Done in the City of Manila, this 13th day of August in the
year of Our Lord, nineteen hundred and seventy-four.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary
Section 4 (h), a real property tax shall be collected by the Authority
from each of the enterprises operating within the Areas, one-fourth of
which shall be turned over to the local government concerned.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
