Presidential Decree No. 900 (PD 900) — Creating the Philippine National Lines, Defining Its Powers and Functions, Appropriating Funds Therefor and for Other Purposes.
WHEREAS, it is the policy of the government to dispose of
its shares in the Philippine National Lines, to the private sector at a
propitious time;
WHEREAS, the government, cognizant of the vital role that
shipping plays in the economic growth of the country, has given various
incentives to Philippine shipping companies for the accelerated
expansion and modernization of their fleet;
WHEREAS, despite these incentives given to the industry,
private shipping companies have failed to expand and modernize their
fleet due to the heavy capital requirement involved;
WHEREAS, statistics show that in 1974, the Philippine
overseas fleet carried only a measly 7.8% of the country's foreign trade
which accounted for a drain of some 600 million dollars representing
freight payments to foreign flag carriers;
WHEREAS, the situation is expected to get worse in the years
to come unless the government will take an active part by way of
pioneering the operation of a national line that will augment but not
compete with the fleet requirement of the Philippine international
trade;
WHEREAS, such government involvement and initiative shall
further the national objective and policy of developing national
self-reliance, best serve the interest of national security, and
facilitate the performance of other essential governmental functions;
WHEREAS, a well developed shipping industry shall serve to
meet the market demands and service requirements of neighboring
countries in Southeast Asia.
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 the following:
Creation of the PNL.
SECTION 1. Creation of the PNL.—There is hereby
created a body corporate and politic to be known as the Philippine
National Lines, hereinafter referred to as PNL, which shall be governed
by this Decree and its by-laws as authorized hereunder and shall have
succession for a period of fifty (50) years from and after the date of
approval of this Decree. The principal office of the PNL shall be
located in a place to be determined by the Board of Directors.
Purpose of the PNL.
SEC. 2. Purpose of the PNL.—The PNL, by itself or
through its subsidiary/subsidiaries, shall undertake all manner of
business activity for the establishment of a reliable shipping services
that shall include but not be limited to:
The ownership, lease, charter, management and operation
of merchant vessels, whether for cargo or passengers on a
scheduled, non-scheduled or charter basis on domestic and/or
international scale;
Ship brokerage and other related or supportive
activities;
The ownership, establishment, management and operation
of shipbuilding and ship repair facilities in order to
provide adequate services to the shipping industry.
Powers of the PNL.
SEC. 3. Powers of the PNL.—In order to accomplish
the foregoing corporate purpose, the PNL shall be vested with the
following powers:
To prescribe, and thereafter to amend and repeal,
its by-laws not inconsistent with this Decree;
To adopt and use a seal and alter it when
necessary;
To sue and be sued in any court;
To carry on any other lawful business whatsoever in pursuance
of, or in connection with, the foregoing corporate purpose;
To enter into, make, perform and carry out
contracts of every kind and description for the foregoing corporate
purpose with any person, firm or association or corporation,
domestic or foreign;
To have one or more offices in and outside of the
Philippines, and to conduct its business and exercise its powers
throughout and in any part of the Republic of the
Philippines and/or in any or all foreign countries, states and
territories;
To acquire, hold, mortgage and alienate personal
and real property in the Philippines or elsewhere;
To purchase, hold, alienate, mortgage, pledge or otherwise
dispose of the shares of the capital stock of, or any bond, security of,
other corporations or associations of this or any other country, and
while the owner of said stock, to exercise all the rights of ownership
including the right to vote thereon;
To borrow funds from any source, private or
government, foreign or domestic;
To invest, own or otherwise participate in equity in any
establishment firm or entity engaged in the industry; to form, organize,
invest in, establish and maintain subsidiary or subsidiaries;
To exercise such powers and perform such acts as may be
necessary to carry out the purpose for which the PNL was established or
which from time to time may be declared by the Board of Directors to be
necessary, useful, incidental or auxiliary to accomplish such
purpose.
Capital Stock Appropriation.
SEC. 4. Capital Stock Appropriation.—The PNL shall
have a capital stock divided into FIVE MILLION no-par shares to be
subscribed, paid for, and voted on, as follows:
Two million shares of stock shall be subscribed
and paid for the Government of the Republic of the Philippines.
Such shares shall have an initial value of Forty Pesos
(P40.00) per share and may be redeemed by the PNL and resold only to
the National Government at re-issue value to be determined by the
Board of Directors and approved by the President of the
Philippines. For this purpose, the amount of EIGHTY MILLION PESOS out of
the General Fund, not otherwise appropriated, is hereby appropriated
for the payment of the two million shares subscribed by the Republic
of the Philippines.
One million shares of stock shall be subscribed
and paid for by the National Development Company at issue value to be
determined by the Board of Directors of the PNL.
Subject to the approval of the President of the Republic
of the Philippines, the remaining two million shares shall
be subscribed to by the Government of the Republic of the Philippines
or any of its national financial institutions or
government-owned or controlled corporations or the private
sector to the extent of up to twenty-five (25%) per-centum of the
capital stock at issue values to be determined by the Board of
Directors of the PNL.
Twenty-five percentum of the value of all stock
subscribed under paragraphs (b) and (c), this section,
shall be paid for at the time of subscription, and the balance
thereof shall be subject to call upon a majority vote of
the Board of Directors.
The voting power pertaining to shares of stock
subscribed by the Government of the Republic of the
Philippines shall be vested in the President of the
Philippines or in such persons as he may designate.
The voting power pertaining to shares of stock
subscribed by the National Development Company shall be
vested in the Chairman of the Board of Directors.
The voting power pertaining to shares of stock
hereinafter subscribed by or transferred to national financial
institutions or government-owned or controlled corporations
or to the private sector shall be vested in the
Chairman of their respective Board of Directors/Trustees, or in
the absence of the Board of Directors/Trustees, in their
respective chief executive official.
Each share of stock shall represent one vote. Issuances or
transfers of shares be allowed only upon offer of such shares for
subscription or purchase having first been made to the Government of the
Republic of the Philippines. Any agreement, contract, arrangement,
scheme or plan that shall transfer ownership and voting rights over such
shares such that the majority control by the National Government over
the total number of voting shares of the PNL shall be impaired is
prohibited.
Authority for Fund Appropriation.
SEC. 5. Authority for Fund Appropriation.—In
addition to the appropriation of funds authorized under Section 4,
paragraph (a), there are hereby set aside and appropriated from the
General Fund, not otherwise appropriated, such amounts as may be
necessary to pay for (1) the total reissue value of shares of stock
whenever the same are resold by the PNL to the National Government under
Board of Directors.
SEC. 6. Board of Directors.—The PNL shall be
governed by a Board of Directors consisting of nine (9) members duly
elected as hereinafter provided for terms of three (3) years who shall
be paid per diem of Two Hundred Fifty Pesos for each session: Provided,
That the first members and chairman shall be appointed by the President
of the Philippines and shall serve for a term of one year or until
their successors shall have been elected as hereinafter provided. In
case of any vacancy in the Board the same shall be filled by the
President of the Philippines for the unexpired term.
Annually on the first Tuesday in March, the stockholders shall
meet to elect the members of the Board whose terms have expired, each
stockholder or proxy to be entitled to as many votes as he may have
shares of stocks. Immediately after the election, the directorate shall
be organized as such and elect from amongst themselves a chairman. Provided,
That no person shall be elected director unless he is a natural born
citizen of the Philippines, not less than thirty-five years of age, of
established integrity and has attained proficiency, expertise and
recognized competence in one or more of the following: shipping,
finance, economics, law business management, public utility or
government administration.
SEC. 7. Functions and Duties of the Board of
Directors. The general functions and duties of the Board of
Directors shall be as follows:
To prescribe and amend the by-laws of the PNL;
To appoint and fix the salaries of such executive officers and
other officials and employees as may be necessary for
the management and internal administration of the PNL, except
that the appointing power may be delegated by the Board to the
Management of the PNL;
To act as initial incorporators of any subsidiary formed
by the PNL;
To establish such number of Division and/or
Departments in the PNL as may be necessary for the accomplishment
of the corporate purpose;
To constitute appropriate standing committees that
it may deem necessary to effectively carry out its governing
powers over the affairs and activities of the PNL;
To submit to the President of the Philippines and to publish
an annual report of the condition of the PNL on or before the
31st of March of each year;
To perform such other functions and duties as
may be necessary to accomplish the purpose of the PNL or to carry
out its powers under this Decree and the by-laws prescribed
thereunder.
Auditor.
SEC. 8. Auditor.—The Commissioner on Audit shall
appoint, subject to the approval of the Board, a representative who
shall be the Auditor of the PNL and such personnel as may be necessary
to assist said representative in the performance of his duties. The
salaries of the Auditor and his staff shall be approved by the Board.
The Auditor of corporations owned or controlled by the PNL shall be
appointed by their respective Board of Directors.
Foreign Loans.
SEC. 9. Foreign Loans.—The PNL, through its
President or any duly authorized representative, upon approval by the
Board of Directors, 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
institution or fund sources, on such terms and conditions as it shall
deem appropriate for the accomplishment of its purpose and to enter
into and execute agreement and other documents specifying such
terms and conditions.
Further, 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
PNL, 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 in the name and in behalf of the Republic of the Philippines
pursuant to loan agreements entered into with foreign governments or any
international institutions or fund sources.
Transfer of Ownership and/or Operation to the Private Sector.
SEC. 10. Transfer of Ownership and/or Operation to
the Private Sector.—The provisions of this Decree and the by-laws as
authorized to be adopted thereunder notwithstanding, the Board of
Directors may, subject to approval by the President of the Philippines,
transfer to private ownership and or operation the PNL and any or all
its subsidiaries when it shall appear that undue competition is being
posed by the PNL to private shipping companies.
Transitory Provisions.
SEC. 11. Transitory Provisions.—The Chairman of
the Board shall, within thirty (30) days from the date of his
appointment, call for an organizational meeting of the Board in order
that corporate business may immediately be commenced.
Pending the appointment of the necessary executive officers
and personnel of the PNL, the Board shall be assisted by a technical
staff to be designated by the Maritime Administrator from the MARINA and
other government agencies. To defray the initial costs of operation
therefor, there is hereby appropriated the amount of ONE MILLION PESOS
(P1,000,000) for immediate release chargeable against the initial fund
appropriation of the National Government as provided in Section 4,
paragraph (a) hereof.
Separability Clause.
SEC. 12. Separability Clause.—Should any
provision of this Decree be held unconstitutional, no other provision
hereof shall be affected thereby.
Repealing Clause.
SEC. 13. Repealing Clause.—All laws, decrees,
executive orders, administrative orders, rules and regulations
inconsistent herewith are hereby repealed, amended or modified
accordingly.
Effectivity.
SEC. 14. Effectivity.—This Decree shall take
effect upon its approval.
Done in the City of Manila, this 4th day of March, in the Year
of Our Lord, Nineteen Hundred and Seventy-Six.
(Sgd.)
FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.)
JACOBO C. CLAVE
Presidential Executive Assistant
Section 4, paragraph (a), (2) any subscription of the National
Government under Section 4, paragraph (c), and (3) any subscription of
the National Government to the capital stock of subsidiaries of the PNL.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
