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

• Number: Presidential Decree No. 938
• Sections: 13

Preamble

WHEREAS, in view of the accelerated expansion program for

generation and transmission facilities which includes nuclear power

generation, the present capitalization of National Power Corporation

(NPC) and the ceilings for domestic and foreign borrowings are deemed

insufficient;

WHEREAS, in the implementation of the power expansion

program, NPC is encountering difficulties in the acquisition of land and

land rights which unnecessarily stall and delay the prosecution of the

works to the prejudice of the projects;

WHEREAS, corollary to such right-of-way problems, a

definitive declaration of the just compensation for the land and land

rights acquired by NPC for its projects should be effected;

WHEREAS, in the application of the tax exemption provisions

of the Revised Charter, the non-profit character of NPC has not been

fully utilized because of restrictive interpretations of the taxing

agencies of the government on said provisions;

WHEREAS, in view of the changing economic condition

obtaining in the country, the ceilings provided for in the award of

contracts for construction and furnishing of supplies, materials and

equipment have been rendered inadequate;

WHEREAS, in order to effect the accelerated expansion

program and attain the declared objective of total electrification of

the country, further amendments of certain sections of Republic Act No.

6395, as amended by Presidential Decrees Nos. 380, 395 and 758, have

become imperative;

WHEREAS, the substantial expansion of the power development

program to be implemented by NPC requires revitalization of the

organization and flexibility in responding to the dynamic changes in its

program;

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

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

do hereby order and decree as follows: SECTION 1. Section 3 (h)

of Republic Act No. 6395 as amended, is hereby deleted. The new section

shall read as follows:

"(h) To acquire, promote, hold, transfer, sell, lease, rent,

mortgage, encumber and otherwise dispose of property incident to or

necessary, convenient or proper to carry out the purposes for which the

Corporation was created."

Section 2

SEC. 2. Section 3 (i) of the same Act is further amended by

deleting paragraphs (a), (b) and (c) thereof. A new section is hereby

inserted to read as follows:

"(i) To construct works across, or otherwise, any stream,

water-course, canal, ditch, flume, street, avenue, highway, or railway

of private and public ownership, as the location of said works may

require; Provided, that said works be constructed in such a

manner as not to endanger life or property; And Provided,

further, that the stream watercourse, canal, ditch, flume, street,

avenue highway or railway so crossed or intersected be restored as near

as possible to their former state or in a manner not to impair

unnecessarily their usefulness. Every person or entity whose

right-of-way or property is lawfully crossed or intersected by said

works shall not any such crossings or intersections and shall grant the

Corporation or its representatives, the pro-per authority for the

execution of such work. The Corporation is hereby given the right-of-way

to locate, construct, and maintain such works over and throughout the

lands owned by the Republic of the Philippines or any of its branches

and political subdivisions. The Corporation or its representatives may

also enter upon private property in the lawful performance or

prosecution of its business or purposes, including the construction of

the transmission lines thereon; Provided, that the owner of such

private properly shall be paid the just compensation therefor in

accordance with the provisions hereinafter provided; Provided,

further, that any action by any person claiming compensation and/or

damages shall be filed within five (5) years after the right-of-way,

transmission lines, sub-stations, plants or other facilities shall have

been established; Provided, finally, that after the said period

no suit shall be brought to question the said rights-of-way,

transmission lines, substations, plants or other facilities nor the

amounts of compensation and, or damages involved."

Section 3

SEC. 3. Section 3 (j) of the same Act is hereby amended to

read as follows:

"(j) To exercise the right of eminent domain for the purpose of

this Act in the manner provided by law for instituting condemnation

proceedings by the national, provincial, and municipal government as

modified or amended by Presidential Decree No. 42."

Section 3-A

Section 3-A of the same Act to read as follows:

"SEC. 3-A. In acquiring private property or private

property rights through expropriation proceedings where the land or

portion thereof will be traversed by the transmission lines, only a

right-of-way easement thereon shall be acquired when the principal

purpose for which such land is actually devoted will not be impaired,

and where the land itself or portion thereof will be needed for the

projects or works, such land or portion thereof as necessary shall be

acquired.

In determining the just compensation of the property or property

sought to be acquired through expropriation proceedings, the same

shall—

"(a) With respect to the acquired land or portion thereof, not

exceed the market value declared by the owner or administrator or

anyone having legal interest in the property, or such market value as

determined by the assessor, whichever is lower.

"(b) With respect to the acquired right-of-way easement over

the land or portion thereof, not exceed ten per cent (10%) of the market

value declared by the owner or administrator or anyone having legal

interest in the property, or such market value as determined by the

assessor, whichever is lower.

"In addition to the just compensation for easement of

right-of-way, the owner of the land or owner of the improvement, as the

case may be, shall be compensated for the improvements actually damaged

by the construction and maintenance of the transmission lines, in an

amount not exceeding the market value thereof as declared by the owner

or administrator, or anyone having legal interest in the property, or

such market value as determined by the assessor whichever is lower; Provided,

that in cases any buildings, houses and similar structures are actually

affected by the right-of-way for the transmission lines, their

transfer, if feasible, shall be effected at the expense of the

Corporation: Provided, further, that such market value

prevailing at the time the Corporation gives notice to the landowner or

administrator or anyone having legal interest in the property, to the

effect that his land or portion thereof is needed for its projects or

works shall be used as basis to determine the just compensation

therefor."

Section 4

SEC. 4. A new section shall be inserted to be known as

Section 5

SEC. 5. Section 5 of the same Act is hereby amended with

first and second paragraphs thereof to read as follows:

"The authorized capital stock of the Corporation is Eight

Billion Pesos (8,000,000,000.00) divided into eighty million

(80,000,000) 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 Art Numbered Four Thousand Eight Hundred

Ninety-Seven.

The remaining Seven Billion Seven Hundred Million Pesos shall be

subscribed by the Government of the Republic of the Philippines and

shall be paid as follows:

* * * * * * *

Section 6

SEC. 6. The first paragraph of Section 7 of the same Act is

hereby further amended to read as follows:

"The Management of the Corporation shall be vested in the

General Manager, assisted by such number of Assistant General

Managers, officials, officers and employees as may be deemed necessary

by the Board of Directors of the Corporation to meet the management and

technical manpower requirements of its expanding power development

projects, which reorganization shall be subject to the approval

of the President."

Section 7

SEC. 7. Section 8 (a), last paragraph of the same Act is

hereby further amended to lead as follows:

"The total principal indebtedness of the Corporation under this

subsection, exclusive of interest, shall not at any time exceed Twelve

Billion Pesos (P12,000,000,000.00)."

Section 8

SEC. 8. The first paragraph of Section 8 (b) of the same Act

is hereby further amended and a new paragraph shall be inserted between

the third and fourth paragraph of said section which shall both read as

follows:

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

contract loans, credit 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 interests,

shall not exceed Four Billion United States Dollars (US

$4,000,000,000.00) 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.

* * * * * * *

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 Eight-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

or 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.

* * * * * * *

Section 9

SEC. 9. Section 10 of the same Act is hereby amended to

read as follows:

"SEC. 10. Construction, Repair Works, or Contracts for

Services and Furnishing of Supplies, Materials and Equipment Awarded

Upon Public Bidding: Exceptions.—All works of construction or repair of

the Corporation as well as contracts for the services and furnishing of

supplies, materials and equipment shall be awarded by the Corporation in

accordance with ceilings and rules imposed by the Board; Provided,

however, that these do not conflict with existing Executive Orders

and/or presidential issuance on awards of contracts."

Section 10

SEC. 10. Section 13 of the same Act is hereby further

amended to read as follows:

"SEC. 13. Non-profit Character of the Corporation:

Exemption from All Taxes, Duties Fees, Imports and Other Charges by the

Government and Government Instrumentalities. The Corporation shall be

non-profit shall devote all its returns from its capital investment as

well as excess revenues from its operation, for expansion. To enable the

Corporation to pay its indebtedness and obligations and in furtherance

and effective implementation of the policy enunciated in Section One of

this Act, the Corporation, including its subsidiaries, is hereby

declared exempt from the payment of all forms of taxes, duties, fees,

imposts as well as costs and service fess including filing fees, appeal

bonds, supersedes bonds, in any court or administrative

proceedings."

Section 11

SEC. 11. This Decree is hereby made part of the law of the

land, and all provisions of existing laws, executive and administrative

orders, or parts thereof in conflict with this Decree are hereby

modified and repealed.

Section 12

SEC. 12. This Decree shall take

effect immediately.

Done in the City of Manila, this 27th day of

May, 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