Capitalization.
SEC. 7. Capitalization.—The Company shall have an authorized capital of Three hundred million pesos divided into three million shares at One hundred pesos par value which shall be fully subscribed by the Republic of the Philippines and shall be paid out as follows:
The sum of Thirty million pesos, which is hereby appropriated out of any fund in the National Treasury not otherwise appropriated and from proceeds of bond issues or loans and from other sources of funds of the National Government which shall be released immediately upon the approval of this Act.
The sum of Thirty million pesos for each fiscal year thereafter for a period of nine years, from the same sources mentioned in paragraph (a) hereof, which is hereby appropriated for such subsequent years beginning with the fiscal year nineteen hundred sixty-eight.
Operating Expenses.
SEC. 8. Operating Expenses.—For the operating expenses of the Company for the fiscal year nineteen hundred sixty-seven, the sum of Five hundred thousand pesos is hereby appropriated out of any fund in the National Treasury not otherwise appropriated. For the succeeding fiscal years, the Board of Directors may appropriate out of the paid-in capital of the Company a sum not exceeding r million pesos each fiscal year for operating expenses standing annual appropriation is hereby made out of a fund in the National Treasury not otherwise appropriated of such sums as may be necessary to reimburse the Company of the total amount actually expended out of the said One million pesos for overhead expenses at the end of each fiscal year, which reimbursement shall accrue to the paid-in capital of the Company. The unexpended balance of the appropriation for overhead expenses at the fiscal year shall automatically revert to the said paid-in capital.
Procedure to Issue Bonds and Incur Indebtedness.
SEC. 9. Procedure to Issue Bonds and Incur Indebtedness.—Whenever the Board of Directors may deem it necessary for the Company to incur an indebtedness or to issue bonds to carry out the provisions of this Act, it shall by resolution so declare and state the purpose for which the proposed debt is to be incurred. In order that such resolution may be valid, it shall be passed by the affirmative vote of at least four members of the board and approved by the President of the Philippines upon the recommendation of the Secretary of Finance, after consultations with the National Economic Council and the Monetary Board of the Central Bank.
Bond Limits.
SEC. 10. Bond Limits.—The bonds issued under this provision shall in no case exceed the amount of fifty million pesos: Provided, That no single issue shall exceed ten million pesos and that no further issue shall be made if eighty per centum of the immediately preceding issue is not yet sold.
The bonds shall be issued in such amounts as will be needed at any one time, taking into account the which said bonds may be absorbed by the buying public and the fund requirements of projects ready for execution and considering further a proper balance between productive and nun-productive projects so that inflation shall be held to the minimum.
Form, Rates of Interests, etc. of Bonds.
SEC. 11. Form, Rates of Interests, etc. of Bonds.—The Secretary of Finance, in consultation with the Monetary Board shall prescribe the form, the rates of interest, the denominations, maturities, negotiability, convertibility, call and redemption of features, and all other terms and conditions of issuance, placement, sale, servicing, redemption and payment of all bonds issued by virtue of this Act.
The Bonds issued by virtue of this Act may be made payable both as to principal and interest in Philippine Currency or any readily convertible foreign currency. Said bonds shall be receivable as security in any transaction with the Government in which such security is required.
Exemption from Tax.
SEC. 12. Exemption from Tax.—The Company shall be exempt from all taxes incidental to its operations: Provided, That its subsidiary corporations shall be subject to all said taxes five years after their establishment under a graduated scale as follows: Twenty per centum of all said taxes during the sixth year, forty per centum of all said taxes during the seventh year, sixty per centum of all said taxes during the eight year, eighty per centum of all said taxes during the ninth year, and one hundred per centum of all said taxes during the tenth year after said establishment. Such exemption shall include any tax fee imposed by the government on the sale, purchase or transfer of foreign exchange. All notes, bonds and debentures and other obligations issued by the Company shall be exempt from all taxes, both as to principal and interest, except inheritance and gift taxes.
Sinking Fund.
SEC. 13. Sinking Fund.—A sinking fund shall be established in such manner that the total annual contributions thereto, accrued at such rate of interest as may be determined by the Secretary of Finance shall be sufficient to redeem at maturity the bonds issued under this Act. Said fund shall be under the custody of the Central Bank of the Philippines which shall invest the same in such manner as the Monetary Board may approved; charge all expenses of such investments to said sinking fund, and credit the same with the interest on investments and other income belonging to it.
Guarantee by the Government.
SEC. 14. Guarantee by the Government.—The Republic of the Philippines hereby guarantees the payment by the Company of both the principal and the interest of the bonds, debentures, collaterals, notes or such other obligations issued by the Company by virtue of this Act, and shall pay such principal and interest in case the Company fails to do so. In the event that the Company shall be unable to pay the said principal and interest, the Secretary of Finance shall pay the amount thereupon which is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collaterals, notes or other obligations, unless the sums so paid by the Republic of the Philippines shall be refunded by the Company within a reasonable period of time.
Subsidiary Corporations.
SEC. 15. Subsidiary Corporations.—The capital stock of the subsidiary corporations shall be subscribed in whole or in part by the Company in joint venture with private investors or the provincial or municipal government of the region, in such amounts as may be determined by the Board. As soon as the Company is organized, the Catanduanes Development Authority, the organization of which is authorized under Republic Act No. 4412, shall be deemed and shall operate as a subsidiary corporation under this Act.
CHAPTER VMANAGEMENT AND PERSONNEL
Source: Official Gazette of the Republic of the Philippines — Philippine laws are public documents (works of the government).
