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

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 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.”

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.”

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.

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.”

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.”

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.