FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SIXTY-THREE HUNDRED NINETY-FIVE ENTITLED “AN ACT REVISING THE CHAPTER OF THE NATIONAL POWER CORPORATION,” AS AMENDED B…

WHEREAS, the accelerated power expansion program of the
National Power Corporation involving as it does the construction of generation
facilities in Luzon, Visayas and Mindanao and the setting up of transmission
line grids require a greater decree of corporate flexibility in the
implementation of said power program as well as in corporate management;

WHEREAS, in pursuing said accelerated power expansion
program for generation and transmission facilities, the present capitalization
of P8 Billion and the ceiling of foreign borrowing pegged at $4 Billion would be
rendered insufficient by the year 1987 and, therefor, a corresponding increase
thereon is necessary in order that such programs would be successfully
completed;

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 as follows:

SECTION 1. Section 5 of Republic Act Numbered Sixty-Three
Hundred Ninety-Five, as amended, is hereby amended with the first and second
paragraphs thereof duly revised to read as follows:

“SECTION 5. Capital Stock of the Corporation—The
authorized capital stock of the Corporation shall be Fifty Billion Pesos
(P50,000,000,000.00) divided into Five Hundred Million (500,000,000) 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 Act Numbered Four
Thousand Eight Hundred Ninety-Seven.

“The remaining Forty-Nine Billion Seven Hundred Million Pesos shall be
subscribed by the Government of the Republic of the Philippines and shall be
paid as follows:

“(a) The sum of Twenty-Nine Million Two Hundred Sixty-Seven Thousand Six
Hundred Pesos representing outstanding cost and interest of reparation goods
procured by the Corporation pursuant to the provisions of Republic Act Numbered
Seventeen Hundred Eighty-Nine, shall be additional paid-in subscription of the
Government of the Philippines for Two Hundred Ninety-Two Thousand Six Hundred
Seventy-Six shares of stock of said capital stock.

“(b) The balance of said subscription shall be paid by the conversion into
equity capital of the existing bonded indebtedness, cost of reparations goods
that may be allocated in the future, and surpluses of the Corporation and in the
absence thereof, from an annual appropriation of Two Hundred Million Pesos which
is hereby appropriated out of any funds in the National Treasury not otherwise
appropriated, be they collections from any or all taxes accruing to the general
fund or proceeds from loans, the issuance of bonds, treasury bills or notes
which are hereby authorized to be incurred or to be issued by the Secretary of
Finance for the purpose, such annual appropriation to be programmed and released
by the Budget Commission in accordance with the schedule of cash requirements to
be submitted by the Corporation; Provided, that this annual
appropriation of Two Hundred Million Pesos and the programming and release
thereof shall remain in force until the balance of the unpaid subscription of
the Government to the capital stock of the Corporation shall have been paid in
full.”

SECTION 2. Section 6 of the same Act is hereby amended to
read as follows:

“SECTION 6. The National Power Board; its composition;
compensation of members; qualifications; powers and duties:—The corporate
powers of the Corporation shall be vested in and exercised by a Board of seven
members consisting of a Chairman, Vice-Chairman and five directors who shall be
appointed by the President of the Philippines.

“The President of the Corporation shall be the ex-officio Vice-Chairman of
the Board.

“The said members of the Board shall serve for terms of three years, except
that any person appointed to fill a vacancy shall serve only for the unexpired
term of the member whom he succeeds.

“The Board shall meet as often as may be necessary upon call of the Chairman
of the Board or upon call by a majority of all the Board members.

The members of said Board shall receive a per diem of not to exceed Five
Hundred Pesos for each regular or special meeting of the Board actually attended
by them, and upon approval of the Secretary of Energy, shall receive such other
allowances as the Board nay prescribe, any provision of law to the contrary
notwithstanding.

“A majority of the members of the Board shall constitute a quorum for the
transaction of business.

“The Board, shall, moreover, have the following specific powers and
duties:

“(a) To formulate and adopt policies and measures for the management and
operation of the Corporation;

“(b) To adopt an annual and supplemental budget of receipts and expenditures
of the Corporation according; to its requirements;

“(c) To organize, reorganize and determine the Corporation’s organization
structure and staffing pattern; abolish and create offices and positions; fix
the number of its officers and personnel; transfer and re-assign such officers
and personnel; fix their compensation, allowances and benefits, the provisions
of Presidential Decree No. 985 to the contrary notwithstanding;

“(d) To fix the compensation of the President of the Corporation who shall be
appointed by the President of the Philippines; and to appoint and fix the
compensation of other corporate officers;

“(e) For cause, to suspend or remove any corporate officer appointed by the
Board;

“(f) To adopt and set down guidelines for the employment of personnel on the
basis of merit, technical competence and moral character;

“(g) To take care that in fixing the rates and fees to be charged by the
Corporation considerations of adequacy, reliability and sustained power service
at the least possible cost to the public and of limited return on investments as
proscribed in section 5 hereof, shall be taken;

“(h) Any provision of law to the contrary notwithstanding to write off bad
debts.”

SECTION 3. Section 7 of the same Act is hereby amended, to
read as follows:

“SECTION 7. The President of the Corporation, his powers
and duties; and other Corporate Officers and employees of the
Corporation:—The President of the Corporation who shall be the Chief
Executive Officer of the Corporation, shall be assisted by such number of
Corporate Officers and employees as may be deemed necessary by the Board of
Directors of the Corporation.

“The President of the Corporation shall have the following powers and
duties:

“(a) To execute and administer the policies and measures approved by the
Board, and have the responsibility for the efficient discharged of management
functions;

“(b) To submit for the consideration of the Board such policies and measures
which he deems necessary to carry out the purposes and provisions of this
Act;

“(c) To direct and supervise the operation and internal administration of the
Corporation and, for this purpose, may delegate some or any of his
administrative responsibilities and duties to other officers of the
Corporation;

“(d) Subject to the guidelines and policies set up by the Board, to appoint
and fix the number and compensation of subordinate officials and employees of
the Corporation; and for cause, to remove, suspend or otherwise discipline any
subordinate employee of the Corporation;

“(e) To prepare an annual report to the Board on the activities of the
Corporation at the close of each fiscal year and upon approval thereof, submit a
copy to the President of the Philippines and to such other agencies as may be
required by law;

“(f) To represent the Corporation in all dealings and transactions with other
offices, agencies and instrumentalities of me Government and with all persons
and other entities, private or public, domestic or foreign;

“(g) To exorcise such other powers and duties as may be vested in him by the
Board from time to time.

“The Commission on Audit shall appoint a representative who shall be the
Auditor of the Corporation. In carrying out his responsibilities, he shall be
assisted by such number of personnel as shall be necessary, whose appointments
shall be subject to the approval of the Board. The salaries of the Auditor and
his staff shall be fixed and approved by the Board.”

SECTION 4. Section 8 of the same Act is hereby amended to
read as follows:

“(a) Domestic Indebtedness—Whenever the Board deems it necessary for
the Corporation to incur indebtedness by contracting loans with domestic
financial institutions or to issue bonds to carry out the purpose for which the
Corporation has been organized, it shall, by resolution, approved by at least
four members of the Board, so declare and state the purpose for which the
proposed, debt is to be incurred and such terms and conditions as it shall deem
appropriate for the accomplishment of the said purpose; Provided, that
in the case of bond issues, the same shall be subject to the approval of the
President of the Philippines upon recommendation of the Secretary of
Finance.

“The bonds issued under the authority of this subsection shall be exempt from
the payment of all taxes by the Republic of the Philippines, or by any
authority, branch, division or political subdivision thereof which facts shall
be stated upon the face of said bonds. Said bonds shall be receivable as
security in any transaction with the Government in which such security is
required.

“The Republic of the Philippines hereby guarantees the payment by the
Corporation of both the principal and the interest of the bends issued by said
Corporation by virtue of this Act, and shall pay such principal and interest in
case the Corporation fails to do so, and there are hereby appropriated, out of
the general funds in the National Treasury not otherwise appropriated, the sums
necessary to make the payments guaranteed by this Act; Provided, That
the sums so paid by the Republic of the Philippines shall be refunded by the
Corporation; Provided, further, That the Corporation shall set aside
five per centum of its annual net operating revenues before interests as a
reserve or sinking fund to answer for amounts advanced to it by the National
Government for any loan, credit and indebtedness contracted by the former for
which the latter shall be answerable as primary obligor or guarantor under the
provisions of this Act; Provided, furthermore, That the setting aside
of the amounts mentioned herein shall automatically cease the moment the
accumulated sinking fund or reserve exceeds the amounts advanced to the
Corporation by the National Government under this Act; And, Provided,
finally, That the Corporation may periodically make partial payments to the
National Government out of the said reserves.

“(b) Foreign Loans—The Corporation is hereby authorized to contract
loans, credits, in any convertible foreign currency, or capital goods, and
indebtedness from to time to time from foreign governments, or any international
financial institution or fund source, or to issue bonds, in such amount and in
any foreign currency 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 on behalf of the Corporation, one or several loans, for the purpose of
assisting in the reconstruction, or promoting the development of the economy of
the country.

“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 on
behalf of the Republic of the Philippines, the payment of the loans, credits,
indebtedness and bonds issued up to the amount herein authorized, which shall be
over and above 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.

“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 Eighty-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 of
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.

“The loans, credits and indebtedness contracted under this subsection and the
payment of the principal, interest and 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.”

SECTION 5. A new section shall be inserted to be known as
Section 160A of the same Act, to read as follows:

“SECTION 16-A—Transitory Provisions:

“(a) The word “President” in Section 3(k) of this Act shall refer to the
President of the Philippines;

“(b) The phrase “General Manager of the Corporation” in this Act, as amended,
shall mean the President of the Corporation; And further, the phrase “Regional
Manager” in this Act, shall mean Corporate Officer;

“(c) Until the President of the Philippines appoints the President of the
Corporation, the incumbent General Manager of the Corporation shall, as may be
determined by the Board, either act as President of the Corporation or hold such
office with such duties and responsibilities as shall be determined by the
Board; Provided, That, upon the assumption of office by the President
of the Corporation appointed by the President of the Philippines, said incumbent
General Manager of the Corporation shall without any diminution in salary,
allowances and benefits, hold such office and perform such duties and
responsibilities as shall be determined by the
Board.”

SECTION 6. Repealing Clause. All laws, decrees,
executive orders, administrative orders, rules and regulations inconsistent
herewith are hereby repealed, amended or modified accordingly.

SECTION 7. This Decree shall take effect immediately.

Done in the City of Manila, this 25th day of April, in the year of Our Lord,
nineteen hundred and seventy-eight.

			(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines
	By the President:
	(Sgd.) JACOBO C. CLAVE
		Presidential Executive Assistant