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WHEREAS, there is a pressing need for the government to tap potential resources from which funds can be generated to finance its many infrastructure and socio-civic development projects, particularly within the Metropolitan Manila area, intended to improve the living conditions of the residents therein; thus, promote their welfare and insure healthy environmental growth;

WHEREAS, to complement the development of the tourist industry in the Philippines which has become one of the country's leading foreign-exchange earners, there is likewise a need to provide for more amusement and recreation places that can serve as additional tourist attractions for foreign visitors;

WHEREAS, to prevent the proliferation of illegal casino/s or club/s conducting games of chance in the rampant manner they were being undertaken before the advent of the New Society with no benefit or advantage to the government, there is a compelling need for the government to now intervene and institute thru an appropriate instrumentality the centralization of all games of chance authorized to be conducted throughout the Philippines for more effective control, direction and supervision:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby order and decree the creation and organization of a Philippine Amusements and Gaming Corporation, to be governed by this decree and its by-laws in accordance with the following:

Section 1. Declaration of Policy. — It is hereby declared to be the policy of the state to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by laws in order to attain the following objectives:

1. To centralize and integrate the right and authority to operate and conduct games of chance into one corporate entity to be controlled, administered and supervised by the government;

2. To establish and operate clubs and casinos sports gaming pools (basketball, football, etc.) and such other, for amusement and recreation, including/games of chance, which may be allowed by law within the territorial jurisdiction of the Philippines which will (1) generate sources of additional revenue to fund infrastructure and socio-civic projects, such as flood control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan Centers/Nutritional Programs, Population Control and such other essential public services; (2) create recreation and integrated facilities which will expand and improve the country's existing tourist attractions; (3) minimize, if not totally eradicate, the evils, mal-practices and corruptions that normally are found prevalent in the conduct and operation of gambling clubs and casinos without direct government involvement.  

Sec. 2. Philippine Amusements and Gaming Corporation (PAGCOR). — Creation and Purpose. To implement state policy and pursue the objectives setforth in the preceding section, there is hereby created a body corporate to be known as the Philippine Amusements and Gaming Corporation, hereinafter referred to as the "Corporation", which shall have its principal office in the Greater Manila Area. The Corporation may establish such offices, agencies, subsidiaries, or branches in the Philippines as its operations would require and its Board of Directors may determine.

Sec. 3. Corporate Powers. — The Corporation shall have the power:

(a) to prescribe its by-laws;

(b) to adopt, alter and use a corporate seal;

(c) to make contracts and to sue and be sued:

(d) to own real or personal property and to sell, mortgage or otherwise dispose of the same;

(e) to employ such officers and personnel as may be necessary to carry on its business;

(f) to acquire, lease or maintain, whether on land, water, orr, personal property and such other equipment and facilities as may be necessary to carry out its purposes;

(g) to import, buy, sell, or otherwise trade or deal in merchandise, goods, wares and objects of all kinds and descriptions that may be necessary to carry out the purposes for which it has been created;

(h) to enter into, make, perform, and carry out contracts tracts of every kind and for any lawful purpose pertaining to the business of the corporation, or in any manner incident thereto, as principal agent or otherwise, with any person, firm, association, or corporation;

(i) to do anything and everything necessary, desirable, convenient, appropriate, suitable or proper for the accomplishment of any of the purposes or the attainment of any of the objects or the furtherance of any of the powers herein stated, either alone, or in association with other corporations, firms or individuals, and to do every other act or thing incidental or pertaining to, or growing out of, or connected with the aforesaid purposes, objects, or powers, or any part thereof;

(j) to borrow money from local, or foreign sources as may be necessary for its operation;

(k) to invest its funds as the corporation may deem proper and necessary in any activity related to its principal operations, including in any bonds or securities issued and guaranteed by the Government of the Philippines;

(1) to establish and maintain clubs, casinos, branches agencies or subsidiaries, or other units anywhere in the Philippines as may be needed by the Corporation and reorganize or abolish the same as it may deem proper;

(m) to perform such other functions as may be provided by law.

Sec. 4. Authorized Capital Stock. — The Corporation shall have a capital stock divided into one million voting and no par value shares, to be subscribed, paid for and voted as follows:

(a) 600,000 shares of stock to be subscribed and paid for by the government of the Republic of the Philippines at an original issue value of P5.00 per share.

(b) 400,000 shares remaining may be subscribed by persons or entities acceptable to the Board of Directors at issue value to be determined by such 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 person or persons as he may designate.

The voting power pertaining to shares of stock subscribed by private persons or entities shall be vested in them.

Sec. 5. Board of Directors. — The Corporation shall be governed and its activities be directed, controlled and managed by a Board of Directors that shall be composed of five (5) ex-officio members, namely: (1) The Chairman of the National Development Corporation, who shall act as Chairman; (2) The Secretary of Public Works; (3) The Secretary of the Department of Social Welfare; and two 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 or until their successors shall have been appointed and qualified.

Sec. 6. Functions and Duties of the Board of Directors. —

1. The Board shall allocate and distribute, with the approval of the President, the earnings of the Corporation earmarked to finance infrastructure and socio-civic projects.

2. The Board shall designate the private/commercial bank that shall act as the Depository Bank of the Corporation and/or the Trustee of the funds of the Corporation.

3. The Board shall prepare and approve at the beginning of each calendar year the budget that may be necessary under any franchise granted to it, to insure the smooth operation of the Corporation; it shall also have the right to evaluate and approve budgets submitted to it by other corporations or entities with which it might have any existing contractual arrangements.

4. The Board shall submit to the President before the end of February of each year a list of all infrastructure and/or socio-civic projects that might have been financed from the Corporation's earnings. It shall likewise submit such periodic or other reports as may be required of it from time to time.

Sec. 7. Auditor. — The Commission on Audit shall appoint, subject to the approval of the Board, a representative who shall be the Auditor of the Corporation 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 fixed by the Chairman of the Commission on Audit, with the advice of the Board, and said salaries and other expenses for the auditor's Office shall be paid by the Corporation.

Sec. 8. Exemptions. — All positions of the Corporation, whether technical, administrative, professional, or managerial, are exempt from the provisions of the Civil Service Law and the rules and regulations of the Wage and Position Classification Office and shall be governed only by the personnel management policies set by the Board of Directors.

Sec. 9. Repealing Clause. — All laws, decrees, executive orders, administrative orders, rules or regulations inconsistent herewith are hereby repealed, amended or modified accordingly.

Done in the City of Manila, this 1st day of January, in the year of Our Lord, nineteen hundred and seventy-seven.

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Since 19.07.98.