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PRESIDENTIAL DECREE NO. 538
PRESIDENTIAL DECREE NO. 538 -
CREATING AND ESTABLISHING THE PHIVIDEC INDUSTRIAL AUTHORITY AND MAKING
IT A SUBSIDIARY AGENCY OF THE PHILIPPINE VETERANS INVESTMENT
DEVELOPMENT CORPORATION DEFINING ITS POWERS, FUNCTIONS AND
RESPONSIBILITIES, AND FOR OTHER PURPOSES
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WHEREAS, it
is the policy of the Government to encourage, promote and sustain the
economic and social growth of the Country;chanroblesvirtualawlibrary
WHEREAS, the provision of well-planned areas with the appropriate
infrastructure facilities will encourage and facilitate the
establishment of industries which in turn contribute to economic and
social growth;chanroblesvirtualawlibrary
WHEREAS, maximum benefit from such industrial areas can be derived by
creating an Authority with the responsibility to plan, coordinate and
when necessary, actually undertake the construction of such areas as
well as manage their operations in a professional and efficient manner;chanroblesvirtualawlibrary
WHEREAS, it is also the policy of the State to harness the full
potentials and capabilities of veterans and AFP retirees so that they
could participate fully in the enhancement of the economic development
of the country;chanroblesvirtualawlibrary
WHEREAS, the PHIVIDEC was created for the purpose of pooling the
economic resource potentials of these veterans and retirees;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution of the
Philippines, in order to effect the desired changes and reforms in the
social, economic and political structure of our society do hereby
create the PHIVIDEC Industrial Authority and make as part of the law of
the land the following;chanroblesvirtualawlibrary
Section 1. Declaration of Policy. — It is hereby
declared and reiterated to be the policy of the Government to
encourage, promote and sustain the economic and social growth of the
country and that the establishment ]of professionalized management of
well-planned industrial areas shall further this objective. chanroblesvirtualawlibrary
Section 2. Creation of the PHIVIDEC Industrial
Authority. — To carry out the above policy, a body corporate to be
known as the PHIVIDEC Industrial Authority is hereby created. The
Authority as hereinafter referred to shall be a subsidiary of the
PHILIPPINE VETERANS INVESTMENT DEVELOPMENT CORPORATION created under PD
243, as amended by PD 353. The functions of the Authority are hereby
declared governmental and proprietary.
Section 3. Creation of the PHIVIDEC Industrial Areas.
— To further carry out the above policy, there are hereby created the
PHIVIDEC Industrial Areas, hereafter referred to as the Areas, which
shall hereafter be proclaimed, designated and specified by Presidential
Proclamations.
The public land and foreshore and offshore areas portion of the Areas
so proclaimed shall be surveyed by the Bureau of Lands and conveyed in
absolute ownership to the Authority, except as hereinafter provided,
for the nominal sum of one peso for each parcel of land. Thereafter,
the proper Register of Deeds shall register the same and issue the
corresponding original certificate of title to the Authority.
The first Area which the Authority shall develop shall be that located
in the municipalities of Tagoloan and Villanueva in the Province of
Misamis Oriental, bounded on the West by Macajalar Bay, on the North by
the Taganga Creek, on the East by the Kiamo and Kirahon plateaus and
the South by the Tagoloan River containing an area of 3,000 hectares
more or less: Provided, however, that the foreshore area from Tagoloan
River, Municipality of Tagoloan, up to the Taganga Creek, Municipality
of Villanueva, and the offshore area 400 meters toward the sea from the
inshore limit between the Tagoloan River and the Taganga Creek, shall
be ceded, transferred and conveyed in absolute ownership to the
National Steel Corp. for the nominal sum of one peso. The meters and
bounds of this Area are specified in Annex "A" which is hereby made an
integral part hereof.
The Authority shall respect existing private rights until such time
that it takes possession of the properties acquired either by voluntary
or forced sale for the construction of infrastructural facilities and
other facilities needed by the Area; and provided, further, that any
new improvements to be introduced by landowners or claimants during
this period shall be first approved by the Authority in writing.
Section 4. Purpose and Specific Powers. — The
purposes and specific powers of the Authority are as follows:cralaw:red
a. To operate, administer and manage the PHIVIDEC
Industrial Areas and other areas which shall hereafter be proclaimed,
designated and specified in subsequent Presidential Proclamation; to
construct, acquire own, lease, operate and maintain infrastructure
facilities, factory buildings, warehouses, dams, reservoirs, water
distribution, electric light and power systems, telecommunications and
transportation networks, or such other facilities and services
necessary or useful in the conduct of industry and commerce or in the
attainment of the purposes and objectives of this Decree;chanroblesvirtualawlibrary
b. To take water from any public stream, river,
creek, lake, spring, waterfall or underground aquifers as may be
necessary for the attainment of the purposes of this Decree; to alter,
straighten obstruct or increase the flow of water in streams or in
water channels intersecting or connecting therewith or contiguous to
its works or any part thereof; and to undertake land reclamation as
well as own, hold, purchase or lease foreshore areas within or adjacent
or approximate to the Areas;chanroblesvirtualawlibrary
c. To acquire and hold agricultural lands in excess
of the areas permitted to private corporations or associations by the
Constitution;chanroblesvirtualawlibrary
d. To determine and regulate the enterprises to be
established within the Areas in order to ensure the implementation of
its plans for the sound development and operation of the Areas in
furtherance of the herein declared national policy;chanroblesvirtualawlibrary
e. To construct, operate and maintain or otherwise to
grant the use of or to rent, lease or let, for a consideration and
under such terms, arrangements and conditions it may deem reasonable
and proper, any and all port facilities, including stevedoring and port
terminal services, or any concession properly incident thereto or in
connection with the receipt, delivery, shipment and transfer in
transit, weighing marking, tagging, fumigating, refrigerating, icing,
storing and handling of goods, wares and merchandise; Provided,
however, that where the piers and/or harbors are owned and/or operated
by private persons, the fees and charges to be levied shall not exceed
that being collected by the Government for similar services;chanroblesvirtualawlibrary
f. To fix, assess and collect charges and fees,
including rentals, for the lease, use or occupancy of lands, buildings,
structures, warehouses, all the facilities and services mentioned
herein and other properties owned and administered by the Estate; and
to fix and collect the fees and charges for the issuance of permits,
licenses and the rendering of services not enumerated herein, the
provisions of law to the contrary notwithstanding;chanroblesvirtualawlibrary
g. To sell, lease or otherwise dispose of, lands and
other properties owned or administered by the Authority for such use by
the Area enterprises, for such housing or commercial purposes within
the Areas and for such maximum industrial development of the Areas;chanroblesvirtualawlibrary
h. To levy, assess and collect a real property tax on
real properties within the Areas. The appraisal values and tax rates
shall be in accordance with the rules and regulations promulgated by
the Secretary of Finance for chartered cities. The Authority shall
retain three-fourths of the real property tax collected and the
remaining one-fourth shall be turned over to the local government or
governments, as the case may be, which, previous to the establishment
of the Areas were collecting a real property tax from real properties
within the area; Provided, that such share of the real property tax of
the local government or governments shall not be less than what they
were receiving prior to the establishment of the Areas; provided,
finally, that realty taxes accruing within the Areas at the time the
Authority has not taken over actual possession of a portion or portions
of the properties therein shall continue to be collected by the
respective local governments.
i. To grant such franchise for and to operate and
maintain within the Areas electric light, heat or power systems,
transportation, communication within, to and from the Areas,
warehousing, ice plant or cold storage;chanroblesvirtualawlibrary
j. To prescribe and enforce within the Areas rules
and regulations for pollution control;chanroblesvirtualawlibrary
k. For the due and effective exercise of the powers
conferred by law and to the extent requisite therefor, to exercise
exclusive jurisdiction and sole police authority over the Areas;chanroblesvirtualawlibrary
l. To promulgate such rules and regulations as may be
reasonable, necessary and desirable for the attainment of the
objectives of this Decree; such rules and regulations shall be binding
on the persons, proprietorships, partnerships and corporations residing
or located in the Areas;chanroblesvirtualawlibrary
m. To recommend the establishment of other Industrial
Areas as it may deem advisable, and to recommend the issuance of a
proclamation to fix and delimit the site of the Areas; chanroblesvirtualawlibrary
n. When essential to the proper administration of its
corporate affairs or when necessary for the proper transaction of its
business or for carrying out the purposes of this Decree, to contract
indebtedness and issue bonds;chanroblesvirtualawlibrary
o. To create and operate and/or contract to operate
such agencies, functional units, office and departments of the
Authority as it may deem necessary or useful for the furtherance of any
of the purposes of this Decree;chanroblesvirtualawlibrary
p. To adopt, alter and use a corporate seal which
shall be judicially notice, make contracts, lease, own or otherwise
dispose of personal and real property; sue and be sued, and otherwise
do and perform any and all acts and things that may be necessary or
proper to carry out the purposes of this Decree;chanroblesvirtualawlibrary
q. To perform all other functions enumerated in
Section 2 of Presidential Decree No. 243, as amended by Presidential
Decree No. 353. chanroblesvirtualawlibrary
Section 5. Capitalization. — The capital of the
Authority shall consist of (1) all such properties as may be
contributed to the Authority by the Government to form part of capital,
(2) all capitalized surplus, and (3) cash contribution by the
government in the amount of Two Hundred Million Pesos
(P200,000,000.00), which is hereby appropriated out of any fund in the
National Treasury not otherwise appropriated, be they collections from
all taxes accruing to the general funds or proceeds from loans, the
issue of bonds, treasury bills or notes or derived from any other
sources of income, by or of the National Government, which amount shall
be programmed and released by the Budget Commission in accordance with
the schedule of development and expenditures to be prepared and
submitted by the Authority.
Section 6. Exercise of Corporate Powers. — The
affairs and business of the Authority shall be directed and its
properties managed, controlled and preserved, unless otherwise provided
in this Decree, or in the exercise of the powers vested in the
Authority, by the Board of Directors of the Philippine Veterans
Investment Development Corporation, who may appoint an Estate
Administrator assisted by a staff, or a Board of Management, if it is
so desired, who shall be chosen from veterans of good standing with
formal business training and/or experience in law, or commerce, or
finance, or management on recommendation of the President of said
corporation. Insofar as the Authority is concerned, the Board of
Directors of the Philippine Veterans Investment Corporation is hereby
empowered to exercise governmental and proprietary functions in the
administration and operation of the Authority in all the areas so
proclaimed, any provision of law to the contrary notwithstanding.
Section 7. Power to Issue Bonds or Incur
Indebtedness. — The Authority shall have the authority to contract
loans, credits and other indebtedness, or to issue bonds, notes,
debentures, securities and other instruments of indebtedness for the
development and/or operation of the Areas. chanroblesvirtualawlibrary
The bonds and other instruments of indebtedness which the Authority is
authorized to issue under this Section and any income derived therefrom
shall be exempt from the payment of all taxes imposed by the Republic
of the Philippines, its agencies, instrumentalities or political
subdivisions, which fact may be expressed on the face thereof, and
shall be eligible as collateral in any transaction with the national or
any local government, its agencies and instrumentalities, including
government-owned or controlled corporations and government banking and
financial institutions, in which collateral is required. Any or all
loans or instruments of indebtedness which the Authority is authorized
to contract or issue under this Section shall be unconditionally
guaranteed both as to principal and interest by the Government of the
Republic of the Philippines whenever the President of the Philippines,
by himself or through his duly authorized representative, may deem such
guarantee by the Government of the Republic of the Philippines to be
advisable and necessary, in which case, the President of the
Philippines or his duly authorized representative is hereby authorized
to execute and deliver said guarantee of the Government of the Republic
of the Philippines.
The Central Bank of the Philippines or any of its authorized agent
banks shall extend to the Authority priority in the allocation of
foreign exchange and in the availment of the assistance and resources
of the Central Bank in a manner that shall facilitate the contracting
or issuance by the Authority of the loans or instruments of
indebtedness which the Authority is authorized to contract or issue
under this Section or the repayment thereof. In case, where the
Authority is required to surrender or sell to the Central Bank foreign
currencies qualified to form part of its international reserves, the
Authority is hereby given the right to repurchase any or all of said
foreign currencies out of any and all loans and instruments of
indebtedness payable in foreign currency contracted or issued by it
pursuant to this section at the same rate or rates at which said
foreign currencies were respectively sold to the latter, subject to the
payment of foreign exchange premium or fees as the Central Bank may
deem reasonable. chanroblesvirtualawlibrary
In the negotiation, contracting and issuance of any loan, credit and
evidence of indebtedness under this Section, the President of the
Philippines may, if deemed by him upon recommendation of the Authority
to be necessary or justified and when made a condition by the foreign
creditor to the issuance of such loans, credits, or instruments of
indebtedness, agree to waive the application of any law granting
preference or imposing restrictions on international competitive
bidding, such as, but not limited to, Commonwealth Act Numbered Five
Hundred Forty-one: Provided, however, that in every case where
competitive bidding is agreed upon in the purchase of machineries,
equipment, materials and supplies financed out of proceeds of such
loans, credits and instruments of indebtedness preference may be
granted in favor of such machineries, equipment, materials and supplies
produced, processed or manufactured in the Philippines at such rate and
in such manner as may be agreed upon from time to time with the entity
or institution providing financing for the project.
Section 8. Tax Treatment of Merchandise in the Areas.
— Raw materials, supplies, articles, equipment, machineries, spare
parts and wares of every description, except those prohibited by law,
brought in the Areas and utilized in the production, storing, packing
and shipment of goods meant for foreign markets, shall not be subject
to customs duties and internal revenue taxes, and laws and regulations
relating thereto, nor to local tax ordinances, the provisions of law to
the contrary notwithstanding. chanroblesvirtualawlibrary
Determination of those commodities, or the portion thereof, to be
accorded these privileges shall be vested in the Authority subject to
the approval of the Secretary of Finance. For this purpose, the
Secretary of Finance is hereby empowered to rule on the provision of
tax exemption of merchandise imported into the Areas by enterprises
operating therein.
Section 9. Tax Exemption of Enterprises Operating in
the Areas. — Aside from the tax privileges accorded those of the
enterprises operating in the Areas who are likewise registered with the
Board of Investments, all industries or firms operating in the Areas
shall be exempt from the payment of local taxes to the barrio,
municipality, city or province, as the case may be, where their
respective Areas are located. However, as stipulated in Section 4 (h),
a real property tax shall be collected by the Authority from each of
the enterprises operating within the Areas, one fourth of which shall
be turned over to the local governments concerned.
Section 10. Profit Character of the Authority;
Exemption from Taxes. — The Authority shall be operated for profit and
fifty (50) percent of such profit shall be turned over to the
Philippine Veterans Investment Development Corporation and the
remaining balance shall be plowed back for operation, maintenance and
administration of the Industrial Areas and the Authority, to pay its
indebtedness and obligations, in furtherance and effective
implementation of the policy enunciated in Section 1 of this Decree. In
consonance therewith, the Authority is hereby declared exempt from all
internal revenue taxes as well as tariff and customs duties on imports
of capital goods required for its operations, as well as all wharfage
dues and such other customs fees, charges and dues, of whatever nature
and kind, in the conduct and exercise of its powers, functions and
operations. chanroblesvirtualawlibrary
The foregoing exemptions may however be entirely or partially lifted by
the President of the Philippines upon recommendation of the Secretary
of Finance if the President shall find the Authority to be
self-sustaining and financially capable by them to pay such taxes,
customs duties, fees and other charges, after providing for debt
service requirements of the Authority and its projected capital and
operating expenditures.
Section 11. Road Networks in the Areas. — The road
networks within the Areas are hereby declared to be exclusive property
of the Authority. However, as part of the governmental function of the
Authority, they shall get priority in the allocation of monies coming
from the highway special fund to be used in the construction, repair or
maintenance of such roads, therein, the provisions of law, executive
orders, rules and regulations to the contrary notwithstanding. chanroblesvirtualawlibrary
Section 12. Eminent Domain. — For the acquisition of
rights of way, or of any property for the establishment or expansion of
the PHIVIDEC Industrial Areas, or for housing projects for the
employees working in such Areas, or properties for the establishment
and construction of residential and commercial areas as may be
necessary for the proper attainment of the objectives of this Decree or
for the protection of watershed areas, or properties for the
construction of dams, reservoirs, wharves, piers, docks, quays,
warehouses and other terminal facilities, structures and approaches
thereto, or for the acquisition of any properties for use by the
Authority in the necessary course of its affairs, business and the
exercise of its powers herein, the Authority shall have the right and
power to acquire the same by purchase, by negotiation or by
expropriation proceedings. For the maximum industrial development of
the Areas, the properties so acquired or expropriated may thereafter be
re-sold or leased by the Authority to Area enterprises under such terms
and conditions it may impose. Should the Authority elect to exercise
the right of eminent domain, expropriation proceedings shall be
maintained by and in the name of the Authority and it may proceed in
the manner provided for by law.
Section 13. Miscellaneous. — Without prejudice to the
provisions of this Decree, nothing herein provided shall divest or
deprive courts of justice, civil or military, of their jurisdiction, in
the proper cases, over civil or criminal suits or actions arising from
acts or omissions within the Areas.
All heads of Departments, Agencies, Offices and instrumentalities of
the National Government as well as political subdivision are hereby
enjoined to extend full cooperation and assistance to the Authority in
the exercise of its powers and duties and for the maximum
accomplishment of the policy declared herein.
Section 14. Repealing Clause. — The provisions of all
laws, decrees, instructions, executive orders, proclamations,
administrative orders, rules and regulations or parts thereof which are
inconsistent with the provisions of this Decree are either repealed or
modified accordingly. chanroblesvirtualawlibrary
Section 15. Separability Clause. — The provisions of
this Decree are hereby declared to be separable; and in the event any
one or more of such provisions are held unconstitutional, the validity
of other provisions shall not be affected.
Section 16. Effectivity. — This Decree shall take
effect upon its approval. chanroblesvirtualawlibrary
Done in the City of Manila,
this 13th day of August, in the year of Our Lord, nineteen hundred and
seventy-four.
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