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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 741
PRESIDENTIAL DECREE NO. 741
- AMENDING CERTAIN SectionS OF REPUBLIC ACT NUMBERED FORTY-ONE HUNDRED
AND FIFTY-SIX, ENTITLED "AN ACT CREATING THE PHILIPPINE NATIONAL
RAILWAYS, PRESCRIBING ITS POWERS, FUNCTIONS, AND DUTIES AND PROVIDING
FOR THE NECESSARY FUNDS FOR THE OPERATIONS", AS AMENDED BY REPUBLIC ACT
NUMBERED SIXTY-THREE HUNDRED AND SIXTY-SIX
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chanroblesvirtualawlibrary
WHEREAS,
under Republic Act Numbered Forty-One Hundred and Fifty-Six as amended
by Republic Act Numbered Sixty-Three Hundred and Sixty-Six, it was
declared as a national policy that the Philippine National Railways,
being a factor for socio-economic development growth, shall (a) remain
in and under government ownership during its corporate existence; (b)
be administered with the view of serving the best interest of the
public; and (c) whileming at its greatest utility by the public, the
viability of its operation must be ensured so that the service can be
rendered at the minimum passenger and freight prices
possible; chanroblesvirtualawlibrary
WHEREAS, it has been declared a national policy to give autonomy to the
self-governing boards of government-owned or controlled corporations in
the management and operation of their respective corporations;chanroblesvirtualawlibrary
WHEREAS, since transportation plays a vital role in the prosecution of
the national effort for the social and economic development of the
country, there arises an immediate need for the early completion of the
rehabilitation and selective modernization of the facilities of the
Philippine National Railways as provided for in Republic Act Numbered
Sixty-Three Hundred and Sixty-Six;chanroblesvirtualawlibrary
WHEREAS, in view of the expanded role and participation of the
Philippine National Railways in the total economic and social
development of the country, and of its anticipated major role in the
organization and operation of a centralized and integrated transport
system in the country, it is imperative that the abandoned line
services be restored, existing line services be expanded and new lines
or services be created; chanroblesvirtualawlibrary
WHEREAS, in order to facilitate the realization of the aforementioned
declared policies and expeditiously attain the abovementioned
objectives, certain sections of Republic Act Numbered Forty-One Hundred
and Fifty-Six as amended by Republic Act Numbered Sixty-Three Hundred
and Sixty-Six should be amended.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
amend certain sections of the Charter of the Philippine National
Railways, Republic Act Numbered Forty-One Hundred and Fifty-Six as
amended by Republic Act Numbered Sixty-Three Hundred and Sixty-Six.
Section 1. Section 1 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 1. Name, Duration and Domicile. — A Corporation
to serve as the instrumentality of the Government of the Philippines in
providing a nationwide railroad and transportation system, is hereby
created to be known as the Philippine National Railways, which shall
exist for a term of fifty (50) years from the date of approval of this
Act. It shall have its main office in the City of Manila, and shall
have such branches and agencies within the Philippines as may be
necessary for the proper conduct of its business. This Corporation
shall be under the Office of the President.
Section 2. Section 2 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby further amended to read as
follows:cralaw:red
"Sec. 2. Purpose and Specific Powers. — The
Philippine National Railways shall have the following purposes and
specific powers:cralaw:red
(a) To acquire and hold the assets of the Manila
Railroad Company of the Philippine Islands, and to succeed to, or
acquire, maintain and operate such grants, concessions, and franchises
as are now held and enjoyed by the said Manila Railroad Company of the
Philippine Islands;chanroblesvirtualawlibrary
(b) To own or operate railroad trainways, bus lines,
trucklines, subways, and other kinds of land transportation, vessels,
and pipelines, for the purposes of transporting for consideration,
passengers, mail and property between any points in the Philippines;chanroblesvirtualawlibrary
(c) As an auxiliary to its main purpose, to own
and/or operate powerhouses, hotels, restaurants, terminals, warehouses,
timber concessions, coal mines, iron and other mining properties and to
manufacture rolling stocks, equipment, tools and other appliances; to
construct and operate in connection with its railroad lines, toll
viaducts, toll tunnels; and
(d) To borrow money and contract loans, credits and
indebtedness from domestic and/or foreign sources for the prosecution
and furtherance of its goals and objectives.
Section 3. Section 3 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three and Sixty-Six, is hereby amended to read as follows:cralaw:red
"Sec. 3. Authorized Capital Stock of the Philippine
National Railways. — The authorized capital stock of the Philippine
National Railways shall be One Billion, Five Hundred Million Pesos
divided into seven million, five hundred thousand common shares all
with par value at two hundred pesos each, which shall include the
present authorized capitalization of six hundred fifty million pesos of
the Philippine National Railways; Provided, That the increase in the
authorized capital shall be fully subscribed by the Government:
Provided, further, That the sum of five hundred thirty-four million,
nine hundred sixteen thousand, seven hundred nine pesos and eighty-five
centavos (P534,916,709.85) as of June 30, 1975, which has been already
subscribed and fully paid for by the Government of the Republic of the
Philippines shall be the initial paid-in capital of the authorized
capital of one billion, five hundred million pesos provided
herein. chanroblesvirtualawlibrary
The remaining unpaid subscription of the Government in the amount of
nine hundred sixty-five million, eighty-three thousand two hundred
ninety pesos and fifteen centavos (P965,083,290.15) shall be paid as
follows:cralaw:red
(a) The sum of twenty-nine million, one hundred
seventy-seven thousand, four hundred twenty-six pesos and forty-three
centavos (P29,177,426.43) representing the following obligations of the
Philippine National Railways to the Government shall be additional
paid-in subscription for one hundred forty-five thousand eighty-seven
(145,887) common shares of stock to be held by the National Government;chanroblesvirtualawlibrary
(1) Advances by the National
Treasury for payment of
P29,177,426.43
(2) Taxes due to the Bureau of
Customs covering importations
for the Rehabilitation and
Selective Modernization Program
11,341,484.00
(3) Guaranteed dividends of six
percent (6%) on preferred share
of the Government Service
Insurance System 5,260,800.00
(4) MRRCo. loans with PNR
included in the Government
rehabilitated accounts which
were liquidated by the National
Government 5,959,005.58
(5) Releases from the Calamity
Fund for the Repair of PNR
Lines and Bridges damaged by
typhoon 3,000,000.00
P29,177,426.43
(b) The sum of five million, six hundred eighty-nine
thousand, five hundred fifty-four pesos and twenty-eight centavos
(P5,689,554.28) representing the remaining unpaid account of the
Philippine National Railways to the Development Bank of the Philippines
shall likewise be additional paid-in subscription for twenty-eight
thousand four hundred forty-seven (28,447) common shares of stock to be
held by the Development Bank of the Philippines; chanroblesvirtualawlibrary
(c) The sum of two million, five hundred seventeen
thousand, seven hundred seventy-nine pesos and eighteen centavos
(P2,517.779.18) representing the remaining unpaid account of the
Philippine National Railways to the Philippine National Bank shall be
also additional paid-in subscription for twelve thousand, five hundred
eighty-eight (12,588) common shares of stock to be held by the
Philippine National Bank;chanroblesvirtualawlibrary
(d) The sum of forty million, five hundred thousand
pesos (P40,500,000.00), released to the Philippine National Railways
out of the appropriation under Presidential Decree Number Three for
national railway projects and the sum of thirteen million, eight
hundred ten thousand pesos (P13,810,000.00) released out of the
appropriation of two hundred sixty-nine million pesos (P269,000,000.00)
under Presidential Decree Number Four Seventy-Five for the
construction, installation, improvement, rehabilitation,
reconstruction, completion, including project preparation and purchase
of necessary material for various railways projects, or a total of
Fifty-four million, three hundred ten thousand pesos (P54,310,000.00)
representing two hundred seventy-one thousand, five hundred fifty
(271,550) common shares of stock, shall also form part of the paid-in
capital of the Philippine National Railways; and
(e) Whatever balance remaining of the authorized
capital of the Philippine National Railways shall be paid from a
continuing annual appropriation of not less than one hundred million
pesos which is hereby appropriated out of any funds in the National
Treasury not otherwise appropriated, such amount to be programmed and
released by the Budget Commission in accordance with the schedule of
cash requirements to be prepared and submitted by the Philippine
National Railways; Provided, That this continuing annual appropriation
of one hundred million pesos and the programming and release thereof
shall remain in force until the authorized capital stock subscribed by
the Government shall have been paid in full.
Section 4. A new section shall be inserted to be
known as Section 3-a of Republic Act Numbered Forty-One Hundred and
Fifty-Six, as amended by Republic Act Numbered Sixty-Three Hundred and
Sixty-Six, which provides as follows:cralaw:red
"Sec. 3-a. Foreign Loans. — The Corporation is hereby
authorized to contract loans, credits and indebtedness in any
convertible foreign currency, or capital goods, from foreign
governments, their agencies, instrumentalities or financial
institutions, or any non-governmental national or international
financial institutions or firms extending suppliers credit deferred
payment arrangements or other fund sources, or to issue bonds, the
total outstanding amount of which, exclusive of interests, shall not
exceed two hundred million United States 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. chanroblesvirtualawlibrary
The President of the Philippines, through the Secretary of Finance, is
hereby 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 and 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 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 exempted
from all charges and 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. Section 5 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 5. Board of Directors, Composition and
Appointment. — The corporate powers of the Corporation shall be vested
in and exercised by a Board of Directors, hereinafter referred to as
the "Board", composed of a Chairman to be appointed by the President;
the General Manager of the Corporation who shall be its Vice-Chairman;
the Deputy Executive Secretary; the Deputy Director-General (Programs
and Projects) of the National Economic and Development Authority; the
Undersecretary of Finance (Fiscal Affairs); Undersecretary of Public
Works, Transportation and Communications, and three other members to be
appointed by the President. chanroblesvirtualawlibrary
The appointive members of the Board who need not be stockholders of the
Corporation shall be persons of good moral character, competent and
experienced in one or more of the following fields: transport planning,
engineering, economics, management, finance, corporate law, or
marketing.
The Chairman and the three appointive members of the Board shall serve
for a period of six years; Provided, That in the initial appointments,
one member shall be appointed for a term of two years, one member for
four years, and two members for six years, Provided, further, That
their successors shall be appointed for a term of six years except that
any person appointed to fill a vacancy shall only serve for the
unexpired term of the member succeeded.
The officials next in rank to the ex-officio members of the Board, as
designated by them, shall serve as alternate members. They shall attend
the meetings of the Board whenever their principals are absent or the
said positions are vacant and shall receive the same benefits and
privileges as their principals.
* including the Chairman
For actual attendance of meetings, the members of the Board shall
receive a per diem of five hundred pesos each for every meeting.
Provided, That no member shall receive per diem exceeding one thousand
pesos a month; Provided further, That the total for travelling and
representation expenses for any one month shall not exceed one thousand
pesos for each regular member and two thousand pesos for the Chairman.
Section 6. Section 6 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 6. Powers and Duties of the Board of Directors.
— The Board shall have the following powers and duties:cralaw:red
a. To prescribe, amend, and repeal the by-laws,
rules, regulations and policies governing the manner in which the
general business of the Corporation may be exercised;chanroblesvirtualawlibrary
b. To fix the compensation of the General Manager
and Assistant General Managers subject to the approval of the Office of
the President, which shall not be less than sixty thousand pesos
(P60,000.00) per annum and forty-eight thousand pesos (P48,000.00) per
annum respectively;chanroblesvirtualawlibrary
c. To approve the budgets of the Corporation;chanroblesvirtualawlibrary
d. By a two-thirds vote of all members, to recommend
to the President suspension or removal for cause of the General Manager
and Assistant General Managers;chanroblesvirtualawlibrary
e. Upon recommendation of the General Manager, to
approve the appointments of all officials of the Corporation from the
rank of division heads and above;chanroblesvirtualawlibrary
f. Subject to the provisions of applicable laws and
regulations and upon recommendation of the General Manager, to
reorganize the Corporation, determine its staffing pattern and define
the functions and duties of organization units and personnel.
Section 7. Section 9 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 9. Managing Head. — The Management of the
Corporation shall be vested in the General Manager who shall be
appointed by the President of the Philippines. He shall possess
technical competence in management preferably in railroad transport
management, have demonstrated executive ability, and be of good moral
character. He shall hold office for a term of eight (8) years.
In the performance of his functions, he shall be assisted by
Assistant General Managers who shall be appointed by him with the
approval of the Board of Directors and the President.
Section 8. Section 10 of Republic Numbered Forty-One
Hundred and Fifty-Six as amended by Republic Act Numbered Sixty-Three
Hundred and Sixty-Six is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 10. Powers and Duties of the General Manager. —
The General Manager shall have the following powers and duties:cralaw:red
a. To recommend to the Board short-and-long range
plans and programs consistent with the overall objectives of the
Corporation;chanroblesvirtualawlibrary
b. To direct and manage the affairs and business of
the Corporation on behalf of the Board in accordance with the policies,
rules and regulations established by the Board;chanroblesvirtualawlibrary
c. To sit in all meetings of the Board as
Vice-Chairman and participate in its deliberations with the right to
vote and to preside in the meetings for and in the absence of the
Chairman;chanroblesvirtualawlibrary
d. To submit and recommend consolidated annual
budget and propose capital and other supplemental budgets to the Board;chanroblesvirtualawlibrary
e. To appoint officials and employees below the rank
of a division head and to suspend or otherwise discipline for cause,
all subordinate officials and employees of the Corporation: Provided,
however, That in the case of removal for cause, approval of the Board
shall be necessary;chanroblesvirtualawlibrary
f. To recommend to the Board such changes in the
organizational structure and staffing pattern of the Corporation as may
be necessary to carry out its functions effectively;chanroblesvirtualawlibrary
g. To submit to the Office of the President within
60 days after the close of said fiscal year an annual report and such
other reports on its operations as may be required; and
h. To perform such other duties and functions as may
be assigned to him by the Board.
Section 9. Notwithstanding the provisions of
Presidential Decree Nos. 14 and 69 and the provisions of other laws to
the contrary, the exemption from taxes, duties and port charges or
dues, customs bonds port charges formerly enjoyed by the Corporation as
provided for in Section 12 of Republic Act Numbered Sixty-Three Hundred
and Sixty-Six shall remain valid and effective.
Section 10. Section 14 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 14. Legal Department. — Any provisions of law
or executive order to the contrary notwithstanding, the Philippine
National Railways shall have its own Legal Department which shall
handle all legal matters affecting the corporation: Provided, That the
Solicitor General's office shall provide assistance and supervision in
the handling of court cases of the Corporation.
Section 11. Section 15 of Republic Act Numbered
Forty-One Hundred and Fifty-Six as amended by Republic Act Numbered
Sixty-Three Hundred and Sixty-Six is hereby amended to read as follows:cralaw:red
"Sec. 15. Exemption from the Public Service Act. —
The Philippine National Railways shall not be subject to the authority
and supervision of the Board of Transportation or any similar
regulatory Body.
Section 12. This Decree, is hereby made part of the
laws of the land and provisions of existing laws, executive and
administrative orders, or parts thereof, in conflict with this Decree
are hereby modified and repealed. chanroblesvirtualawlibrary
Section 13. This Decree shall take effect
immediately.
Done in the City Manila, this
3rd day of July, in the year of Our Lord, nineteen hundred and
seventy-five.
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