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PRESIDENTIAL DECREE NO. 992
PRESIDENTIAL DECREE NO. 992 -
CREATING THE NATIONAL FERTILIZER CORPORATION OF THE PHILIPPINES
(FERTIPHIL), DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS
THEREFOR AND FOR OTHER PURPOSES
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WHEREAS,
fertilizer is a key input to food production and the Philippines
imports about 70% of its fertilizer requirements annually;chanroblesvirtualawlibrary
WHEREAS, it is essential to the national interest that we immediately
expand Philippine fertilizer production capabilities in order to
guarantee sufficient domestic production of this vital commodity;chanroblesvirtualawlibrary
WHEREAS, the development of our fertilizer industry can be effectively
achieved through a strategy involving not only for the expansion of
local production capabilities but also the establishment of joint
ventures with other countries which have the raw material resources
required for fertilizer production;chanroblesvirtualawlibrary
WHEREAS, undertakings of this nature involve massive investments
exceeding the capabilities of the private business sector alone to
finance, thus necessitating the establishment of a largely or wholly
government-owned corporation;chanroblesvirtualawlibrary
WHEREAS, the proposed corporation, while continually striving to remain
economically viable and profitable, should not lose sight of its
primary role of providing farmers with vital inputs at reasonable
prices to enable them to produce enough for the nation;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree, as part of the law of the land, the following:cralaw:red
Section 1. Title of Decree. — This Decree shall be
known and cited as the "Charter of the National Fertilizer Corporation
of the Philippines (FERTIPHIL)."
Section 2. Creation, Name, Domicile and Term. —
There is hereby created a body corporate to be known as the National
Fertilizer Corporation of the Philippines (FERTIPHIL), hereinafter
referred to as the "Corporation," which shall primarily undertake and
transact the corporate business relative to organic and inorganic
fertilizers, agricultural chemicals and their by products and
derivatives, and for that purpose, the Corporation shall have
capacity to sue and be sued.
The principal office of the Corporation shall be determined by its
Board of Directors. It may establish such offices, agencies,
subsidiaries branches of correspondents, within or outside the
Philippines, as the exigencies of its business operations may require.
The term of existence of the Corporation shall be fifty (50) years,
which shall be deemed renewed for a similar period, unless sooner
dissolved by law.
Section 3. Capitalization. — The Corporation shall
have an authorized capital stock of One Billion One Hundred Twenty
Million Pesos (P1,120,000,000.00) divided into One Million One Hundred
Twenty Thousand (1,120,000) shares of capital stock with a par value of
One Thousand Pesos (P1,000.00) each. The entire amount of such capital
stock shall be open to subscription by the Republic of the Philippines
but the Board of Directors, with the approval of the President of the
Philippines may offer up to forty per centum (40%) of such authorized
capital stock for subscription and payment by others, including
domestic or foreign private or governmental institutions, corporations,
associations or other entities; Provided, That the holding of the
Republic of the Philippines in voting shares of stock shall in no event
be less than sixty per centum (60%) of the voting shares of stock at
any time outstanding; and, Provided, further, that the holdings of
non-Philippine nationals in such voting shares shall in no event go
beyond thirty per centum (30%) of the voting shares at any time
outstanding.
Payment for the shares subscribed by the Republic of the Philippines
shall be made from the General Fund as and when the same are needed for
the operations of the Corporation, as determined by the Board of
Directors of the Corporation with the approval of the President of the
Philippines.
Within the limits of the authorized capital stock hereinabove stated,
the shares of stock of the Corporation may be divided into such classes
with such rights, voting powers, preferences and restrictions as may be
determined by the Board of Directors. Until such time as the Board of
Directors exercises the foregoing power, all the shares of capital
stock of the Corporation shall be common shares with the same rights
and privileges.
The voting power of all the shares of stock owned and controlled by the
Republic of the Philippines shall be vested in the President of the
Republic of the Philippines or in such person or persons as he may from
time to time designate.
Section 4. Purpose. — The primary purpose of the
Corporation is to ensure that there is an adequate and stable supply of
fertilizer and agricultural chemicals at reasonable prices and for that
purpose, it may engage in the manufacture, storage, distribution,
transportation, purchase, sale importation and exportation of
fertilizers and agricultural chemicals of all kinds.
Section 5. Powers and Functions of the Corporation. —
The Corporation shall have the following powers and functions:cralaw:red
a. To manufacture, store, distribute, transport,
purchase, or sell all types of fertilizers and agricultural chemicals,
their raw materials, by- products and derivatives;chanroblesvirtualawlibrary
b. To purchase, own, hold, lease and dispose of all
types of property, real, personal or mixed, essential for carrying out
its functions;chanroblesvirtualawlibrary
c. To enter into all types of contracts, with or
without public bidding, with any person or entity, domestic or foreign,
and with governments for its fertilizer operations including the
acquisition by way of purchase, lease or rent or other deferred payment
arrangements of equipment, finished products and/or raw materials and
supplies, as well as for services connected therewith under such terms
and conditions as it may deem proper and reasonable;chanroblesvirtualawlibrary
d. To borrow, raise, or obtain funds to support or
carry out its objects and purpose and/or to arrange financing or
equipment credit or any kind of financial or material assistance from
private or governmental sources or from international public or private
lending institutions and to secure any or all of the same, to the
extent that may be required, by any lawful guaranty or
counter-guaranty, by pledge, mortgage, or deed of trust, or by creating
or suffering to exist a charge, lien, or encumbrance, and likewise by
similar guarantees, pledges, mortgages, liens and other security
arrangements to secure the performance by the Corporation or any
obligation or liability it may undertake for itself or for other
companies or enterprises in which it may be interested;chanroblesvirtualawlibrary
e. To engage in export and import of fertilizers and
agricultural chemicals, as well as their raw materials, by-products,
and derivatives;chanroblesvirtualawlibrary
f. To build, make, construct, maintain, purchase,
sell, charter, deal in and with, own, lease, pledge, and otherwise
dispose of all modes of transportation, together with all components,
tools, machinery and appliances appurtenant thereto, as are utilized in
the transport of fertilizers and agricultural chemicals, including
their raw materials, by-products and derivatives, whether such
transportation be byr, land or sea;chanroblesvirtualawlibrary
g. To promote, organize and re-organize whenever
warranted, and to collaborate and associate in joint venture with any
person, association, company or entity, whether domestic or foreign, in
the fields of fertilizer and agricultural chemical production,
marketing, procurement, shipping, financing and such other related
businesses;chanroblesvirtualawlibrary
h. To provide technical, advisory, consultancy and
management services in the field of fertilizer and agricultural
chemical operations;chanroblesvirtualawlibrary
i. To undertake all the appropriate studies
necessary to expand Philippine fertilizer and agricultural
chemical production;chanroblesvirtualawlibrary
j. To apply for, register, purchase or otherwise
acquire, or obtain a lien on or interest in any patent rights,
licenses, designs, processes, trademarks, tradenames, distinctive
marks, inventions and improvements thereof, and concessions which may
appear likely to be advantageous or useful to the Corporation;chanroblesvirtualawlibrary
k. To use, exercise, or otherwise turn to account
said property rights, and to enter into patent licensing, technical
assistance, or other know-how and data or process feedback agreements,
including the use of computers, as the case may be related to or
necessary or appropriate to carry out the objectives and purposes of
the Corporation; chanroblesvirtualawlibrary
l. Subject to existing regulations, and if deemed
necessary, to establish and maintain such communication system, whether
by radio, telegraph or any other manner, without the need of a separate
franchise therefor;chanroblesvirtualawlibrary
m. To exercise the right of eminent domain, in order
to attain the purposes for which the Corporation is created;chanroblesvirtualawlibrary
n. Subject to payment of the proper amount, to enter
private lands for the purpose of conducting studies or exploitation of
potential sources of raw materials for fertilizers and agricultural
chemicals;chanroblesvirtualawlibrary
o. To hold lands and acquire rights over mineral
lands in excess of the areas permitted to private corporations,
associations and persons by statute;chanroblesvirtualawlibrary
p. To acquire by purchase, subscriptions, exchange,
assignments, gift or otherwise, and to sell, assign, transfer,
exchange, mortgage, pledge, and deal in and with, and otherwise, to
enjoy and dispose of, any bonds, debentures, promissory notes, shares
of capital stock and/or other securities and/or obligations created,
negotiated or issued by any corporation, association, or other entity,
foreign or domestic, and while the owner thereof, to exercise all the
rights, power and privileges of ownership, including the right to
receive, collect and dispose of; any and all dividends, interest and
income derived therefrom and the right to vote on any shares of the
capital stock, and upon any bonds, debentures and/or other securities,
having voting power so owned;chanroblesvirtualawlibrary
q. To invest and deal with the funds of the
Corporation in such manner as may be deemed proper including the
organization and incorporation of subsidiaries, in order not to make
such funds idle and unproductive and to achieve their full utilization
for the principal objects and purposes for which the Corporation has
been organized;chanroblesvirtualawlibrary
r. To pay for any property or rights or services
obtained by the Corporation either in cash, shares, or other securities
of the Corporation, or partly in cash and partly in shares or other
securities, under such terms and conditions as its Board of Directors
shall determine to be reasonable;chanroblesvirtualawlibrary
s. To determine its organizational structure,
including the number and salaries of its officers and employees;chanroblesvirtualawlibrary
t. To adopt, amend and repeal its Code of By- Laws,
rules and regulations governing the manner in which the general
business of the Corporation may be exercised, including provisions for
the formation of such committee or committees as the Board may deem
necessary to facilitate its business; chanroblesvirtualawlibrary
u. To receive any grant, subsidy, donation or
contribution from any entity, whether private or governmental, private
or public;chanroblesvirtualawlibrary
v. To adopt, alter and use a corporate seal which
shall be judicially noticed;chanroblesvirtualawlibrary
w. To sue and be sued; and
x. Generally, to do and perform any and all acts,
and to exercise any and all powers as may be necessary to carry into
effect the provisions of this Decree, or as may be essential to the
proper conduct of its operations, or as may be conducive to the
attainment of its corporate purposes and objectives.
Section 6. Board of Directors. — The powers and
functions of the Corporation shall be vested in and exercised by a
Board of Directors, hereinafter referred to as the "Board," which shall
be composed of nine (9) members, to wit:cralaw:red
a) Secretary of Finance
b) Secretary of Agriculture
c) Secretary of Industry
d) Chairman of the Board of the Philippine
National Oil Company
e) President of the Corporation
f) Four (4) other members to be elected by the
stockholders at the annual meeting of stockholders.
Section 7. Chairman. — The Chairman of the Board, who
shall be appointed by the President of the Philippines from among the
members of the Board, shall have such powers and perform such duties as
may be provided in the By-Laws or as may be vested in him by the Board.
He shall preside at all meetings of the Board and in his absence, any
Director chosen by the majority of the Directors present shall preside
at such meetings.
Section 8. President of the Corporation. — The
President of the Corporation, who shall likewise be appointed by the
President of the Philippines, shall be the chief executive of the
Corporation, and shall have the following powers and functions:cralaw:red
a. Prepare the agenda for the meetings of the Board
and to submit for the consideration of the Board the policies and
measures which he believes to be necessary to carry out the purposes
and provisions of this Decree;chanroblesvirtualawlibrary
b. To execute and administer the policies and
measures approved by the Board;chanroblesvirtualawlibrary
c. To direct and supervise the operations and
internal administration of the Corporation; and
d. To perform such duties and exercise such other
powers as may be provided in the By-Laws or as may be vested in him by
the Board.
Section 9. Legal Counsel. — Any provision of existing
laws to the contrary notwithstanding, the Corporation shall have its
own legal department, the chief legal counsel and members of which
shall be appointed by the Board of Directors.
Section 10. Auditor. — Any provision of law to the
contrary notwithstanding, 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 approved by the Board.
The auditors of corporations owned or controlled by the Corporation who
shall be reputable accounting and auditing firms shall be appointed by
their respective boards of directors.
Section 11. Appointment, Control and Discipline of
Personnel. — Any provision of law to the contrary notwithstanding, the
"Board," upon recommendation of the President of the Corporation, shall
appoint the officers and employees of the Corporation and its
subsidiaries; fix their compensation, allowances and benefits, their
working hours and such other conditions of employment as it may deem
proper; grant them leaves of absence under such regulations as it may
promulgate, discipline and/or remove them for cause; and establish and
maintain a recruitment and merit system for the Corporation and its
affiliates and subsidiaries.
Section 12. Government Financial Institutions
Guarantees. — The provision of any law to the contrary notwithstanding,
and financial institution owned or controlled by the Government of the
Republic of the Philippines with the exception of the Central Bank of
the Philippines, Government Service Insurance System and the Social
Security System, is hereby empowered to guarantee acceptance credits,
loans, transactions, undertakings, or obligations of any kind which may
be incurred by the Corporation, whether directly or indirectly in favor
of any person, association or entity, whether domestic or foreign.
Section 13. Privileges and Incentives. — The
Corporation shall be entitled to all the incentives and privileges
granted by law to private enterprises engaged in the fertilizer,
agricultural chemical and related industries.
Section 14. Foreign Loans. — The Corporation as well
as any affiliate corporation in which it holds, owns and/or controls by
itself or jointly with one or more government-owned or controlled
corporations at least seventy-five percent (75%) of the issued and
outstanding shares of stock entitled to vote, is hereby authorized to
contract loans, credits and indebtedness in any convertible foreign
currency or in capital goods from foreign governments, or any
international financing institutions or fund sources, or any other
entities, 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 Republic of the Philippines, through the President of the
Philippines or his duly authorized representative, may guarantee,
absolutely and unconditionally, as primary obligor and not as surety
merely, the payment of any such loan, credit and indebtedness, secured
by the Corporation or any of its affiliate companies as provided above,
which may 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 pursuant to
agreements entered into with foreign governments or any international
financial institutions or fund source.
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 Company or any of its affiliate corporations as
defined therein, paid from the Act, shall also be exempt from all 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 15. Issuance of Bonds. — In addition to any
other power herein granted to the Corporation, whenever the Board deems
it necessary for the Corporation to issue bonds, whether denominated in
Philippine currency or any convertible foreign currency, it may do so
by resolution which shall declare and state the purpose for which the
proposed bond issue is to be incurred. In order that any such bond
issue may be valid, however, it shall be approved by the President of
the Philippines, upon the recommendation of the Secretary of Finance.
The Secretary of Finance, in consultation with the Monetary Board of
the Central Bank of the Philippines shall prescribe the form, the rates
of interest, the denomination, maturities, negotiability,
convertibility, call and redemption features, and all other terms and
conditions of issuance, placement, sale, servicing, redemption, and
payment of all bonds issued under the authority of this Decree.
The bonds so issued shall be exempt from the payment of all taxes
imposed by the Republic of the Philippines, or by any authority,
branch, division or political subdivision thereon, which fact shall be
stated upon their faces; and by virtue of this Decree are hereby made
securities in all public offices, political subdivisions, commercial
banks, insurance companies, savings banks and savings institutions,
including savings and loan associations; executors, administrators,
guardians, trustees and fiduciaries in the Philippines may properly and
legally invest in such bonds their own funds within their control, and
the same shall be receivable as collateral in any transaction with the
government, its agencies and instrumentalities, including
government-owned or controlled corporations and government banking and
financial institutions in which such collateral is required.
The Republic of the Philippines hereby guarantees the payment of the
Corporation of both the principal and the interest on the bonds, and
shall pay such principal and interest in case the Corporation fails to
do so, and there are hereby appropriated out of the General Fund, in
the National Treasury not otherwise appropriated the sums necessary to
make the payments so guaranteed.
Investment by banking institutions in such bonds shall be deemed
investment in
agricultural credit, in compliance with the provisions of Presidential
Decree No. 717, and its implementing rules and regulations.
Section 16. Initial Appropriations. — The sum of Two
Million Two Hundred Twenty-Five Thousand Pesos (P2,225,000.00) is
hereby transferred from the Fertilizer Industry Authority to the
Corporation. Said sum shall form part of the capital contribution of
the Republic of the Philippines to the Corporation.
Section 17. Reports. — The Corporation shall, within
three months after the end of each fiscal year, submit its annual
report to the President of the Philippines. It shall likewise submit
such periodic or other reports as may be required of it from time to
time.
Section 18. Corporation Directly Under the President
of the Philippines. — Any provision of law to the contrary
notwithstanding, the Corporation shall operate as an independent
Corporation, subject only to the authority of the President of the
Philippines.
Section 19. Exemption of Securities from Licensing
Requirements. — The securities and/or shares of stock of the
Corporation and those issued by its affiliate companies where it has a
controlling interest of at least fifty-one percent (51%) of the issued
and outstanding capital stock, as well as the sale of and/or
subscription to such securities and/or shares of stock shall be exempt
from registration, licensing or other requirements imposed under the
Securities Act (C.A. No. 83 as amended) any other law, decree, order or
regulation.
Section 20. Separability Clause. — In the event that
any provision of this Decree or the application of any such provision
to any person or circumstance is declared to be unconstitutional, the
remainder of this Decree or the application of said provision to other
persons or circumstances shall not be affected thereby.
Section 21. Repealing Clause. — All laws, executive
orders, administrative orders, proclamations or decrees or parts
thereof inconsistent with any of the provisions of this Decree are
hereby repealed or modified accordingly.
Section 22. Effectivity. — This Decree shall take
effect immediately.
Done in the City of Manila,
this 2nd day of September, in the year of Our Lord, nineteen hundred
and seventy-six.
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