Amending The Charter Of The Philippine Aerospace Development Corporation, Presidential Decree No. 286, DatedSeptember 5, 1973, And For Other Purposes

Case Overview and Summary

This Presidential Decree amends the charter of the Philippine Aerospace Development Corporation (PADC) as follows:

Purpose of the Corporation (Section 1):
- Undertake activities and projects for establishing an aviation and aerospace industry, including assembly, manufacture, research, and innovation of aircraft and related equipment. [1]
- Engage in maintenance, repair, overhaul, and modification of aerospace and associated equipment to provide technical services to the Philippine Air Force, airlines, and the aviation industry. [2]

Powers of the Corporation (Section 2):
- Invest, own, or participate in equity in establishments engaged in the aerospace industry. [7]
- Form, organize, establish, and maintain subsidiaries, with at least one director from the PADC Board of Directors. [7]

Capital Stock (Section 3):
- Total capital stock of 3 million no-par shares.
- 2 million shares subscribed and paid for by the Philippine government, using ₱10,000,000 from the General Fund. [3(a)]
- 500,000 shares each subscribed and paid for by the Development Bank of the Philippines and the Government Service Insurance System at values determined by the PADC Board of Directors. [3(b)]
- Voting rights vested in the President of the Philippines or designee for government shares, and in the respective heads of DBP and GSIS for their shares. [3]
- Prohibits any agreement that impairs or removes the public corporate nature of the PADC. [3]

Board of Directors (Section 4):
- Composed of 5 ex-officio members (Executive Secretary, Secretaries of National Defense and Industry, Chairperson of DBP Board of Governors, and GSIS General Manager) and 2 appointees by the President for 2-year terms. [4]
- The President appoints the Chairperson from among the 7 directors. [4]

Functions and Duties of the Board of Directors (Section 5):
- Appoint and fix salaries of executive officers and other officials necessary for the PADC's purposes. [5(1)]

Foreign Loans (Section 8):
- PADC is authorized to contract loans, credits, or indebtedness from foreign governments, international financial institutions, or fund sources, up to $1 billion or equivalent, for its purposes. [8]
- The President of the Philippines or authorized representative can negotiate and contract such loans on behalf of the PADC. [8]
- The President can guarantee the payment of loans, credits, indebtedness, and bonds issued, as well as the performance of obligations undertaken by the PADC, up to the amount authorized under Republic Act No. 6142, as amended. [8]
- Exempts loans, credits, indebtedness, and importation of machinery, equipment, materials, supplies, and services paid from loan proceeds from all direct and indirect taxes, fees, imports, charges, and restrictions imposed by the Philippine government or its agencies and subdivisions. [8]