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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Creating the National Fertilizer Corporation of the Philippines (Fertiphil), Defining Its Powers and Functions, Providing Funds Therefor and for Other Purposes
Presidential Decree No. 992
September 2, 1976
Case Overview and Summary
Summary of Presidential Decree No. 992Creation and Purpose:
- Creates the National Fertilizer Corporation of the Philippines (FERTIPHIL) as a body corporate to ensure adequate and stable supply of fertilizers and agricultural chemicals at reasonable prices. (Sections 1-2, 4)
- Primary purpose is to manufacture, store, distribute, transport, purchase, sell, import and export fertilizers and agricultural chemicals. (Section 4)
Capitalization and Ownership:
- Authorized capital stock of 1.12 billion pesos divided into 1.12 million shares with par value of 1,000 pesos each. (Section 3)
- Republic of the Philippines to subscribe at least 60% of voting shares, with foreign nationals limited to 30% of voting shares. (Section 3)
- Shares may be divided into classes with different rights and privileges as determined by the Board of Directors. (Section 3)
Powers and Functions:
- Manufacture, store, distribute, transport, purchase, sell, import and export fertilizers, agricultural chemicals, raw materials, by-products and derivatives. (Section 5a)
- Purchase, own, lease and dispose of property necessary for operations. (Section 5b)
- Enter into contracts, with or without public bidding, for fertilizer operations including acquisition of equipment, products, raw materials and services. (Section 5c)
- Borrow funds, obtain financing, provide guarantees and create liens or encumbrances as security. (Section 5d)
- Engage in export and import of fertilizers, agricultural chemicals and related products. (Section 5e)
- Build, own, lease and operate transportation modes for fertilizers and agricultural chemicals. (Section 5f)
- Organize joint ventures and collaborate with domestic or foreign entities in related fields. (Section 5g)
- Provide technical, advisory, consultancy and management services. (Section 5h)
- Undertake studies to expand Philippine fertilizer and agricultural chemical production. (Section 5i)
- Acquire patents, licenses, trademarks and other intellectual property rights. (Section 5j)
- Use and license intellectual property rights and enter into related agreements. (Section 5k)
- Establish communication systems without separate franchise. (Section 5l)
- Exercise right of eminent domain. (Section 5m)
- Enter private lands for studies or exploitation of raw material sources. (Section 5n)
- Acquire rights over mineral lands in excess of statutory limits for private entities. (Section 5o)
- Invest in bonds, debentures, shares and other securities. (Section 5p)
- Invest funds and organize subsidiaries. (Section 5q)
- Pay for property, rights or services in cash, shares or other securities. (Section 5r)
- Determine organizational structure, number of officers and employees, and their compensation. (Section 5s)
- Adopt, amend and repeal by-laws, rules and regulations. (Section 5t)
- Receive grants, subsidies, donations or contributions. (Section 5u)
- Adopt and use a corporate seal. (Section 5v)
- Sue and be sued. (Section 5w)
- Exercise other powers necessary to carry out provisions of the Decree. (Section 5x)
Governance:
- Board of Directors composed of 9 members including Secretaries of Finance, Agriculture and Industry, PNOC Chairman, Corporation President, and 4 elected by stockholders. (Section 6)
- Chairman appointed by the President of the Philippines from among Board members. (Section 7)
- President of the Corporation appointed by the President of the Philippines as chief executive. (Section 8)
- Corporation to have its own legal department with chief legal counsel appointed by the Board. (Section 9)
- Auditor appointed by Commission on Audit, subject to Board approval. (Section 10)
- Board to appoint officers and employees, fix compensation and benefits, and establish merit system. (Section 11)
Financial Provisions:
- Government financial institutions empowered to guarantee the Corporation's transactions and obligations. (Section 12)
- Corporation entitled to incentives and privileges granted to private enterprises in fertilizer and agricultural chemical industries. (Section 13)
- Corporation and affiliates authorized to contract foreign loans and the Philippine government may guarantee such loans. (Section 14)
- Corporation may issue bonds, subject to approval by the President of the Philippines, which are tax-exempt and guaranteed by the government. (Section 15)
- Initial appropriation of 2.225 million pesos transferred from Fertilizer Industry Authority. (Section 16)
Other Provisions:
- Corporation to operate as an independent corporation under the President of the Philippines. (Section 18)
- Securities and shares of the Corporation and affiliates exempt from registration and licensing requirements. (Section 19)
- Separability clause for unconstitutional provisions. (Section 20)
- Repealing clause for inconsistent laws, orders or decrees. (Section 21)
- Immediate effectivity of the Decree. (Section 22)
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Creating the National Fertilizer Corporation of the Philippines (Fertiphil), Defining Its Powers and Functions, Providing Funds Therefor and for Other Purposes
Presidential Decree No. 992
•September 2, 1976
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 992 September 2, 1976
CREATING THE NATIONAL FERTILIZER CORPORATION OF THE PHILIPPINES (FERTIPHIL), DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES
WHEREAS, fertilizer is a key input to food production and the Philippines imports about 70% of its fertilizer requirements annually;
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;
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;
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;
WHEREAS, the proposed corporation, while continually striving to remain economically viable and profitable, should not lose sight of its primary...
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