Creating The Philippine National Lines, Defining Its Powers And Functions, Appropriating Funds Therefor And For Other Purposes
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Creating The Philippine National Lines, Defining Its Powers And Functions, Appropriating Funds Therefor And For Other Purposes
Presidential Decree No. 900
March 4, 1976
Case Overview and Summary
Summary of Presidential Decree No. 900Creation of the Philippine National Lines (PNL):
- PNL is a body corporate and politic created by the decree. (Section 1)
- It has a 50-year term from the date of approval of the decree. (Section 1)
- Its principal office location will be determined by the Board of Directors. (Section 1)
Purpose and Powers of the PNL:
- To establish reliable shipping services, including:
- Ownership, lease, charter, management, and operation of merchant vessels for cargo or passengers, domestically or internationally, on scheduled, non-scheduled, or charter basis. (Section 2a)
- Ship brokerage and related or supportive activities. (Section 2b)
- Ownership, establishment, management, and operation of shipbuilding and ship repair facilities. (Section 2c)
- Powers include:
- Prescribe and amend by-laws. (Section 3a)
- Use a seal. (Section 3b)
- Sue and be sued in court. (Section 3c)
- Carry on any lawful business related to its purpose. (Section 3d)
- Enter into contracts. (Section 3e)
- Have offices in and outside the Philippines. (Section 3f)
- Acquire, hold, mortgage, and alienate personal and real property. (Section 3g)
- Purchase, hold, and dispose of shares and securities of other corporations. (Section 3h)
- Borrow funds from any source. (Section 3i)
- Invest in and establish subsidiaries. (Section 3j)
- Exercise necessary powers to accomplish its purpose. (Section 3k)
Capital Stock and Appropriation:
- PNL has a capital stock of 5 million no-par shares. (Section 4)
- 2 million shares subscribed and paid for by the Philippine government at P40 per share, with P80 million appropriated from the General Fund. (Section 4a)
- 1 million shares subscribed and paid for by the National Development Company at an issue value determined by the PNL Board. (Section 4b)
- Remaining 2 million shares may be subscribed by the Philippine government, its financial institutions, government-owned or controlled corporations, or the private sector up to 25%, subject to the President's approval and at issue values determined by the PNL Board. (Section 4c)
- 25% of the value of shares subscribed under Sections 4b and 4c must be paid at subscription, with the balance subject to call by the Board. (Section 4d)
- Voting power for government-subscribed shares vests in the President or designees. (Section 4e)
- Voting power for National Development Company shares vests in the Board Chairman. (Section 4f)
- Voting power for other shares vests in the respective Chairmen or chief executives. (Section 4g)
- Each share represents one vote. (Section 4h)
- Share transfers must first be offered to the Philippine government to maintain its majority control. (Section 4h)
- Additional funds are appropriated for share reissues, government subscriptions, and subsidiary subscriptions. (Section 5)
Board of Directors:
- PNL is governed by a 9-member Board of Directors serving 3-year terms, with per diem of P250 per session. (Section 6)
- First members and Chairman are appointed by the President for a 1-year term. (Section 6)
- Subsequent members are elected annually by stockholders on the first Tuesday of March. (Section 6)
- Directors must be natural-born Filipino citizens, at least 35 years old, with integrity and expertise in shipping, finance, economics, law, business management, public utility, or government administration. (Section 6)
Functions and Duties of the Board of Directors:
- Prescribe and amend PNL by-laws. (Section 7a)
- Appoint and fix salaries of executive officers and employees, with power to delegate appointments to management. (Section 7b)
- Act as initial incorporators of any PNL subsidiary. (Section 7c)
- Establish necessary divisions and departments. (Section 7d)
- Constitute standing committees. (Section 7e)
- Submit an annual report to the President and publish it by March 1 each year. (Section 7f)
- Perform other necessary functions to accomplish PNL's purpose and exercise its powers. (Section 7g)
Auditor:
- The Commissioner on Audit appoints an Auditor for PNL, subject to Board approval, and necessary staff with Board-approved salaries. (Section 8)
- Auditors of PNL-owned or controlled corporations are appointed by their respective Boards. (Section 8)
Foreign Loans:
- PNL, through its President or authorized representative and with Board approval, can contract foreign loans, credits, and indebtedness from foreign governments or international financial institutions to accomplish its purpose. (Section 9)
- The President of the Philippines or authorized representative can negotiate and contract such loans on behalf of PNL. (Section 9)
- The President of the Philippines or authorized representative can guarantee such loans absolutely and unconditionally on behalf of the Republic of the Philippines. (Section 9)
Transfer to Private Sector:
- The Board of Directors may, with the President's approval, transfer ownership and/or operation of PNL and its subsidiaries to the private sector if PNL poses undue competition to private shipping companies. (Section 10)
Transitory Provisions:
- The Board Chairman must call an organizational meeting within 30 days of appointment to commence business. (Section 11)
- Pending appointment of PNL officers and personnel, the Board will be assisted by a technical staff designated by the Maritime Administrator from MARINA and other government agencies. (Section 11)
- P1,000,000 is appropriated from the initial government fund for initial operating costs. (Section 11)
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Executive Issuances
Presidential Decrees
Philippine National Lines
shipping
maritime
government corporation
board of directors
capital stock
appropriation
foreign loans
private sector transfer
Law
Creating The Philippine National Lines, Defining Its Powers And Functions, Appropriating Funds Therefor And For Other Purposes
Presidential Decree No. 900
•March 4, 1976
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 900 March 4, 1976
CREATING THE PHILIPPINE NATIONAL LINES, DEFINING ITS POWERS AND FUNCTIONS, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES
WHEREAS, it is the policy of the government to dispose of its shares in the Philippine National Lines, to the private sector at a propitious time;
WHEREAS, the government, cognizant of the vital role that shipping plays in the economic growth of the country, has given various incentives to Philippine shipping companies for the accelerated expansion and modernization of their fleet;
WHEREAS, despite these incentives given to the industry, private shipping companies have failed to expand and modernize their fleet due to the heavy capital requirement involved;
WHEREAS, statistics show that in 1974, the Philippine overseas fleet carried only a measly 7.8% of the country's foreign trade which accounted for a drain of some 600 million dollars representing freight payments to foreign flag carriers;
WHEREAS, the situation is expected to get worse in the years to come unless the government will take an active part...
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