Creation of the National Development Fund

EXECUTIVE ORDER NO. 842 November 5, 1982

CREATION OF THE NATIONAL DEVELOPMENT FUND

WHEREAS, the National Development Company under Presidential Decree No. 1648 as an agency of the Government created to promote overall economic development through assistance to commercial, industrial, agricultural, mining or other ventures;

WHEREAS, in fulfilling this task, the National Development Company has participated in the development of several ventures which are or promise to be economically viable and will contribute to the economic growth of the country;

WHEREAS, it is the avowed policy of government to transfer to the private sector its investments in pioneering projects and business enterprise, once such investments have been viable;

WHEREAS, in order to allow small investors to share in the fruits of these ventures and to enable the National Development Company to generate additional funds to participate in, among others, economically viable projects of NDC;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order and instruct the following:

Sec. 1....

Login to see full content

Summary of Executive Order No. 842

Creation of the National Development Fund
- The National Development Company (NDC) is authorized to create the "National Development Fund" by pooling funds from investors. (Section 1)
- NDC will issue "National Development Fund Certificates" to investors as evidence of their investments. (Section 2)
- The NDF Certificates are not considered "deposit substitutes" or "financial intermediations" under the General Banking Act. (Section 2)

Management of the Fund
- NDC will manage the Fund as an agent of the investors and charge a management fee. (Section 3)
- NDC is authorized to formulate the specific features, guidelines, and operations of the Fund and NDF Certificates. (Section 3)
- A Board of Trustees representing the investors will oversee the Fund's operations. (Section 4)

Protection of Investment
- To safeguard investors' interests, NDC must purchase any investments of the Fund if the total net asset value falls below the total original acquisition cost. (Section 5)

Taxation
- The Fund will not be considered a "corporation" under the National Internal Revenue Code and will not be subject to income tax. (Section 6)
- Income earned by the Fund will be deemed the income of the investors, who will bear all taxes. (Section 6)
- If the Fund's income is subject to final taxes, those taxes will be deemed paid by the investors. (Section 6)

Auditing
- NDC will appoint an independent Certified Public Accountant as the auditor of the National Development Fund. (Section 7)

Separability Clause and Effectivity
- If any provision is held unconstitutional, the other provisions will remain in effect. (Section 8)
- The Executive Order takes effect immediately. (Section 9)