Revising The Charter Of The Philippine International Trading Corporation

Case Overview and Summary

Summary of Presidential Decree No. 1071 - Revised Charter of the Philippine International Trading Corporation

Title and Creation
- This decree shall be known as the Revised Charter of the Philippine International Trading Corporation. (Section 1)
- The Philippine International Trading Corporation is created as a body corporate with a lifespan of 50 years and its principal office in Metro Manila. (Section 2)

Capitalization
- The authorized capital stock is 200 million pesos, divided into 2 million shares at 100 pesos par value per share. (Section 3)
- The subscription is as follows: 40% (800,000 shares worth 80 million pesos) by the Republic of the Philippines, 10% (200,000 shares worth 20 million pesos) by the Development Bank of the Philippines, 10% (200,000 shares worth 20 million pesos) by the Philippine National Bank, and the remaining 40% (800,000 shares worth 80 million pesos) by the public. (Section 3)
- The President of the Philippines may increase the authorized capital stock upon recommendation by the Board of Directors and approval by stockholders holding at least two-thirds of the subscribed capital stock. (Section 3)

Voting Power of Government Shares
- The voting power of all stocks owned and controlled by the Republic of the Philippines shall be vested in the President of the Philippines or his designee. (Section 4)

Corporate Powers and Functions
- The Corporation is authorized to engage in international trading activities, including procurement, marketing, warehousing, insurance, financing, establishing production enterprises, providing consultancy services, and other related activities. (Section 5)
- The Corporation has various powers related to trading, transportation, warehousing, shipping, financing, insurance, establishing subsidiaries, investments, real estate, patents, communication systems, and other incidental powers. (Section 6)

Board of Directors
- The Board of Directors shall exercise the powers and functions of the Corporation. (Section 7)
- The Board shall be composed of the Secretary of Trade (as Chairman), the President of the Corporation, the Director-General of NEDA, the Chairman of the Board of Investments, the Secretaries of Agriculture and Natural Resources, the Chairmen of DBP and PNB, a representative from the Office of the President, and six other members appointed by the President for a term of five years. (Section 7)
- Members of the Board must be Filipino citizens, of good moral character, and have considerable experience in foreign trading operations. (Section 8)
- The President of the Philippines may remove any member of the Board for specific reasons. (Section 9)
- Board members shall receive a per diem of 750 pesos per meeting attended, with a maximum of 1,500 pesos per month. (Section 11)
- The Board has various powers and functions, including adopting by-laws, establishing policies, approving appointments, determining organizational structure, establishing rules and regulations, and exercising general corporate powers. (Section 12)

Officers of the Corporation
- The Board shall determine the officers of the Corporation, who shall be appointed by the President of the Corporation, subject to confirmation by the Board. (Section 13)
- The President of the Corporation shall be appointed by the President of the Philippines for a term of two years, renewable. (Section 15)
- The President of the Corporation must be a Filipino citizen, of good moral character, and have considerable experience in foreign trading operations. (Section 14)
- The President of the Corporation may be removed by the President of the Philippines on the same grounds as removal of Board members. (Section 16)
- The President of the Corporation may accept other employment, provided it does not impair his duties to the Corporation. (Section 17)
- The President of the Corporation shall be the Chief Executive and have various powers and duties, including executing policies, directing operations, representing the Corporation, and acting in emergencies. (Sections 19-21)
- The Executive Vice-President shall act as Chief Executive during the absence or incapacity of the President. (Section 22)
- The Auditor shall be appointed by the Chairman of the Commission on Audit and shall be a certified public accountant with at least 10 years of experience. (Section 23)

Miscellaneous Provisions
- The Corporation shall submit an annual report to the President of the Philippines before the end of February each year. (Section 24)
- The fiscal period of the Corporation is from January 1 to December 31 each year. (Section 25)
- Net profits shall be accumulated in the surplus account, which shall not exceed 25% of the authorized capital stock. Net losses shall be debited to surplus and capital. (Section 25)
- Excess surplus profits above 25% of the authorized capital stock shall be available for declaration as dividends. (Section 26)
- The Board may declare cash dividends or recommend stock dividends, subject to approval by stockholders representing at least two-thirds of outstanding stock. (Section 27)
- The Corporation shall adopt a special recruitment and employment scheme as a merit system, and may extend permanent appointment or contract services without civil service eligibility. (Section 28)
- Officers and employees shall not engage in partisan political activities, except voting. (Section 28)
- Penalties are prescribed for willful violation of the decree, gross negligence, disclosure of confidential information, and aiding or abetting violations. (Section 29)
- In the event of liquidation, the investment of the private sector in the capital stock shall have preference in the partition of assets. (Section 30)
- Presidential Decree No. 252, as amended, and other inconsistent issuances are repealed or modified accordingly. (Section 31)