Creating a Light Rail Transit Authority, vesting the same with authority to construct and operate the Light Rail Transit (LRT) Project and providing funds therefore.

WHEREAS, Metropolitan Manila, as the premier metropolis of the country, requires an efficient mass transportation system which can provide its people with safe, fast, reliable mobility.

WHEREAS, a Metropolitan Manila transportation, land use and development planning study was conducted to guide transportation investments and operation, and such study indicates that a light rail transit system is recommended, among others, to alleviate the worsening traffic and transportation situation in Metropolitan Manila, within the context of a rational land use pattern.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by President Decree No. 1416, do hereby order the creation and organization of Light Rail Transit Authority.

Sec. 3. Board of Directors - The powers and functions of the Authority shall be vested in and exercised by the Board of Directors composed of the Minister of Human Settlements as Chairman; Minister of Transportation and Communications as Vice-Chairman; the Minister of Finance, the Minister of Economic Planning, the Minister of Public Highways, the Minister of the Budget, the Chairman of the Board of Transportation, and the Administrator of the Authority, as ex-officio members; and one (1) representative from the private sector to be appointed by the President. The appointed directors shall serve for a term of two (2)years.

The officials next in rank to, or such officials duly designed by, the regular members shall serve as alternate members, except that, in the absence of the Chairman, the Board shall elect a temporary presiding officer. The alternate members shall attend meetings of the Board and committees assigned to them by their principals and receive the corresponding per diem, whenever their principals are absent or said positions are vacant.

The Chairman and each Member of the Board shall receive a monthly commutable representation allowance of ONE THOUSAND (P1,000.00) PESOS and a per diem of TWO HUNDRED (P200) PESOS for every meeting of the Board actually attended: Provided that the total amount of the per diems which each may receive shall not exceed of ONE THOUSAND (P1,000.00) PESOS a month.

• To have continuous succession under its corporate name, until otherwise provided by law;

• To prescribe, amend and/or repeal by its laws;

• To adopt and use a seal and alter it at its pleasure;

• To sue and be sued;

• To contract any obligation or enter into, assign or accept the assignment of, and vary or rescind any agreement, contract of obligation necessary or incidental to the proper management of the Authority;

• To borrow funds from any source, private or public, foreign or domestic, and issue bonds and other evidence of indebtedness, the payment of which shall be guaranteed by the National Government, subject to pertinent borrowing law;

• To acquire, receive, take and hold by request, devise, gift, purchase or lease, either absolutely or in trust for any of its purposes, from foreign and domestic sources, any asset, grant or property, real or personal, subject to such limitations as are provided in existing laws; to convey or dispose of such assets, grants or properties, movable and immovable; and invest and/or reinvest such proceeds and deal with and expand its assets and income in such a manner as will best promote its objectives;

• To improve, develop or alter any property held by it;

• To carry on any business, either alone or in partnership with any person or persons;

• To employ an agent or contractor to perform such things as the Authority may perform;

• To exercise the right of eminent domain, whenever the Authority deems it necessary for the attainment of its objectives;

• To prescribe rules and regulations in the conduct of its general business as well as to fix and implement the terms and conditions of its related activities;

• To determine the fares payable by persons travelling on the light rail system, in consultation with the Board of Transportation;

• To establish, operate, and maintain branches or field offices when required by the exigencies of its business;

• To determine its organizational structure and the number, positions and salaries of its personnel, subject to pertinent organization and compensation law; and

• To exercise such powers and perform such duties as may be necessary to carry out the business and purposes for which the Authority was established or which, from time to time, may be declared by the Board of Directors to be necessary, useful, incidental or auxiliary to accomplish such purposes; and generally, to exercise all powers of an Authority under the Corporation Law that are not inconsistent with the provisions of this Order, or with orders pertaining to government corporate budgeting, organization, borrowing, or compensation.

• Sec. 5. Specific Powers - The Board shall have the following specific powers:

• To provide comprehensive policy guidance for the development, operation and promotion of a light rail transit system as provided for in this Order;

• To formulate a comprehensive and practicable plan/program for the early completion of an LRT system in Metropolitan Manila; to employ the necessary consultancy services therefore and to organize, and employ personnel for a Project Management Office that will supervise the construction of the said Metropolitan Manila LRT System;

• To borrow or otherwise raise money and charge all or any part of its properties as security thereof;

• To create and issue bonds, notes or other securities which may be charged on the property, undertaking and/or revenue of the Authority or any part thereof;

• To invest any funds of the Authority available for investment;

• To cooperate, coordinate, and exchange such information, studies, and reports with, and to seek the cooperation of other agencies and instrumentalities of the National Government including government-owned or controlled corporations, as will be most effectively conducive to the achievement of the purposes of this Order;

• To provide managerial or administrative expertise including the rendering of professional and training services for the development of the staff and employees of the Authority;

• To issue orders, not inconsistent with this Order, negotiating the work and conduct of its personnel;

• To appoint, discipline, and remove personnel of the Authority in accordance with laws;

• To recommend to the President, through the National Economic and Development Authority, the establishment of light rail transit systems, where feasible, in other parts of the country;

• To report annually to the President of the Philippines on the status of its operations and finances, not later than three (3) months after the year end; and

• To perform such acts as are proper and necessary to carry out the purposes of the Authority.

The Republic of the Philippines hereby guarantees the payment by the Authority of both principal and the interest of the bonds of other evidences of indebtedness and shall pay such principal and interest, in case the Authority fails to do so. Provided, That the sums so paid by the Republic of the Philippines shall be refunded by the Authority; and provided further, That the Authority, to assure such refunding, shall establish reserves or sinking funds and comply with such other restrictions and conditions as the Minister of Finance may prescribe and establish for that purpose.

Sec. 7. Foreign Loans - The Authority is hereby authorized to contract loans, credits or indebtedness in any convertible foreign currency or capital goods, from foreign governments or any international financial institutions or fund source, or to issue bonds, the total outstanding amount of which, exclusive of interest, shall not exceed $300 million or the equivalent thereof in other currencies on such terms and conditions as it shall deem appropriate for the accomplishment of its purposes and to enter into and execute agreements and other documents specifying such terms and conditions.

The President of the Philippines, by himself, or through his duly authorized representative, is hereby authorized to negotiate contract with foreign governments or any international financial institutions or fund sources, in the name and on behalf of the Authority, for the accomplishment of its purposes.

The President of the Philippines, by himself, or through his duly authorized representative, is hereby further authorized to guarantee, absolutely, and unconditionally as primary obligor and not as surety merely, in the name and on behalf of the Republic of the Philippines, the payment of the loans credits, indebtedness and bonds issued up to the amount herein authorized, which shall be over and above the amount which the President of the Philippines is authorized to guarantee under Republic Act Numbered Forty Eight Hundred Sixty, as amended, as well as the performance of all or any of the obligations undertaken by the Authority in the territory of Republic of the Philippines, pursuant to Loan Agreements entered into with foreign governments or any international financial institutions or fund sources.

Any loan, credit, indebtedness, contracted by the Authority and the payment of the principal. Interest and other charges thereon, as well as the importation of the machinery, equipment, materials, supplies, and services paid from the proceeds of any such loan or indebtedness shall be exempt from all direct and indirect taxes, customs duties, fees, imposts, other charges and restrictions, including import restrictions, previously and presently imposed and to be imposed by the Republic of the Philippines, or any of its agencies and political subdivisions.

Sec. 8. Equipment, Machineries, Spare Parts, and Other Accessories and Materials - The importation of equipment, machineries, spare parts, accessories, and other materials, including supplies and services, used directly in the operations of the Light Rail Transit Systems, not obtainable locally on the favorable terms, out of any funds of the Authority including, as stated in Section 7 above, proceeds from foreign loans, credits or indebtedness, shall, likewise, be exempted from all direct and indirect taxes, customs duties, fees, imposts, tariff duties, compensating taxes, wharfages fees and other charges and restrictions, the provisions of existing laws to the contrary notwithstanding.

• Implement, enforce, and apply the policies, programs, plans, standards, guidelines, procedures, decisions, rules and regulations issued, prescribed, or adopted by the Board;

• Undertake the studies, investigations, and other activities related to the operations, on his own initiative or upon instructions of the Board, and to submit comprehensive reports and appropriate recommendations to the Board for its information and action;

• Undertake studies for present and future requirements of development of the LRT project expansion, in consultation with appropriate agencies;

• Manage the affairs of the Authority, subject to provisions of this Order and applicable laws, orders, rules and regulations;

• Determine the staffing pattern and the number of personnel of the Authority and with the approval of the Board, define their functions and duties;

• Inspect the LRT facilities and operations regularly and recommend measures to obtain to maintain a high standard of safe , fast, and reliable service;

• Establish and maintain, in coordination with the appropriate government offices and agencies a regular and prompt information system regarding traffic flows, LRT operations, finance and other related data;

• Delegate, with the approval of the Board, such functions and duties to the Deputy Administrators or other ranking officials of the Authority for the efficient administration and management thereof; and,

• Perform such other duties as the Board may assign and such acts may be necessary and proper to implement this Order.

Sec 11. Supplies and Services Other than Personnel - All purchase of supplies or contracts for the services, except for personal services, entered into by the Authority, shall be done through competitive public bidding; Provided, That bidding shall not be required when an emergency, as certified by the Administrator, required immediate delivery of the supplies or performance of the services, and the aggregate amount involved in any one purchase of supplies or procurement of services does not exceed Ten Thousand Pesos, in which case, such purchase or procurement of services does not exceed Ten Thousand Pesos, in which case, such purchase or procurement may be made in the usual course of business: Provided further, that the Authority's emergency purchase of supplies and services shall not exceed the amount of Fifty Thousand Pesos for any one month: Provided finally, That in comparing bids and in making awards, the Authority shall consider such factors as the cost and relative quality and adaptability of supplies or services; the bidder's financial responsibility, skill, experience, integrity, and ability to furnish repairs and maintenance services, the time of delivery or performance offered; and the bidder's compliance with the specifications desired.

Sec. 12. Department of the Authority - The authority shall established and maintain such departments as it may deem necessary for the proper and efficient transaction and/or operations of its business. The powers and duties of the departments shall be determined by the Board: Provided, That the office of the Chief Legal Counsel of the Authority, which shall be separate and distinct from and independent of the Office of the Government Corporate Counsel, shall advise and represent the Authority in all legal matters, procedures, and actions.

Sec. 13. The Auditor - The Chairman of the Commission on Audit shall appoint a representative who shall be the auditor of the Authority. He shall likewise appoint the necessary personnel to assist said representative in the performance of his duties. Subject to the approval of the Board of Directors of the Authority, the salaries of the Auditor and his staff shall fixed by the Chairman of the Commission on Audit. Salaries and other expenses for the auditor's office shall be paid by the Authority. The Auditor of the Authority and personnel under him may be removed only by the Chairman of the Commission on Audit.

Sec. 14. Authority to Administer Oath - The Chairman of the Board, the Administrator, the Deputy Administrators, and the Chief Legal Counsel of the Authority shall have the power to administer oaths in connection with the transaction of the official business.

•  The sum of TWO HUNDRED MILLION PESOS (P 200,000,000.00) to be taken from the general fund in the National Treasury out of the appropriations available for the purpose.

• The balance of the authorized capital amounting to THREE HUNDRED MILLION PESOS (P 300,000,000.00) shall be released from the National Treasury out of appropriations available for the purpose, or subscribed and paid by the government institutions as may be authorized pursuant to this Section, with the approval of the President.

Sec. 16. Initial Debt - The Authority shall be indebted to the Government, or any of its ministries, bureaus, agencies or offices, in a sum equal to all expenditures, directly or indirectly advanced or incurred by the Government or any of its ministries, bureaus, agencies, or offices, in relation to the investigation, planning and/or construction of the Light Rail Transit System. The Minister of Finance shall, upon prior notice, determine the accuracy and reasonableness of such advances or indebtedness.

Sec. 17. Penalties - Any person who wilfully or maliciously gives false or misleading data or information, or conceals or falsifies a material fact, in any investigation, inquiry or hearing, or other proceedings held by the Board or the Authority or any one duly acting in their behalf, shall be dealt with according to the pertinent provisions of the existing penal laws.

If any reason, any section or provisions of this Order is declared to be unconstitutional or invalid, the other sections or provisions hereof, which are not affected hereby, shall continue in full force and effect.

Sec. 19. Effectivity - This Order shall take effect immediately.

DONE in the City of Manila, this 12th day of July, in the year of our Lord, nineteen hundred and eighty.

FERDINAND E. MARCOS
President of the Philippines

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