EXECUTIVE ORDER NO. 842
EXECUTIVE ORDER NO. 842 - 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:
Section 1. Creation of the National Development Fund.
— The National Development Company (“NDC”) is hereby authorized to
enter into investment whereby NDC shall undertake to manage the funds
of said investors. The funds contributed by said investors shall,
however, be pooled for administrative purposes in a fund or sub-funds
to be collectively known as the “National Development Fund” (the
“Fund”) which shall be invested in, among others, economically viable
projects of NDC.
Sec. 2. Issuance of National Development Fund
Certificates. — To evidence the investments made in the Fund, NDC, is
hereby authorized to issue certificates, to be called “National
Development Fund Certificates” (“NDF Certificates”) to the investors.
In issuing the NDF Certificates, NDC shall not be considered as
exercising “quasi-banking functions” nor “financial intermediations” as
defined under Sec. 2-D of the General Banking Act, and the NDF
Certificates shall not be considered as “deposit substitutes” as
defined under Section 100-A of the General Banking Act.
Sec. 3. Management. — The Fund shall be managed by
NDC, as the agent of the investors, and NDC shall not change a
management fee nor share in the income of the Fund, although it shall
be entitled to reimbursement of expenses. As investment manager, NDC is
hereby authorized to formulate the specific features of the Fund and
the NDF Certificates as well as the guidelines in the operation
thereof.
Sec. 4. Board of Trustees. — The investors shall
be represented by a Board of Trustees to whom NDC will report on the
operations of the Fund.
Sec. 5. Protection of Investment. — To safeguard
the interest of the investors in the Fund such that the investment of
each investor can be redeemed at least at the face value of each NDT
Certificate, NDC as investment manager, is hereby directed to stand
ready to purchase any of the investments of the Fund in the event the
total net asset value of the Fund falls below its total original
acquisition cost.
Sec. 6. Taxes. — For purposes of taxation, the
Fund shall not be considered a “corporation” under the National
Internal Revenue Code and as such will not be subject to income tax.
The Fund shall be deemed owned by the investors in proportion to their
respective interests and all income earned by the Fund shall be deemed
the income of the investors for which said investors shall bear all
taxes. In cases, therefore, where the income earned by the Fund is
subject to final taxes, said taxes shall be deemed paid by the
investors.
Sec. 7. Auditor. — NDC shall appoint an
independent Certified Public Accountant to be the auditor of the
National Development Fund.
Sec. 8. Separability Clause. — Should any
provision of this Order be held to be unconstitutional, no other
provision thereof shall be affected thereby.
Sec. 9. Effectivity. — This Order shall take
effect immediately.
Done in the City of Manila,
this 5th day of November, in the year of Our Lord, nineteen hundred and
eighty-two.