Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:


SECTION 1. Name, Duration and Domicile.-A semi-public corporation is hereby created which shall be known as the "Philippine Sugar Institute," hereinafter called the "PHILSUGIN," which shall be organized within sixty days after the approval of this Act. It shall exist for a term of fifty years from the date of the approval of this Act and shall have its main office in the City of Manila, and such branches and agencies within or outside the Philippines, as may be necessary for the proper conduct of its business. This Corporation shall be under supervision of the Administrator of Economic Coordination.

SEC. 2. Purposes and Objectives.-The PHILSUGIN shall have the following purposes and objectives:

1. To conduct research work for the sugar industry in all its phases, either agricultural or industrial, for the purpose of introducing into the sugar industry such practices or processes that will reduce the cost of production, increase and improve the industrialization of the byproducts of sugar cane, and achieve greater efficiency in the industry;
   
2. To improve existing methods of raising sugar cane and of sugar manufacturing;
   
3. To insure a permanent, sufficient and balanced production of sugar and its by-products for local consumption and exportation;
   
4. To establish and maintain such balanced relation between production and consumption of sugar and its by products, and such marketing conditions therefor, as will insure stabilized prices at a level sufficient to cover the cost of production plus a reasonable profit;
   
5. To promote the effective merchandising of sugar and its by-products in the domestic and foreign markets so that those engaged in the sugar industry will be placed on a basis of economic security; and
   
6. To improve the living and economic conditions of laborers engaged in the sugar industry by the gradual and effective correction of the inequalities existing in the industry.

SEC. 3. Specific and General Powers.-For carrying out the purposes mentioned in the preceding section, the PHILSU-GIN shall have the following powers:

1. To establish, keep, maintain and operate, or help establish, keep, maintain, and operate one central experiment station and such number of regional experiment stations in any part of the Philippines as may be necessary to undertake extensive research in sugar cane culture and manufacture, including studies as to the feasibility of mechanizing sugar cane farms, the control and eradication of pests, the selection and propagation of high-yielding varieties of sugar cane suited to Philippine climatic conditions, and such other pertinent studies as will be useful in adjusting the sugar industry to a position independent of existing trade preference in the American market;
   
2. To purchase such machinery, materials, equipment and supplies as may be necessary to prosecute successfully such researches and experimental work;
   
3. To explore and expand the domestic and foreign markets for sugar and. its by-products to assure mutual benefits to consumers and producers, and to promote and maintain a sufficient general production of sugar and its by-products by an efficient coordination of the component elements of the sugar industry of the country;
   
4. To buy, sell, assign, own, operate, rent or lease, subject to existing laws, machineries, equipment, materials, merchant vessels, rails, railroad lines, and any other means of transportation, warehouses, buildings, and any other equipment and material for the production, manufacture, handling, transportation and warehousing of sugar and its by-products ;
   
5. To grant loans, on reasonable terms, to planters when it deems such loans advisable;
   
6. To enter, make and execute contracts of any kind as may be necessary or incidental to the attainment of its purposes with any person, firm, or public or private corporation, with the Government of the Philippines or of the United States, of any state, territory or persons therefor or with any foreign government and, in general, to do everything directly or indirectly necessary or incidental to, or in furtherance of, the purposes of the corporation;
   
7. To do all such other things, transact all such business and perform such functions directly or indirectly necessary, incidental or conducive to the attainment of the purposes of the corporation; and
   
8. Generally, to exercise all the powers of a corporation under the Corporation Law insofar as they are not inconsistent with the provisions of this Act.

SEC. 4. Composition and Appointment.-All corporate powers of the PHILSUGIN shall be vested in, and exercised by, a board of directors consisting of five (5) members to be appointed by the President of the Philippines with the consent of the Commission on Appointments; Provided, however, That three of the members of the said Board shall be appointed upon the recommendation of the National Federation of Sugar Cane Planters and two, upon the recommendation of the Philippine Sugar Association. The Chairman of the Board shall be elected by the members from among themselves.

SEC. 5. Tenure and Compensation.-The members of the Board shall serve as designated by the President of the Philippines in their respective appointments for terms of one, two, and three years, respectively, from the date they qualify and assume office, but their successors shall be appointed for a term of three years, except that any person chosen to fill a vacancy shall serve only for the unexpired term of the member whom he succeeds. For actual attendance at meetings, each director shall receive a per diem of twenty-five pesos.

SEC. 6. Powers and duties of the Board of Directors.- The Board of Directors shall have the following powers and duties:

1. To prescribe, amend, modify, or repeal by-laws, rules and regulations, not inconsistent with the provisions of this Act, governing the manner in which the general business of the corporation may be exercised, subject to the approval of the Administrator of Economic Coordination;
   
2. To appoint and fix the compensation of the General Manager, subject to the approval of the President of the Philippines, and to appoint and fix the compensation of the other officers of the corporation, with the approval of the Administrator of Economic Coordination. The Board by a majority vote of all the members, may, for just cause, and, with the approval of the President of the Philippines, suspend or remove the General Manager;
   
3. To approve the annual and/or such supplemental budgets of the corporation which may be submitted to it by the General Manager from time to time; and
   
4. To perform such other duties as may be assigned to it by the President of the Philippines or by the Administrator of Economic Coordination.

SEC. 7. Suspension and Removal of Directors.-Any member of the Board of Directors may, for cause, be suspended or removed by the President of the Philippines solely or upon the recommendation of the Administrator of Economic Coordination.

SEC. 8. Prohibition for Board Members.-No chairman or member of the Board of Directors of a corporation shall at the same time serve in the corporation in any capacity whatsoever other than as chairman or member thereof, unless otherwise authorized by the President.


SEC. 9. Managing Head.-The management of the corporation shall be vested in the General Manager.

SEC. 10. Powers and Duties of the General Manager.- The General Manager shall have the following powers and duties:

1. To direct and manage the affairs and business of the corporation, on behalf of the Board of Directors, and subject to its control and supervision;
   
2. To sit in all meetings of the Board of Directors, and participate in its deliberations, but without the right to vote;
   
3. To submit within sixty (60) days after the close of each fiscal year an annual report, through the Board of Directors, to the Administrator of Economic Coordination;
   
4. To appoint and fix the number and salaries, with the approval of the Board of Directors, of such subordinate personnel as may be necessary for the proper discharge of the duties and functions of the corporation, and, with the approval of the Board, to remove, suspend, or otherwise discipline, for just cause, any subordinate employee of the corporation; and
   
5. To perform such other duties as may be assigned to him by the Board of Directors from time to time.

SEC. 11. Basis.-In the appointment and promotion of officers and employees, merit and efficiency shall serve as basis, and no political test or qualification shall be prescribed and considered for such appointments or promotions. Any person appointed by the Board or by the General Manager, in violation of this prohibition, shall be removed from office by the Administrator of Economic Coordination.

SEC. 12. Application of Civil Service Law and Regulations.-All officers and employees of the corporation shall be subject to the Civil Service Law, rules and regulations, except those whose positions may, upon recommendation of the Board of Directors, be declared by the President of the Philippines as policy-determining, primarily confidential or technical in nature.


SEC. 13. Personnel.-The Auditor General shall appoint a representative who shall be the Auditor of the corporation, and the necessary personnel to assist said representative in the performance of his duties. The number and salaries of the Auditor and said personnel shall be determined by the Auditor General, with the advice of the Board of Directors. In case of disagreement, the matter should be submitted to the President of the Philippines whose decision shall be final. Said salaries and all other expenses of maintaining the Auditor's office shall be paid by the corporation.

SEC. 14. Report.-The financial transactions of the PHILSUGIN shall be audited in accordance with Law, administrative regulations, and the principles and procedures applicable to commercial corporate transactions. A report of audit for each fiscal year, by the Auditor, through the Auditor General, to the Board of Directors of the corporation, and copies thereof shall be furnished the President of the Philippines, the Administrator of Economic Coordination and the Presiding Officers of the two Houses of Congress. The report shall set forth the scope of the audit and shall include a statement of assets and liabilities, capital and surplus or deficit; a statement of surplus or deficit analysis; a statement of income and expenses; a statement of sources and application of funds; and such comments and information as may be necessary, together with such recommendations with respect thereto as may be advisable including a report of any impairment of capital noted in the audit. The report shall also show specifically any program, expenditure, or other financial transaction or undertaking observed in the course of audit which, in the opinion of the Auditor, has been carried on or made without authority of law.


SEC. 15. Capitalization.-To raise the necessary funds to carry out the provisions of this Act and the purposes of the corporation, there shall be levied on the annual sugar production a tax of ten centavos per picul of sugar to be collected for a period of five years beginning the crop year 1951-1952. The amount shall be borne by the sugar cane planters and the sugar centrals in the proportion of their corresponding milling share, and said levy shall constitute a lien on their sugar quedans and/or warehouse receipts.

SEC. 16. Special Fund.-The proceeds of the foregoing levy shall be set aside to constitute a special fund to be known as the "Sugar Research and Stabilization Fund," which shall be available exclusively for the use of the corporation. All the income and receipts derived from the special fund herein created shall accrue to, and form part of, the said fund to be available solely for the use of the corporation.


SEC. 17. Liquidation.-When its term or period of existence has expired in accordance with the provisions of this Act, it shall, nevertheless, continue as a body corporate for three (3) years after the time of its dissolution for the purpose of prosecuting and defending suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of and convey its properties, but not for the purpose of continuing the business for which it was established. In order to carry out its liquidation, upon the dissolution of the corporation, a Board of Liquidators shall be appointed by the President to take charge of winding up its corporate affairs and effecting its liquidation, subject to the supervision and control of the Administrator of Economic Coordination.

SEC. 18. Reversion to General Funds.-All funds resulting from the dissolution and liquidation of the corporation as herein provided shall revert to the General funds of the Government.


SEC. 19. Applicability of the Corporation Law.-The provisions of the Corporation Law which are not inconsistent with the provisions of this Act, shall be applicable to the corporation created hereunder.

SEC. 20. Repeal or Modification.-All Acts, Executive Orders, Administrate Orders, and Proclamations or parts thereof inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.

SEC. 21. Constitutionality.-If any provision of this Act shall be held unconstitutional, the other provisions shall not thereby be affected.

SEC. 22. Effectivity.-This Act shall take effect upon its approval.

Approved, June 6, 1951.