Presidential Decree No. 1071






I, FERDINAND E, MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree, as part of the law of the land, the Revised Charter of the Philippine International Trading Corporation as follows:


Section 1. Title of this Decree. This Decree shall be known as the Revised Charter of the Philippine International Trading Corporation.

Sec. 2. Name, Domicile and Place of Business. There is hereby created a body corporate to be known as the Philippine International Trading Corporation, hereinafter referred to as the Corporation, which shall exist for fifty years and shall have its principal office in Metro Manila.

Sec. 3. Capitalization. The authorized capital stock of the Corporation shall be two hundred million pesos (P2,000,000.00), to be divided into two million (2,000,000) shares at par value of one hundred pesos (P100.00) per share to be subscribed as follows: forty per cent (40%) representing eight hundred thousand (800,000) shares valued at eighty million pesos (P80,000,000.00) by the Republic of the Philippines; ten per cent (10%) representing two hundred thousand (200,00) shares valued at twenty million pesos (P20,000,000.00) by the Development Bank of the Philippines; ten per cent (10%) representing two hundred thousand (200,000) shares valued at twenty million pesos (P20,000,000.00) by the Philippine National Bank; and the remaining forty per cent (40%) representing eight hundred thousand (800,000) shares valued at eighty million pesos (P80,000,000.00) by the public at not less than the par value. For the total subscription of the Republic of the Philippines, the amount of forty million pesos (P40,000,000.00) is hereby appropriated out of the funds in the National Treasury, which amount or any portion thereof shall be released to the Corporation upon the approval of the President of the Philippines: Provided, that, the subscription of the Development Bank of the Philippines and the Philippine National Bank shall be paid to the Corporation at such time and for such amounts as shall be requested by the Board of Directors of the Corporation: Provided, further, that, the disposition of the shares available to the public shall be made in such a manner as to result in the widest distribution thereof as possible to individuals or organized businessmen representing specific industries or products without stockholder owning more than one percent (1%) of the total stock offered for subscription to the public and no single group representing one specific industry or product shall own more than five per centum (5%) of such share unless approved by the Board: And, Provided, finally, That, proxy voting is hereby authorized but under no agreement, contract, arrangement, scheme or plan, shall a proxy holder be allowed to represent more than per cent (1%) of the stocks offered to the public for subscription.

"Any disposition of shares of stock of the Corporation which will change the proportion of capital distribution among the National Government, Philippine National Bank, Development of the Philippines, and the public shall be null and void unless previously approved by the President of the Philippines upon recommendation of the Board of Directors. Likewise, no transfer of shares of stock subscribed by the public shall be allowed to be registered in the books of the Corporation which will violate the limitations in the next preceding paragraph unless the same is previously approved by the Board of Directors of the Corporation.

"The President of the Philippines may increase the authorized capital stock of the Corporation upon recommendation by the Board of Directors of the Corporation. The Board of Directors shall recommend such increase upon approval by the affirmative vote of stockholders holding at least two-thirds (3/2) of the subscribed capital stock of the Corporation in a special meeting called for the purpose.

Sec. 4. Voting Power of Government Shares. The voting power of all the stocks owned and controlled by the Republic of the Philippines shall be vested in the President of the Philippines or in such person or persons as he may from time to time designate.


Sec. 5. Purposes of the Corporation. The Corporation is hereby authorized:

"(a) To engage in or handle for Philippine and third country enterprises through methods, systems, devices and facilities intended to achieve economies of scale and better terms of trade for Philippine business, both foreign procurement as well as foreign marketing and distribution;

"(b) To arrange for or established comprehensive facilities for handling all phases of warehousing and to develop and operate physical facilities for the collection, processing and distribution of cargoes and other commodities;

"(c) To obtain or arrange more comprehensive protection for activities undertaken or commodities dealt with by monitoring or coordinating risk insurance services for existing institutions or supplementing the same;

"(d) To employ, utilize, monitor trade promotion services, facilities and activities being undertaken by government or private agencies;

"(e) To promote or organize, whenever warranted, production enterprises and industrial establishment and to collaborate or associate in joint venture with any person, association, company, or entity, whether domestic or foreign, in the fields of production, marketing, procurement, and such other related business;

"(f) To provide technical, advisory investigatory, consultancy and management services with respect to any or all of the functions, activities and operations of the corporation; and,

"(g) In general, to undertake such activities as would be appropriate to an institution created for the purposes of international trading.

Sec. 6. Powers of the Corporations. In order to attain its purposes and objectives, the Corporation shall have the following powers:

"(a) To engage in and carry on the business of dealership, brokerage, manufacture and distribution of commodities, products, goods, wares, merchandise, machineries and equipment and in connection therewith to purchase, borrow, acquire, hold, exchange, sell, distribute, lend, mortgage, pledge or otherwise dispose of, import or export, process or turn to account in any lawful manner, commodities, products, goods wares, merchandise, and other article of commerce and interest therein or instrument evidencing rights to acquire such interest and to guarantee any all obligations relating to transactions made on any board of trade, commodities exchangee, or similar institutions, and to do any all things which may be useful in connection with or incidental to the conduct of such business;

"(b) To build, make, construct, maintain, purchase, sell, charter, deal in and with, own, lease, pledge, and otherwise dispose of all modes of transportation, together with all components, tools, machinery and appliance appurtenant thereto as are utilized in the transport of goods and merchandise by air, land or sea;

"(c) To carry on the business of public and private warehousing and all business necessarily or impliedly incidental thereto, and to further carry on the business of general warehousing in all its several aspects; to construct, hire, purchase, operate and maintain any means or conveyances for the transportation to and from storage, by air, land or water, of any and all products, goods, wares, merchandise or manufactured articles, to issue certificates, warrants and receipts, negotiable or otherwise, to persons warehousing goods with the Corporation, and to make negotiate or secure advances or loans upon the security of such stored merchandise and products or otherwise to construct, purchase, take or lease, develop, operate or otherwise acquire any wharf, pier, dock, warehouse, storage room or other facilities, rights, franchises, premises deemed capable of being advantageously used in connection with the business of the Corporation, and to rent, lease, hypothecate and convey the same, and generally to carry on and undertake and all business activity, transaction or operation commonly carried on or undertaken by warehousemen;

"(d) To act as shipping agent and ship broker, to handle ship husbanding and ship chandlering, and to engage in any aspect for the business of longshoring, lighterage, stevedoring, freight forwarding, packing and carting, and conveying.

"(e) To borrow, raise, or obtain funds to support or carry out its objects and purposes and/or to arrange financing or equipment credit or any kind of financial or material assistance for its own account or its clients from any financial or lending institutions, local or foreign, and to secure any or all of the same, to the extent that may be required such as by any lawful guaranty or counter-guaranty by pledge, mortgaged or deed of trust, or by creating or suffering to exist a charge, lien or encumbrance, general or special, upon its revenues and/or assets, and likewise by similar guaranties, pledges, mortgages, liens and other security arrangements to secure the performance by the Corporation by any obligation or liability it may undertake for itself or for other companies or enterprises in which it may be interested. Such loans obtained under this authority shall be guaranteed by the government in accordance with existing regulations;

"(f) To provide financial accommodations to its clients, and maintain with or for customers' accounts with respect to commodities and/or securities including margin accounts and to do such things as may be requisite or appropriate or incidental to the maintenance for such accounts;

"(g) To act as agents or brokers in the business of marine, fire, life, accident and fidelity insurance, in the business of giving protection to principals and employers and any other kind or class of insurance in all its branches;

"(h) To organize and incorporate subsidiaries whose capital stock may be subscribed in whole or in part by the Corporation; Provided, however, that the controlling interest of not less than sixty per cent (60%) of the authorized capital stock of such subsidiaries shall at all times remain with the Corporation: Provided, finally, that the organization and incorporation of such subsidiaries shall be subject to prior approval of the President of the Republic of the Philippines;

"(i) To establish, maintain, operate or conduct branch business for the transaction of business for itself and on behalf of other persons, firms, corporations, or other entities, either domestic or foreign, and to act as manufacturer's agents, commission merchants, merchandise brokers, insurance, shipping and transport agents, or in any other representative capacity for persons, firms, corporations or other entities, either domestic or foreign, for the investment, loan payment, transmission or collection of money, commodities or securities and for the purchase, sale, improvement, development and management of property including business concerns and undertaking and generally to transact and undertake an agency business, whether in aspect of any commercial or financial matters;

"(j) To undertake or contract for researchers, studies and surveys on any subject of interest to the Corporation including but not but not limited to such matters as business and economic conditions of various countries, including the structure of their commodities and financial markets, the institutional arrangements for mobilizing investments thereat, the legal and tax constraints and tax incentives obtaining therein; to promote products overseas through holding of trade fairs, exhibits and the like, coordinating with the Department of Trade in undertaking such activities;

"(k) To acquire an interest in or to enter into partnership, amalgamate with or enter into other arrangements for sharing profits, mutual assistance or cooperation with any person or company carrying on or about to carry on or engage in any business transaction, operation or work capable of being conducted so as to purchase, take or otherwise acquire and hold shares of stock or other securities of or interest in any such company and to sell, hold and re-issue with or without guaranty or otherwise deal with the same;

"(l) Subject to the limitations established by law, to acquire by purchase, subscription, exchange, assignment, gift, or otherwise, and to sell, assign, transfer, exchange, mortgage, pledge, and deal in and with, and otherwise, to enjoy and dispose of, any bonds, debentures, promissory notes, shares of capital stock and/or other securities and/or obligations, created, negotiated or issued by any corporation, association, or other entity, foreign or domestic, and while the owner thereof, to exercise all the rights, power and privileges of ownership, including the right to receive, collect and dispose of any and all dividends, interest and income, derived therefrom, and the right to vote on any shares of the capital stock, and upon any bonds, debentures and/or other securities, having voting power so owned;

"(m) To cause or allow the legal title to or any legal or equitable interest in any business or any real or personal property acquired or carried on by the Corporation to remain or be vested or registered in the name of any other person or entity whether upon trust for as agent nominee of the Corporation or upon such other terms and conditions which may be determined to be necessary or expedient by the Board of Directors of the Corporation;

"(n) To acquire by purchaser or lease, or otherwise, lands and interest in lands and to own, hold, improve, develop, and manage any real estate so acquired and to erect or cause to be erected on any lands owned, held or occupied by the Corporation, buildings or other structures with their appurtenances, and to rebuild, enlarge, alter or improve any buildings or other structures now or hereafter erected on any lands so owned or occupied;

"(o) To purchase, own, hold, or otherwise acquire such machineries, equipment, tools, materials, supplies, or other parts as may be necessary, convenient or appropriate for any of the purposes for which the Corporation is formed;

"(p) To invest and deal with the funds of the Corporation in such manner as may be deemed proper, in order not to make such funds idle and unproductive pending their full utilization for the principal objects and purposes for which the Corporation has been organized;

"(q) To apply for, register, purchase or otherwise acquire, or obtain a lien, on or interest in, any patent, patent rights, licenses, designs, processes, trademarks, tradenames, distinctive marks, invention, and improvements thereof, and concessions which may appear likely to be advantageous or useful to the Corporation or its clients; to use, exercise or otherwise turn to account said property, rights, and to enter into know-how and data or process feedback agreements, including the use of computers, as the same may be related to or necessary or appropriate to carry on the objects and purposes of the Corporation;

"(r) To pay for any property or rights acquired or services obtained by the Corporation either in cash, shares, or other securities of the Corporation, or partly in cash and partly in shares or other securities, under such terms and conditions as its Board of Directors shall determine to be reasonable. To enter into any of the agencies and instrumentalities thereof, or with any person or company on any undertaking that may be conducive to the attainment of objectives of the Corporation or of any of them, and to obtain from any such government or authority, person or company any rights, privileges and concessions, which the Corporation may think desirable;

"(s) To establish, operate and maintain its own communication system throughout the country as may be needed or required by its business operations for which purpose, the proper franchise is hereby granted; and,

"(t) To do all such other things as are incidental or appurtenant to or growing out of or connected with the aforesaid business or powers of the Corporation or any part thereof or conducive to the attainment of its corporate purposes and objects.


Sec. 7. Composition of Board of Directors. The powers and functions of the Corporation shall be exercised by the Board of Directors which shall be composed of the following:

"(a) The Secretary of the Department of Trade;

"(b) The President of the Corporation;

"(c) The Director-General of the National Economic and Development Authority;

"(d) The Chairman of the Board of Investments;

"(e) The Secretary of the Department of Agriculture;

"(f) The Secretary of the Department of Natural Resources;

"(g) The Chairman of the Board of Governors of the Development Bank of the Philippines;

"(h) The President of the Philippine National Bank;

"(i) A Representative from the Office of the President;

"(j) Six (6) other members to be appointed by the President of the Philippines for a term of five years in such a manner that the first members appointed shall have term of office of one, two and three years for every two members and that, to the extent possible, the financial, agricultural, industrial and commercial interests shall be represented: Provided, however, That for purposes of determining the quorum, the same shall be based on the number of members of the Board actually appointed/designated as such.

"The Secretary of Trade shall be the Chairman of the Board and shall preside over its meetings: Provided, That, whenever the Secretary of Trade is unable to do so, the President of the Corporation shall preside over such meetings; Provided, further, That, if both the Secretary of Trade and the President of the Corporation are absent, the members of the Board present shall, there being a quorum, elect from among themselves a presiding officer for that particular meeting: And, provided, finally, That, except, those, members of the Board representing the private sector, and the Secretary of Trade and the President of the Corporation who shall be represented by the Undersecretary of Trade and the Executive Vice-President, respectively, the other ex-officio members of the Board shall, whenever unable to attend said meetings, be represented by their duly designated representatives who shall have the same powers, duties, and privileges in these meetings as the ex-officio members they are representing.

Sec. 8. Qualifications of the Members of the Board of Directors. No person shall be appointed as member of the Board unless he is a Filipino Citizen, of good moral character and of unquestionable integrity and responsibility and reputed to have considerable experience in foreign trading operations.

Sec. 9. Removal. The President of the Philippines may removed any member of the Board for any of the following reasons:

"(a) If the member no longer possesses the qualifications specified in Sec. 8;

"(b) If the member is guilty of any act or omission of fraudulent or illegal character or manifestly opposed to the aims and interest of the Corporation;

"(c) If in the opinion of the President of the Philippines, continued membership in the Board of such member will be inimical to or work against the interests of the Corporation.

Section 10. Absence and Vacancy. In the event of any vacancy in the Board resulting from the death, resignation or removal of an appointive member, the President of the Philippines shall appoint a new Director who shall serve the unexpired period of the term pertaining to the Director he succeeded.

Section 11. Remuneration. The members of the Board of Directors or their respective alternates, except the President and Executive Vice-President of the Corporation, shall each receive a per diem of P750.00 for every meeting of the Board actually attended. The amount of such per diem received by each Director and his alternate shall not exceed the sum of P1,500.00) for any single month.

Section 12. Power and Functions. The Board of Directors of the Corporation shall have the following powers and functions:

"(a) To adopt corporate by-laws to implement and supplement the provisions of this Decree;

"(b) To establish the policies for determining fees and charges as well as fix such fees and charges for services rendered by the Corporation; or to authorize the President of the Corporation to fix said fees and charges within policies, guidelines and limitations established by the Board;

"(c) To approve appointments made by the President of the Corporations to executive and senior management level positions in the Corporation;

"(d) Consistent with its corporate purposes and powers, to determine/reorganize and approve the most effective organizational framework for the Corporation and its staffing pattern; fix the salaries of its officers and employees and determine their reasonable allowances, bonuses and other incentives as may be recommended by the President of the Corporation;

"(e) Establish administrative rules and regulations for the operation of the Corporation;

"(f) To exercise the general powers of business corporation as provided in Act 1459, as amended;

"(g) To do all act or acts as may be necessary for the achievement of the expressed purposes and powers of the Corporation.


Section 13. Officers of the Corporation. In line with paragraph (d) of the next preceding Section, the Board of Directors shall determine the officers of the Corporation, who except as provided in this Decree, shall be appointed by the President of the Corporation subject to confirmation by the Board. The Corporation may have an Executive Vice-President and such Vice-Presidents and Assistant Vice-President as may be required for the effective operation of the Corporation.

Section 14. Qualification of the President. No person shall be appointed as President of the Corporation unless he is a Filipino Citizen, of good moral character and of unquestionable integrity and responsibility and reputed to have considerable experience in foreign trading operations.

Section 15. Appointment and Tenure. The President of the Corporation shall be appointed by the President of the Philippines for a term of two (2) years without prejudice to renewals.

Section 16. Removal. The President of the Corporation may be removed from office by the President of the Philippines on the same grounds provided for the removal of members of the Board of Directors of the Corporation.

Section 17. Outside Interests of the President. Unless otherwise directed by the President of the Philippines, the President of the Corporation need not limit his professional activities to those pertaining directly to his position in the corporation; and may accept other employment, whether public or private, and receive remuneration therefor; provided, however, that the same should not impair the performance of his duties to the Corporation.

Section 18. Remuneration. The salary of the President of the Corporation shall be fixed by the Board of Directors of the Corporation subject to the approval of the President of the Philippines.

Section 19. Powers and Duties of the President. The President of the Corporation shall be the Chief Executive of the Corporation. He shall have the following powers and duties:

"(a) Submit for the consideration of the Board of Directors such matters, policies and measures he recommends as necessary to carry out the purposes and provisions on this Decree;

"(b) Execute and administer the policies, measures and directives approved by the Board of Directors;

"(c) Direct and supervise the operations and internal administration of the Corporation;

"(d) Delegate any administrative responsibility to other officers of the Corporation as he may deem proper and necessary; and

"(e) Exercise such other powers as may be vested in him by the Board.

Sec. 20. Representation. The President of the Corporation shall be the principal representative of the Corporation and such he shall, in accordance with the instructions of the Board:

"(a) Represent the Corporation in all dealings with other offices, agencies and instrumentalities of the Government and with all other persons or entities, public or private, whether domestic or foreign;

"(b) Execute, on behalf of the Corporation, all contracts and agreements the Corporation may enter into; authorize with his signature, notes and securities issued by the Corporation; and all such other documents of the Corporation;

"(c) To vote all stocks owned or controlled by the Corporation;

"(d) To represent the Corporation, personally or through counsel, in any legal proceeding or action taken by or against the Corporation; and

"(e) To delegate his power to represent the Corporation as provided in subsections (a), (b), (c) and (d) of this Section, to other officers of the Corporation upon his own responsibility.

Sec. 21. Authority of the President in Emergencies. In the event of war or other emergencies which require immediate action by the Board of Directors and there is insufficient time to call a meeting thereof, the President of the Corporation with the concurrence of the Secretary of the Department of Trade or in the latter's absence, with the concurrence of any two (2) other members of the Board, may decide any matter to take any action within the authority of the Board itself and may suspend enforcement of any resolution or decision previously taken by the Board.

"In such cases, the President of the Corporation shall subsequently call a meeting of the Board which shall then ratify of modify such emergency action as the circumstances warrant.

Sec. 22. Executive Vice-President. During the absence or incapacity of the President of the Corporation, the Executive Vice-President shall act as Chief Executive of the Corporation. He shall exercise the powers and perform the duties as may be delegated to him by the President of the Corporation or assigned to him by the Board of Directors.

Sec. 23. The Auditor. The Chairman of the Commission on Audit shall appoint a representative who shall be the auditor of the Corporation. He shall likewise appoint the necessary personnel to assist said representative in the performance of his duties. The salaries of the auditor and his staff shall be fixed by the chairman of the Commission on Audit with the advise of the Board of Directors and said salaries and other expenses for the auditor's office shall be paid by the Corporation. The auditor of the Corporation and personnel under him may be removed only the Chairman of the Commission on Audit.

"The Auditor must be a certified public accountant with at least ten years experience as certified public accountant. No relative of any member of the Board of Directors or the Chairman of the Commission on Audit within the fourth degree of consanguinity and affinity shall be appointed as such representative.


Sec. 24. Annual Report. Before the end of February of each year, the Corporation shall submit to the President of the Philippines an annual report on the condition of the Corporation. The annual report shall contain a review of the policies and measures adopted by the board during the past year and an analysis of the economic and financial circumstances which required such measures and policies. The annual report shall also include an audited statement of the financial condition of the Corporation.

Sec. 25. Fiscal Period, Corporate Profits and Losses. The fiscal period of the Corporation shall commence on the first day of January and end on the last day of December of each year.

"In the event the audited financial statement included in the Annual Report required in the next preceding section reveals a net profit from its business operations, said net profits shall be accumulated in its surplus account which shall be utilized in pursuance of corporate objectives as may be authorized by the Board of directors; Provided, however, that the accumulated surplus shall not, at the end of any fiscal period, exceed twenty five (25%) per centum of the authorized capital stock of the Corporation.

"Whenever the audited financial statement reveals a net loss from the business operations of the Corporation, such loss shall be debited to surplus, and if surplus be inadequate, the balance shall be debited to the capital of the Corporation.

Sec. 26. Dividends. Whenever surplus profits arise from the business operations of the Corporation as reflected by its Annul Report, and such profits exceed twenty-five (25%) per centum of the authorized capital stock of the Corporation, the excess shall be available for declaration as dividends accruing to the shares of stock issued by the Corporation, under the condition hereunder set forth.

Sec. 27. Declaration of Dividends. After determination of the existence of excess surplus profits, the Board of Directors may either declare the payment of cash dividends or recommend to the stockholders of the Corporation the declaration of stock dividends; and in the latter event, no stock dividend shall be issued without the approval of stockholders representing not less than two thirds (2/3) of all stock then outstanding and entitled to vote at a general meeting of stockholders or at a special meeting duly called for the purpose.

"Cash dividends accruing to the shares of the National Government of the Republic of the Philippines shall first be applied to the unpaid subscriptions of the National Government until the same is duly paid. Thereafter, any further dividends due the National Government shall be paid to the National Treasury of the Philippines for the general funds thereof.

Sec. 28. Personnel Recruitment. the Corporation shall adopt a special recruitment and employment scheme as a merit system that is responsive to the commercial nature of its operations. Further, the Corporation is hereby authorized to extend permanent appointment to, or contract the services of, trained and experienced persons, even without civil service eligibility, for its manpower build-up as a competing trading firm. In view of the pioneering nature of each operation, the Corporation shall continue to be exempt from the OCPC rules and regulations.

"Officers and employees of the Corporation, including all members of the Board of the Directors, shall not engage directly or indirectly in any partisan political activity or take part in any election except to vote.

Sec. 29. Responsibilities and Penalties. Any member of the Board of Directors or officers or employees of the Corporation who willfully violates this Decree or the By-laws of this Corporation adopted pursuant to said Decree, or who is guilty of gross negligence in the performance of his duties, shall be held liable for any loss or damage suffered by the Corporation as a result of such violation or negligence. Similar responsibility shall apply to the disclosure of any information of a confidential nature about the discussions or resolutions of the Board of Directors or about the operations of the Corporations, and to the use of such information for personal gain to the detriment of the Corporation.

"Any director, officer, employee or agent of the Corporation who violates or aids in or abets the violation of any of the provisions of this Decree shall be punished by a fine not exceeding ten thousand pesos or by imprisonment of not more than five years, or both such fine and imprisonment.

Sec. 30. Liquidation. In the event of liquidation of the Corporation, for any cause, the investment of the private sector in the capital stock of the Corporation shall have preference in the petition of the assets of the Corporation.

Sec. 31. Repealing Clause. Presidential Decree No. 252 as amended is hereby repealed. All acts, decrees, rules, regulations, and other official issuance or parts thereof, inconsistent or incompatible with any of the provisions of this Decree are likewise hereby repealed or modified accordingly.

Sec. 32. This Decree shall take effect immediately."

Done in the City of Manila, this 25th day of January, nineteen hundred and seventy-seven.

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