MEMORANDUM FOR THE BOARD Formatted: Font: 11 pt

LEVEL OF URGENCY REQUIRED ACTION

HIGH _______ APPROVAL _______

MEDIUM _______ ACTION _______
LOW _______ INFORMATION _______

SUBJECT : AUTHORIZATION OF THE BCDA PRESIDENT TO ACT AS THE

CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF THE SUBIC-
CLARK ALLIANCE DEVELOPMENT COUNCIL (SCADC).REQUEST OF
SUBIC-CLARK ALLIANCE FOR DEVELOPMENT (SCAD) FOR A CIAC
BOARD RESOLUTION AUTHORIZING SCAD EXECUTIVE DIRECTOR
CARMINDA Z. FABROS TO TRANSACT WITH THE DEVELOPMENT
BANK OF THE PHILIPPINES (DBP)-CLARK BRANCH AND THE
PHILIPPINE ANATIONAL BANK (PNB)-CLARK BRANCH. Formatted: Font: 11 pt

DATE : 065129 DECEMBERJULYNE 20197 Formatted: Font: 11 pt

_________________________________________________________________

ISSUE

Approval of the authorization of the BCDA President Vivencio B. Dizon to act as the
Chairman of the SCADC, representing the CIAC Chairman, and to act as the Chief
Executive Officer of SCADC pursuant to Executive Order No. 504-ARequest of SCAD for a
CIAC Board Resolution authorizing SCAD Executive Director Carminda Z. Fabros to
transact with the DBP-Clark Branch and PNB-Clark Branch.

BACKGROUND

1. Executive Order No. 504, Series of 2006, created the Subic-Clark Area Development
(SCAD) Council. The said executive order also provided that the Chairman of the SCAD
Council shall be appointed by the President, with Cabinet rank and who shall be a
member of the National Economic Development Authority (NEDA).

2. Administrative Order No. 150, Series of 2006, renamed the Subic-Clark Area
Development (SCAD) Council to Subic Clark Alliance Development Council (SCADC).

3. In 2008, Executive Order No. 504-A was issued defining the powers and functions of
the Subic Clark Alliance Development Council (SCADC), and designating the Secretary of
Trade and Industry as the Vice-Chairman. The powers and functions of the SCADC
Chairman were also enumerated in the said executive order, one of which is to act as the
Chief Executive Officer of the SCADC.

4. In the same year, Executive Order No. 733 (EO 733) was issued indicating that the
President shall appoint the Chairman of the SCADC from among the members of the
council.

5. In 2010, Executive Order No. 876 was issued designating the Chairman of the Clark
International Airport Corporation as the Chairman of the SCADC, thereby amending EO
733, Series of 2008.
6. On 21 December 21, 2011, Executive Order No. 64 was signed transferring CIAC to
become an attached agency of the Department of Transportation and Communication
(DOTC). It also provided that the CIAC Chairman is the Secretary of the DOTC.

7. On February 28, 2017, Executive Order No. 14 was issued reverting the CIAC as a
subsidiary of the Bases Conversion and Development Authority (BCDA). It also provided
that the Chairman of the CIAC, on ex officio capacity, is the Secretary of Department of
Transportation (DOTr).

78. It can be recalledPrior to the enactment of Executive Order No. 876, Mr. that Ed
Pamintuan served aswas the Chairman of SCAD until his resignation in 2009. He was
succeeded by BCDA Chairman Aloysius Santos via an election among council members.
When Executive Order No. 876 was signed in 2010, it provided that the Clark
International Airport Corporation (CIAC) Chairman shall serve as the Chairman of the
SCAD.

89. Even after the enactment of Executive Order No. 876, the SCAD Chairman was still
elected through popular To establish that the election of SCAD Chairmanship is through
popular vote among the members of the Council., Aa chronology of events is hereby
recounted to appreciate the status quo of SCAD’s chairmanship:

On May 9, 2011’s council meeting, then SCAD Chairman Nestor Mangio turned over to Formatted: Indent: Left: 0", Right: 0"
the council the chairmanship of SCAD. Incidentally, it was also the time when new
council members were appointed. They were Felicito Payumo, then BCDA Chairman;
Arnel Paciano Casanova, then BCDA President; Cesar Villanueva, then CDC Chairman; and
Felipe Antonio B. Remollo, then CDC President.

During the aforesaid council meeting, the new CIAC Chairman was not yet appointed. It
must also be stressed that then Chairman Mangio has already turned over the
chairmanship to the council. As such, it was agreed upon that the members then present
would elect the successor. Such motion was made by CDC Chairman Villanueva and
seconded by CDC President Remollo. As a result thereof, then BCDA Chairman Payumo
was elected by the council as SCAD’s new Chairman.

During the entirety of Payumo’s chairmanship, the council continued with its functions
with all resolutions being made and approved by the incumbent members.

When Chairman Payumo resigned, then BCDA President Arnel Casanova assumed the
SCAD chairmanship from 2011-2012. He was succeeded by Chairman Rolando P.
Gosiengfiao, then later by Chairman Roberto Garcia. Both Gosiengfiao and Garcia
assumed the chairmanship position thru election by the council members.

109. As relayed by the incumbent SCAD Executive Director Linda Pamintuan, the SCAD
chairmanship has beenwas raised before the House Committee on Economic Affairs TWG
meeting on the institutionalization of SCAD and before the Commission on Audit., There
with was nono notable opposition to the election of the SCAD Chairman through popular
vote among the Council members.

10. The SCADC, during its Council meeting held on 8 November 2016, elected the BCDA
President, Vivencio B. Dizon, as itsthe Chairman, with SBMA Chairman elected as Vice
Chairman. As such, the BCDA President, as the elected Chairman of SCADC, also acted
as its Chief Executive Officer pursuant to Executive Order No. 504-A.

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11. Having established that Vivencio B. Dizon, the incumbent President and Chief
Executive Officer (PCEO) of BCDA, may not have a legitimate claim over the chairmanship
of SCAD, he is, thus, deemed considered as a de facto officer. Firstly, he has a validly
existing public office. Secondly, he is in actual physical possession of that office. And
lastly, the title to the office is colorable/defective by reputation/acquiescence. Hence,
everybody supposes that Pres. Dizon is the legal occupant of the office and, apparently,
nobody questions it. As such, all of Pres. Dizon’s actions are considered to have legal
effect and are binding for the protection of people involved in his official acts in
discharging the duties of a public officer.

112. On 28 February 28, 2017, Executive Order No. 14 was issued reverting the CIAC as
a subsidiary of the Bases Conversion and Development Authority (BCDA). It also provided
that the Chairman of the CIAC, on ex officio capacity, is the Secretary of Department of
Transportation (DOTr), while the BCDA President was appointed as ex officio Vice
Chairman of the CIAC.

12. Since Executive Order No. 876 has not been amended or overturned, the CIAC
Chairman is still the designated ex officio Chairman of SCADC. Hence, it is incumbent
upon the CIAC Chairperson to exercise this duty, unless he delegates this responsibility to
a representative.

13. The members of SCADC have already expressed their preference for BCDA President
Vivencio B. Dizon to serve as their Chairman. Since the BCDA President is also the Vice
Chairman of CIAC, he is in a favorablethe best position to act as the representative of the
CIAC Chairman to the SCADC.As a background, iIn 2007, the Bases Conversion and Formatted: Font: 11 pt
Development Authority (BCDA), Clark Development Corporation (CDC), and the Subic Bay
Metropolitan Authority (SBMA) incorporated the SUBIC-CLARK ALLIANCE FOR
DEVELOPMENT CORPORATION (SCADC).

2. BCDA, CDC, SBMA contributed to the paid-up capital of the SCADC amounting to PhP
6,249,600.00.

3. Thereafter, BCDA, SBMA, and CDC, and Clark International Airport Corporation
(CIAC) also contributed minimal amounts in the names of their representative to the
SCADC, to wit:

BCDA : PHP 200.00

SBMA : PHP 200.00
CDC : PHP 200.00
CIAC : PHP 300.00 Formatted: Font: 11 pt, Bold
Formatted: Font: 11 pt
4. Thus, the total pad-up capital of the SCADC amounted to PhP 6,250,500.00, which was
deposited with the PNB-Clark Branch, and later in 2011, about 40% of the balance was
transferred to the DBBDP-Clark Branch. Formatted: Font: 11 pt

5. On 29 March 2016, dDue to non-operation and upon the recommendation of the Formatted: Font: 11 pt
Commission on Audit (COA), the Board of Directors of the SCADC decided to dissolve the
corporation.

6. On 28 December 2017, the Securities and Exchange Commission (SEC0) issued the Formatted: Font: 11 pt
Certificate of Dissolution of the SCADC.

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7. The PNB account became Dormant in 2017; abd and the account must be revived Formatted: Font: 11 pt
before the SCADC’s deposits may be withdrawn. Formatted: Font: 11 pt

8. On 26 November 2019, SCAD requested for a CIAC Board resolution authorizing SCAD
Executive Director Erlinda B. Pamintuan to make the following transaction with the DBP-
Clark Branch and PNP Clark-BranchIn 2018, upon the request of SCAD, the Board
approved the authority of Erlinda B. Pamintuan to transact with DBP-Clark Branch and
PNB Clark Branch (Annex A):: Formatted: Font: 11 pt

a. Arrange for the revival of the PNB account and the withdrawal of the funds of
the SCADC from DBP and PNB;
b. Cause the issuance of individual managers’ checks in such amounts as
corresponds to the pro-rata contributions in the respective names of the
BCDA, CDC, and SBMA, as well as the respective contributions made by the
incorporators as representatives of BCDA, CDC, SBMA and CIAC;
c. To receive the said checks and/or cause the same to be remitted to the
respective offices of the incorporators;
To execute, sign, and deliver any document to the aforesaid banks for the
purposes herein mentioned.
9. On 25 May 2018, the CIAC Board approved the request of SCAD for a CIAC Board
Resolution authorizing SCAD Executive Director Erlinda B. Pamingtuan to transact with
the DBP-Clark Branch and PNB-Clark Branch
d. 10. However, on 05 December 2019, Office of the Corporate Secretary,
received a letter from SCAD dated 26 November 2019 requesting for an
amendment in the CIAC Board approved resolution because Ms. Erlina
Pamintuan has already retired and was replace by Atty. Carmina Z. Fabros.
Formatted: Numbered + Level: 1 + Numbering Style:
a, b, c, … + Start at: 1 + Alignment: Left + Aligned at:
0.5" + Indent at: 0.75"
Formatted: Indent: Left: 0.75"
Formatted: Numbered + Level: 1 + Numbering Style:
a, b, c, … + Start at: 1 + Alignment: Left + Aligned at:
0.5" + Indent at: 0.75"
Formatted: List Paragraph, No bullets or numbering
Formatted: Numbered + Level: 1 + Numbering Style:
a, b, c, … + Start at: 1 + Alignment: Left + Aligned at:
0.5" + Indent at: 0.75"
Formatted: List Paragraph, No bullets or numbering
Formatted: Numbered + Level: 1 + Numbering Style:
a, b, c, … + Start at: 1 + Alignment: Left + Aligned at:
0.5" + Indent at: 0.75"
Formatted: Font: 11 pt
Formatted: List Paragraph
Formatted: Font: 11 pt
Formatted: Numbered + Level: 1 + Numbering Style:
a, b, c, … + Start at: 1 + Alignment: Left + Aligned at:
0.5" + Indent at: 0.75"

10. In March 2019, Erlinda B. Pamintuan retired already.

11. On 26 November 2019, SCAD Executive Director Carmina Z. Fabros met with the
Manager of PNB (Clark Freeport Zone), and according to PNB, a new or updated
resolutions be adopted again by the respective Boards and new secretary's certificates be
issued indicating the approval of the boards of directors for the reactivation of SCADC's
account, and appointment of the authorized representative to reactivate such account,
and the closing and disposition of the proceed thereof.

12. DBP, on the other hand, denied the withdrawal/transfer of funds to the respective
incorporators of the SCADC and suggested that a case be filed in court for the purpose.
Formatted: Font: 11 pt
13. Thus, SCAD is requesting for CIAC Board resolution authorizing SCAD Executive
Moreover, Pres. Dizon’s assumption to office is based on good faith, bereft of indication Formatted: Font: 11 pt
to usurp power or any iota of malice or the desire to defraud others. As relayed by the
incumbent SCAD Executive Director Linda Pamintuan, the SCAD chairmanship was raised
before the House Committee on Economic Affairs TWG meeting on the institutionalization
of SCAD and before the Commission on Audit, with no notable opposition. Furthermore,
the SCAD chairmanship is based on practice wherein members of the SCAD Council would
traditionally vote for their Chairman. Yet again, no one questioned as to the manner on

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how the SCAD Council chooses its Chairman, thereby solidifying Pres. Dizon’s rightful
place to office. It must be stressed that we have diligently tried to go over the minutes
of the council meetings. Unfortunately, there was nothing that made mention of the
transition to an election in choosing the chairmanship of SCAD.
Director Carminda Z. Fabros to make the following transactions with the PNB-Clark
Branch and DBP-Clark Branch (Annex B):

a. Revive/cause the revival of the dormant account of SCADC with PNB; Formatted: Right: 0.57", Numbered + Level: 1 +
Numbering Style: a, b, c, … + Start at: 1 + Alignment:
b. Transact with both PNB and Development Bank of the Philippines, Left + Aligned at: 0.5" + Indent at: 0.75"
Clark Freeport Zone to (a) cause the withdrawal and/or assginment to Formatted: Right: 0.57", Numbered + Level: 1 +
the 3 stockholders (BCDA, CDC and SBMA) respectively of their equal Numbering Style: a, b, c, … + Start at: 1 + Alignment:
shares in the capital on deposit, which includes the PhP 100.00 each Left + Aligned at: 0.5" + Indent at: 0.75"
assigned to their representative as well as interest that may have
accrued to the said account, (b) and/or cause the transfer/deposit to
the individual accounts OR the issuance of separate and individual
manager's checks for the respective shares in the individual names of
the Bases Conversion and Development Authority (BCDA), Clark
Development Corporation (CDC) and Subic Bay Metropolitan Authority
(SBMA).

The PhP100.00 (including interest) contributed by Clark International Formatted: Indent: Left: 0.79", First line: 0", Right:
Airport Corporation (CIAC) for board representation shall be deducted 0.57"
from the full amount on deposit prior to equal distribution of the rest
of the funds to BCDA, CDC and SBMA, and returned/deposited to
CIAC.
Formatted: Indent: Left: 0.75"
Formatted: Font: 11 pt
RECOMMENDATION

In view of the foregoing, Tthe Management recommends the approval of the request of Formatted: Font: 11 pt
SCAD for a CIAC Board Resolution to authorize SCAD Executive Director Carminda Z. Formatted: Font: 11 pt
Fabros to make the following transactions with the PNB-Clark Branch and DBP -Clark
Branch: Formatted: Font: 11 pt

a. Revive/cause the revival of the dormant account of SCADC with PNB;

b. Transact with both PNB and Development Bank of the Philippines,

Clark Freeport Zone to (a) cause the withdrawal and/or assginment to
the 3 stockholders (BCDA, CDC and SBMA) respectively of their equal
shares in the capital on deposit, which includes the PhP 100.00 each
assigned to their representative as well as interest that may have
accrued to the said account, (b) and/or cause the transfer/deposit to
the individual accounts OR the issuance of separate and individual
manager's checks for the respective shares in the individual names of
the Bases Conversion and Development Authority (BCDA), Clark
Development Corporation (CDC) and Subic Bay Metropolitan Authority
(SBMA).

The PhP100.00 (including interest) contributed by Clark International

Airport Corporation (CIAC) for board representation shall be deducted
from the full amount on deposit prior to equal distribution of the rest

Page 5 of 6
 of the funds to BCDA, CDC and SBMA, and returned/deposited to
CIAC.

authorizing SCAD Executive Director Carminda Z. Fabros to transact with the DBP-Clark Formatted: Font: 11 pt
Branch and PNB-Clark Branch.
the authorization of the BCDA President Vivencio B. Dizon to act as the Chairman of the
SCADC, representing the CIAC Chairman, and to act as the Chief Executive Officer of
SCADC pursuant to Executive Order No. 504-A are hereby requested.

For the Board's approval.

RECOMMENDED BY:

ATTY. MISHEENA JOYCE C. TIATCO

Acting Corporate Secretary Formatted: Font: Not Bold

APPROVED BY: Formatted: Font: 11 pt

ALEXANDER S. CAUGUIRANJOSHUA M. BINGCANG

OIC/Acting President and CEOOfficer-in-Charge Formatted: Font: 11 pt

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