PRESIDENTIAL DECREE No.

957 July 12, 1976

REGULATING THE SALE OF SUBDIVISION LOTS
AND CONDOMINIUMS, PROVIDING PENALTIES
FOR VIOLATIONS THEREOF
WHEREAS, it is the policy of the State to afford its
inhabitants the requirements of decent human
settlement and to provide them with ample
opportunities for improving their quality of life;
WHEREAS, numerous reports reveal that many real
estate subdivision owners, developers, operators,
and/or sellers have reneged on their representations
and obligations to provide and maintain properly
subdivision roads, drainage, sewerage, water
systems, lighting systems, and other similar basic
requirements, thus endangering the health and safety
of home and lot buyers;
WHEREAS, reports of alarming magnitude also show
cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and
condominium sellers and operators, such as failure to
deliver titles to the buyers or titles free from liens and
encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to
different innocent purchasers for value;
WHEREAS, these acts not only undermine the land
and housing program of the government but also
defeat the objectives of the New Society, particularly
the promotion of peace and order and the
enhancement of the economic, social and moral
condition of the Filipino people;
WHEREAS, this state of affairs has rendered it
imperative that the real estate subdivision and
condominium businesses be closely supervised and
regulated, and that penalties be imposed on
fraudulent practices and manipulations committed in
connection therewith.
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby decree
and order:
Title I
TITLE AND DEFINITIONS
Section 1. Title. This Decree shall be known as THE
SUBDIVISION AND CONDOMINIUM BUYERS'
PROTECTIVE DECREE.
Section 2. Definition of Terms When used in this
Decree, the following terms shall, unless the context

otherwise indicates, have the following respective

meanings:
(a) Person. "Person" shall mean a natural or a
juridical person. A juridical person refers to a
business firm whether a corporation,
partnership, cooperative or associations or a
single proprietorship.
(b) Sale or sell. "Sale" or "sell" shall include
every disposition, or attempt to dispose, for a
valuable consideration, of a subdivision lot,
including the building and other improvements
thereof, if any, in a subdivision project or a
condominium unit in a condominium project.
"Sale" and "sell" shall also include a contract
to sell, a contract of purchase and sale, an
exchange, an attempt to sell, an option of sale
or purchase, a solicitation of a sale, or an offer
to sell, directly or by an agent, or by a circular,
letter, advertisement or otherwise.
A privilege given to a member of a
cooperative, corporation, partnership, or any
association and/or the issuance of a certificate
or receipt evidencing or giving the right of
participation in, or right to, any land in
consideration of payment of the membership
fee or dues, shall be deemed a sale within the
meaning of this definition.
(c) Buy and purchase. The "buy" and
"purchase" shall include any contract to buy,
purchase, or otherwise acquire for a valuable
consideration a subdivision lot, including the
building and other improvements, if any, in a
subdivision project or a condominium unit in a
condominium project.
(d) Subdivision project. "Subdivision project"
shall mean a tract or a parcel of land
registered under Act No. 496 which is
partitioned primarily for residential purposes
into individual lots with or without
improvements thereon, and offered to the
public for sale, in cash or in installment terms.
It shall include all residential, commercial,
industrial and recreational areas as well as
open spaces and other community and public
areas in the project.
(e) Subdivision lot. "Subdivision lot" shall
mean any of the lots, whether residential,
commercial, industrial, or recreational, in a
subdivision project.
(f) Complex subdivision plan. "Complex
subdivision plan" shall mean a subdivision

plan of a registered land wherein a street,

passageway or open space is delineated on
the plan.
(g) Condominium project. "Condominium
project" shall mean the entire parcel of real
property divided or to be divided primarily for
residential purposes into condominium units,
including all structures thereon.
(h) Condominium unit. "Condominium unit"
shall mean a part of the condominium project
intended for any type of independent use or
ownership, including one or more rooms or
spaces located in one or more floors (or part
of parts of floors) in a building or buildings and
such accessories as may be appended
thereto.
(i) Owner. "Owner" shall refer to the registered
owner of the land subject of a subdivision or a
condominium project.
(j) Developer. "Developer" shall mean the
person who develops or improves the
subdivision project or condominium project for
and in behalf of the owner thereof.
(k) Dealer. "Dealer" shall mean any person
directly engaged as principal in the business
of buying, selling or exchanging real estate
whether on a full-time or part-time basis.
(l) Broker. "Broker" shall mean any person
who, for commission or other compensation,
undertakes to sell or negotiate the sale of a
real estate belonging to another.
(m) Salesman. "Salesman" shall refer to the
person regularly employed by a broker to
perform, for and in his behalf, any or all
functions of a real estate broker.
(n) Authority. "Authority" shall mean the
National Housing Authority.
Title II
REGISTRATION AND LICENSE TO SELL
Section 3. National Housing Authority The National
Housing Authority shall have exclusive jurisdiction to
regulate the real estate trade and business in
accordance with the provisions of this Decree.
Section 4. Registration of Projects The registered
owner of a parcel of land who wishes to convert the
same into a subdivision project shall submit his

subdivision plan to the Authority which shall act upon

and approve the same, upon a finding that the plan
complies with the Subdivision Standards' and
Regulations enforceable at the time the plan is
submitted. The same procedure shall be followed in
the case of a plan for a condominium project except
that, in addition, said Authority shall act upon and
approve the plan with respect to the building or
buildings included in the condominium project in
accordance with the National Building Code (R.A. No.
6541).
The subdivision plan, as so approved, shall then be
submitted to the Director of Lands for approval in
accordance with the procedure prescribed in Section
44 of the Land Registration Act (Act No. 496, as
amended by R.A. No. 440): Provided, that it case of
complex subdivision plans, court approval shall no
longer be required. The condominium plan as likewise
so approved, shall be submitted to the Register of
Deeds of the province or city in which the property lies
and the same shall be acted upon subject to the
conditions and in accordance with the procedure
prescribed in Section 4 of the Condominium Act (R.A.
No. 4726).
The owner or the real estate dealer interested in the
sale of lots or units, respectively, in such subdivision
project or condominium project shall register the
project with the Authority by filing therewith a sworn
registration statement containing the following
information:
(a) Name of the owner;
(b) The location of the owner's principal
business office, and if the owner is a nonresident Filipino, the name and address of his
agent or representative in the Philippines is
authorized to receive notice;
(c) The names and addresses of all the
directors and officers of the business firm, if
the owner be a corporation, association, trust,
or other entity, and of all the partners, if it be a
partnership;
(d) The general character of the business
actually transacted or to be transacted by the
owner; and
(e) A statement of the capitalization of the
owner, including the authorized and
outstanding amounts of its capital stock and
the proportion thereof which is paid-up.
The following documents shall be attached to the
registration statement:

(a) A copy of the subdivision plan or

condominium plan as approved in accordance
with the first and second paragraphs of this
section.
(b) A copy of any circular, prospectus,
brochure, advertisement, letter, or
communication to be used for the public
offering of the subdivision lots or condominium
units;
(c) In case of a business firm, a balance sheet
showing the amount and general character of
its assets and liabilities and a copy of its
articles of incorporation or articles of
partnership or association, as the case may
be, with all the amendments thereof and
existing by-laws or instruments corresponding
thereto.
(d) A title to the property which is free from all
liens and encumbrances: Provided, however,
that in case any subdivision lot or
condominium unit is mortgaged, it is sufficient
if the instrument of mortgage contains a
stipulation that the mortgagee shall release
the mortgage on any subdivision lot or
condominium unit as soon as the full purchase
price for the same is paid by the buyer.
The person filing the registration statement shall pay
the registration fees prescribed therefor by the
Authority.
Thereupon, the Authority shall immediately cause to
be published a notice of the filing of the registration
statement at the expense of the applicant-owner or
dealer, in two newspapers general circulation, one
published in English and another in Pilipino, once a
week for two consecutive weeks, reciting that a
registration statement for the sale of subdivision lots
or condominium units has been filed in the National
Housing Authority; that the aforesaid registration
statement, as well as the papers attached thereto, are
open to inspection during business hours by
interested parties, under such regulations as the
Authority may impose; and that copies thereof shall
be furnished to any party upon payment of the proper
fees.
The subdivision project of the condominium project
shall be deemed registered upon completion of the
above publication requirement. The fact of such
registration shall be evidenced by a registration
certificate to be issued to the applicant-owner or
dealer.

Section 5. License to sell. Such owner or dealer to

whom has been issued a registration certificate shall
not, however, be authorized to sell any subdivision lot
or condominium unit in the registered project unless
he shall have first obtained a license to sell the project
within two weeks from the registration of such project.
The Authority, upon proper application therefor, shall
issue to such owner or dealer of a registered project a
license to sell the project if, after an examination of
the registration statement filed by said owner or
dealer and all the pertinent documents attached
thereto, he is convinced that the owner or dealer is of
good repute, that his business is financially stable,
and that the proposed sale of the subdivision lots or
condominium units to the public would not be
fraudulent.
Section 6. Performance Bond. No license to sell
subdivision lots or condominium units shall be issued
by the Authority under Section 5 of this Decree unless
the owner or dealer shall have filed an adequate
performance bond approved by said Authority to
guarantee the construction and maintenance of the
roads, gutters, drainage, sewerage, water system,
lighting systems, and full development of the
subdivision project or the condominium project and
the compliance by the owner or dealer with the
applicable laws and rules and regulations.
The performance bond shall be executed in favor of
the Republic of the Philippines and shall authorize the
Authority to use the proceeds thereof for the purposes
of its undertaking in case of forfeiture as provided in
this Decree.
Section 7. Exempt transactions. A license to sell and
performance bond shall not be required in any of the
following transactions:
(a) Sale of a subdivision lot resulting from the
partition of land among co-owners and coheirs.
(b) Sale or transfer of a subdivision lot by the
original purchaser thereof and any
subsequent sale of the same lot.
(c) Sale of a subdivision lot or a condominium
unit by or for the account of a mortgagee in
the ordinary course of business when
necessary to liquidate a bona fide debt.
Section 8. Suspension of license to sell. Upon
verified complaint by a buyer of a subdivision lot or a
condominium unit in any interested party, the
Authority may, in its discretion, immediately suspend
the owner's or dealer's license to sell pending

investigation and hearing of the case as provided in

Section 13 hereof.
The Authority may motu proprio suspend the license
to sell if, in its opinion, any information in the
registration statement filed by the owner or dealer is
or has become misleading, incorrect, inadequate or
incomplete or the sale or offering for a sale of the
subdivision or condominium project may work or tend
to work a fraud upon prospective buyers.
The suspension order may be lifted if, after notice and
hearing, the Authority is convinced that the
registration statement is accurate or that any
deficiency therein has been corrected or
supplemented or that the sale to the public of the
subdivision or condominium project will neither be
fraudulent not result in fraud. It shall also be lifted
upon dismissal of the complaint for lack of legal basis.
Until the final entry of an order of suspension, the
suspension of the right to sell the project, though
binding upon all persons notified thereof, shall be
deemed confidential unless it shall appear that the
order of suspension has in the meantime been
violated.
Section 9. Revocation of registration certificate and
license to sell. The Authority may, motu proprio or
upon verified complaint filed by a buyer of a
subdivision lot or condominium unit, revoke the
registration of any subdivision project or condominium
project and the license to sell any subdivision lot or
condominium unit in said project by issuing an order
to this effect, with his findings in respect thereto, if
upon examination into the affairs of the owner or
dealer during a hearing as provided for in Section 14
hereof, if shall appear there is satisfactory evidence
that the said owner or dealer:
(a) Is insolvent; or
(b) has violated any of the provisions of this
Decree or any applicable rule or regulation of
the Authority, or any undertaking of his/its
performance bond; or
(c) Has been or is engaged or is about to
engage in fraudulent transactions; or
(d) Has made any misrepresentation in any
prospectus, brochure, circular or other
literature about the subdivision project or
condominium project that has been distributed
to prospective buyers; or
(e) Is of bad business repute; or

(f) Does not conduct his business in

accordance with law or sound business
principles.
Where the owner or dealer is a partnership or
corporation or an unincorporated association, it shall
be sufficient cause for cancellation of its registration
certificate and its license to sell, if any member of
such partnership or any officer or director of such
corporation or association has been guilty of any act
or omission which would be cause for refusing or
revoking the registration of an individual dealer,
broker or salesman as provided in Section 11 hereof.
Section 10. Registers of subdivision lots and
condominium units. A record of subdivision lots and
condominium units shall be kept in the Authority
wherein shall be entered all orders of the Authority
affecting the condition or status thereof. The registers
of subdivision lots and condominium units shall be
open to public inspection subject to such reasonable
rules as the Authority may prescribe.
Title III
DEALERS, BROKERS AND SALESMEN
Section 11. Registration of dealers, brokers and
salesmen. No real estate dealer, broker or salesman
shall engage in the business of selling subdivision lots
or condominium units unless he has registered
himself with the Authority in accordance with the
provisions of this section.
If the Authority shall find that the applicant is of good
repute and has complied with the applicable rules of
the Authority, including the payment of the prescribed
fee, he shall register such applicant as a dealer,
broker or salesman upon filing a bond, or other
security in lieu thereof, in such sum as may be fixed
by the Authority conditioned upon his faithful
compliance with the provisions of this Decree:
Provided, that the registration of a salesman shall
cease upon the termination of his employment with a
dealer or broker.
Every registration under this section shall expire on
the thirty-first day of December of each year. Renewal
of registration for the succeeding year shall be
granted upon written application therefor made not
less than thirty nor more than sixty days before the
first day of the ensuing year and upon payment of the
prescribed fee, without the necessity of filing further
statements or information, unless specifically required
by the Authority. All applications filed beyond said
period shall be treated as original applications.
The names and addresses of all persons registered
as dealers, brokers, or salesmen shall be recorded in

a Register of Brokers, Dealers and Salesmen kept in

the Authority which shall be open to public inspection.
Section 12. Revocation of registration as dealers,
brokers or salesmen. Registration under the
preceding section may be refused or any registration
granted thereunder, revoked by the Authority if, after
reasonable notice and hearing, it shall determine that
such applicant or registrant:
1. Has violated any provision of this Decree or
any rule or regulation made hereunder; or
2. Has made a material false statement in his
application for registration; or
3. Has been guilty of a fraudulent act in
connection with any sale of a subdivision lot or
condominium unit; or
4. Has demonstrated his unworthiness to
transact the business of dealer, broker, or
salesman, as the case may be.
In case of charges against a salesman, notice thereof
shall also be given the broker or dealer employing
such salesman.
Pending hearing of the case, the Authority shall have
the power to order the suspension of the dealer's,
broker's, of salesman's registration; provided, that
such order shall state the cause for the suspension.
The suspension or revocation of the registration of a
dealer or broker shall carry with it all the suspension
or revocation of the registrations of all his salesmen.
Title IV
PROCEDURE FOR REVOCATION OF
REGISTRATION CERTIFICATE
Section 13. Hearing. In the hearing for determining
the existence of any ground or grounds for the
suspension and/or revocation of registration certificate
and license to sell as provided in Section 8 and 9
hereof, the following shall be complied with:
(a) Notice. No such hearing shall proceed
unless the respondent is furnished with a copy
of the complaint against him or is notified in
writing of the purpose of such hearing.
(b) Venue. The hearing may be held before
the officer or officers designated by the
Authority on the date and place specified in
the notice.

(c) Nature of proceeding. The proceedings

shall be non-litigious and summary in nature
without regard to legal technicalities obtaining
in courts of law. The Rules of court shall not
apply in said hearing except by analogy or in a
suppletory character and whenever
practicable and convenient.
(d) Power incidental to the hearing. For the
purpose of the hearing or other proceeding
under this Decree, the officer or officers
designated to hear the complaint shall have
the power to administer oaths, subpoena
witnesses, conduct ocular inspections, take
depositions, and require the production of any
book, paper, correspondence, memorandum,
or other record which are deemed relevant or
material to the inquiry.
Section 14. Contempt.
(a) Direct contempt. The officer or officers
designated by the Authority to hear the
complaint may summarily adjudge in direct
contempt any person guilty of misbehavior in
the presence of or so near the said hearing
officials as to obstruct or interrupt the
proceedings before the same or of refusal to
be sworn or to answer as a witness or to
subscribe an affidavit or deposition when
lawfully required to do so. The person found
guilty of direct contempt under this section
shall be punished by a fine not exceeding Fifty
(P50.00) Pesos or imprisonment not
exceeding five (5) days, or both.
(b) Indirect contempt. The officer or officers
designated to hear the complaint may also
adjudge any person in indirect contempt on
grounds and in the manner prescribed in Rule
71 of the Revised Rules of Court.
Section 15. Decision. The case shall be decided
within thirty (30) days from the time the same is
submitted for decision. The Decision may order the
revocation of the registration of the subdivision or
condominium project, the suspension, cancellation, or
revocation of the license to sell and/or forfeiture, in
whole or in part, of the performance bond mentioned
in Section 6 hereof. In case forfeiture of the bond is
ordered, the Decision may direct the provincial or city
engineer to undertake or cause the construction of
roads and of other requirements for the subdivision or
condominium as stipulated in the bond, chargeable to
the amount forfeited. Such decision shall be
immediately executory and shall become final after
the lapse of 15 days from the date of receipt of the
Decision.

Section 16. Cease and Desist Order. Whenever it

shall appear to the Authority that any person is
engaged or about to engage in any act or practice
which constitutes or will constitute a violation of the
provisions of this Decree, or of any rule or regulation
thereunder, it may, upon due notice and hearing as
provided in Section 13 hereof, issue a cease and
desist order to enjoin such act or practices.
Section 17. Registration. All contracts to sell, deeds
of sale and other similar instruments relative to the
sale or conveyance of the subdivision lots and
condominium units, whether or not the purchase price
is paid in full, shall be registered by the seller in the
Office of the Register of Deeds of the province or city
where the property is situated.
Whenever a subdivision plan duly approved in
accordance with Section 4 hereof, together with the
corresponding owner's duplicate certificate of title, is
presented to the Register of Deeds for registration,
the Register of Deeds shall register the same in
accordance with the provisions of the Land
Registration Act, as amended: Provided, however,
that it there is a street, passageway or required open
space delineated on a complex subdivision plan
hereafter approved and as defined in this Decree, the
Register of Deeds shall annotate on the new
certificate of title covering the street, passageway or
open space, a memorandum to the effect that except
by way of donation in favor of a city or municipality, no
portion of any street, passageway, or open space so
delineated on the plan shall be closed or otherwise
disposed of by the registered owner without the
requisite approval as provided under Section 22 of
this Decree.
Section 18. Mortgages. No mortgage on any unit or
lot shall be made by the owner or developer without
prior written approval of the Authority. Such approval
shall not be granted unless it is shown that the
proceeds of the mortgage loan shall be used for the
development of the condominium or subdivision
project and effective measures have been provided to
ensure such utilization. The loan value of each lot or
unit covered by the mortgage shall be determined and
the buyer thereof, if any, shall be notified before the
release of the loan. The buyer may, at his option, pay
his installment for the lot or unit directly to the
mortgagee who shall apply the payments to the
corresponding mortgage indebtedness secured by the
particular lot or unit being paid for, with a view to
enabling said buyer to obtain title over the lot or unit
promptly after full payment thereto;
Section 19. Advertisements. Advertisements that
may be made by the owner or developer through
newspaper, radio, television, leaflets, circulars or any

other form about the subdivision or the condominium

or its operations or activities must reflect the real facts
and must be presented in such manner that will not
tend to mislead or deceive the public.
The owner or developer shall answerable and liable
for the facilities, improvements, infrastructures or
other forms of development represented or promised
in brochures, advertisements and other sales
propaganda disseminated by the owner or developer
or his agents and the same shall form part of the
sales warranties enforceable against said owner or
developer, jointly and severally. Failure to comply with
these warranties shall also be punishable in
accordance with the penalties provided for in this
Decree.
Section 20. Time of Completion. Every owner or
developer shall construct and provide the facilities,
improvements, infrastructures and other forms of
development, including water supply and lighting
facilities, which are offered and indicated in the
approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in
any form of advertisement, within one year from the
date of the issuance of the license for the subdivision
or condominium project or such other period of time
as may be fixed by the Authority.
Section 21. Sales Prior to Decree. In cases of
subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it
shall be incumbent upon the owner or developer of
the subdivision or condominium project to complete
compliance with his or its obligations as provided in
the preceding section within two years from the date
of this Decree unless otherwise extended by the
Authority or unless an adequate performance bond is
filed in accordance with Section 6 hereof.
Failure of the owner or developer to comply with the
obligations under this and the preceding provisions
shall constitute a violation punishable under Sections
38 and 39 of this Decree.
Section 22. Alteration of Plans. No owner or
developer shall change or alter the roads, open
spaces, infrastructures, facilities for public use and/or
other form of subdivision development as contained in
the approved subdivision plan and/or represented in
its advertisements, without the permission of the
Authority and the written conformity or consent of the
duly organized homeowners association, or in the
absence of the latter, by the majority of the lot buyers
in the subdivision.
Section 23. Non-Forfeiture of Payments. No
installment payment made by a buyer in a subdivision

or condominium project for the lot or unit he

contracted to buy shall be forfeited in favor of the
owner or developer when the buyer, after due notice
to the owner or developer, desists from further
payment due to the failure of the owner or developer
to develop the subdivision or condominium project
according to the approved plans and within the time
limit for complying with the same. Such buyer may, at
his option, be reimbursed the total amount paid
including amortization interests but excluding
delinquency interests, with interest thereon at the
legal rate.
Section 24. Failure to pay installments. The rights of
the buyer in the event of this failure to pay the
installments due for reasons other than the failure of
the owner or developer to develop the project shall be
governed by Republic Act No. 6552.
Where the transaction or contract was entered into
prior to the effectivity of Republic Act No. 6552 on
August 26, 1972, the defaulting buyer shall be entitled
to the corresponding refund based on the installments
paid after the effectivity of the law in the absence of
any provision in the contract to the contrary.
Section 25. Issuance of Title. The owner or developer
shall deliver the title of the lot or unit to the buyer
upon full payment of the lot or unit. No fee, except
those required for the registration of the deed of sale
in the Registry of Deeds, shall be collected for the
issuance of such title. In the event a mortgage over
the lot or unit is outstanding at the time of the
issuance of the title to the buyer, the owner or
developer shall redeem the mortgage or the
corresponding portion thereof within six months from
such issuance in order that the title over any fully paid
lot or unit may be secured and delivered to the buyer
in accordance herewith.
Section 26. Realty Tax. Real estate tax and
assessment on a lot or unit shall de paid by the owner
or developer without recourse to the buyer for as long
as the title has not passed the buyer; Provided,
however, that if the buyer has actually taken
possession of and occupied the lot or unit, he shall be
liable to the owner or developer for such tax and
assessment effective the year following such taking of
possession and occupancy.
Section 27. Other Charges. No owner or developer
shall levy upon any lot or buyer a fee for an alleged
community benefit. Fees to finance services for
common comfort, security and sanitation may be
collected only by a properly organized homeowners
association and only with the consent of a majority of
the lot or unit buyers actually residing in the
subdivision or condominium project.

Section 28. Access to Public Offices in the

Subdivisions. No owner or developer shall deny any
person free access to any government office or public
establishment located within the subdivision or which
may be reached only by passing through the
subdivision.
Section 29. Right of Way to Public Road. The owner
or developer of a subdivision without access to any
existing public road or street must secure a right of
way to a public road or street and such right of way
must be developed and maintained according to the
requirement of the government and authorities
concerned.
Section 30. Organization of Homeowners
Association. The owner or developer of a subdivision
project or condominium project shall initiate the
organization of a homeowners association among the
buyers and residents of the projects for the purpose of
promoting and protecting their mutual interest and
assist in their community development.
Section 31. Donations of roads and open spaces to
local government. The registered owner or developer
of the subdivision or condominium project, upon
completion of the development of said project may, at
his option, convey by way of donation the roads and
open spaces found within the project to the city or
municipality wherein the project is located. Upon
acceptance of the donation by the city or municipality
concerned, no portion of the area donated shall
thereafter be converted to any other purpose or
purposes unless after hearing, the proposed
conversion is approved by the Authority.
Section 32. Phases of Subdivision. For purposes of
complying with the provisions of this Decree, the
owner or developer may divide the development and
sale of the subdivision into phases, each phase to
cover not less than ten hectares. The requirement
imposed by this Decree on the subdivision as a whole
shall be deemed imposed on each phase.
Section 33. Nullity of waivers. Any condition,
stipulation, or provision in contract of sale whereby
any person waives compliance with any provision of
this Decree or of any rule or regulation issued
thereunder shall be void.
Section 34. Visitorial powers. This Authority, through
its duly authorized representative may, at any time,
make an examination into the business affairs,
administration, and condition of any person,
corporation, partnership, cooperative, or association
engaged in the business of selling subdivision lots
and condominium units. For this purpose, the official
authorized so to do shall have the authority to

examine under oath the directors, officers,

stockholders or members of any corporation,
partnership, association, cooperative or other persons
associated or connected with the business and to
issue subpoena or subpoena duces tecum in relation
to any investigation that may arise therefrom.
The Authority may also authorize the Provincial, City
or Municipal Engineer, as the case may be, to
conduct an ocular inspection of the project to
determine whether the development of said project
conforms to the standards and specifications
prescribed by the government.
The books, papers, letters, and other documents
belonging to the person or entities herein mentioned
shall be open to inspection by the Authority or its duly
authorized representative.
Section 35. Take-over Development. The Authority,
may take over or cause the development and
completion of the subdivision or condominium project
at the expenses of the owner or developer, jointly and
severally, in cases where the owner or developer has
refused or failed to develop or complete the
development of the project as provided for in this
Decree.
The Authority may, after such take-over, demand,
collect and receive from the buyers the installment
payments due on the lots, which shall be utilized for
the development of the subdivision.
Section 36. Rules and Regulations. The Authority
shall issue the necessary standards, rules and
regulations for the effective implementation of the
provisions of this Decree. Such standards, rules and
regulations shall take effect immediately after their
publication three times a week for two consecutive
weeks in any newspaper of general circulation.
Section 37. Deputization of law enforcement
agencies. The Authority may deputize the Philippine
Constabulary or any law enforcement agency in the
execution of its final orders, rulings or decisions.
Section 38. Administrative Fines. The Authority may
prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of this
Decree or of any rule or regulation thereunder. Fines
shall be payable to the Authority and enforceable
through writs of execution in accordance with the
provisions of the Rules of Court.
Section 39. Penalties. Any person who shall violate
any of the provisions of this Decree and/or any rule or
regulation that may be issued pursuant to this Decree
shall, upon conviction, be punished by a fine of not

more than twenty thousand (P20,000.00) pesos

and/or imprisonment of not more than ten years:
Provided, That in the case of corporations,
partnership, cooperatives, or associations, the
President, Manager or Administrator or the person
who has charge of the administration of the business
shall be criminally responsible for any violation of this
Decree and/or the rules and regulations promulgated
pursuant thereto.
Section 40. Liability of controlling persons. Every
person who directly or indirectly controls any person
liable under any provision of this Decree or of any rule
or regulation issued thereunder shall be liable jointly
and severally with and to the same extent as such
controlled person unless the controlling person acted
in good faith and did not directly or indirectly induce
the act or acts constituting the violation or cause of
action.
Section 41. Other remedies. The rights and remedies
provided in this Decree shall be in addition to any and
all other rights and remedies that may be available
under existing laws.
Section 42. Repealing clause. All laws, executive
orders, rules and regulations or part thereof
inconsistent with the provisions of this Decree are
hereby repealed or modified accordingly.
Section 43. Effectivity. This Decree shall take effect
upon its approval.
Done in the City of Manila, this 12th day of July, in the
year of Our Lord, nineteen hundred and seventy-six.

REPUBLIC ACT NO. 4726 June 18, 1966

AN ACT TO DEFINE CONDOMINIUM, ESTABLISH
REQUIREMENTS FOR ITS CREATION, AND
GOVERN ITS INCIDENTS.
Sec. 1. The short title of this Act shall be "The
Condominium Act".
Sec. 2. A condominium is an interest in real property
consisting of separate interest in a unit in a
residential, industrial or commercial building and an
undivided interest in common, directly or indirectly, in
the land on which it is located and in other common
areas of the building. A condominium may include, in
addition, a separate interest in other portions of such
real property. Title to the common areas, including the
land, or the appurtenant interests in such areas, may
be held by a corporation specially formed for the
purpose (hereinafter known as the "condominium
corporation") in which the holders of separate interest
shall automatically be members or shareholders, to
the exclusion of others, in proportion to the
appurtenant interest of their respective units in the
common areas.
The real right in condominium may be ownership or
any other interest in real property recognized by law,
on property in the Civil Code and other pertinent laws.
Sec. 3. As used in this Act, unless the context
otherwise requires:
(a) "Condominium" means a condominium as defined
in the next preceding section.
(b) "Unit" means a part of the condominium project
intended for any type of independent use or
ownership, including one or more rooms or spaces
located in one or more floors (or part or parts of
floors) in a building or buildings and such accessories
as may be appended thereto.
(c) "Project" means the entire parcel of real property
divided or to be divided in condominiums, including all
structures thereon,
(d) "Common areas" means the entire project
excepting all units separately granted or held or
reserved.
(e) "To divide" real property means to divide the
ownership thereof or other interest therein by
conveying one or more condominiums therein but less
than the whole thereof.

Sec. 4. The provisions of this Act shall apply to

property divided or to be divided into condominiums
only if there shall be recorded in the Register of
Deeds of the province or city in which the property lies
and duly annotated in the corresponding certificate of
title of the land, if the latter had been patented or
registered under either the Land Registration or
Cadastral Acts, an enabling or master deed which
shall contain, among others, the following:
(a) Description of the land on which the building or
buildings and improvements are or are to be located;
(b) Description of the building or buildings, stating the
number of stories and basements, the number of units
and their accessories, if any;
(c) Description of the common areas and facilities;
(d) A statement of the exact nature of the interest
acquired or to be acquired by the purchaser in the
separate units and in the common areas of the
condominium project. Where title to or the
appurtenant interests in the common areas is or is to
be held by a condominium corporation, a statement to
this effect shall be included;
(e) Statement of the purposes for which the building
or buildings and each of the units are intended or
restricted as to use;
(f) A certificate of the registered owner of the property,
if he is other than those executing the master deed,
as well as of all registered holders of any lien or
encumbrance on the property, that they consent to
the registration of the deed;
(g) The following plans shall be appended to the deed
as integral parts thereof:
(1) A survey plan of the land included in the project,
unless a survey plan of the same property had
previously bee filed in said office;
(2) A diagrammatic floor plan of the building or
buildings in the project, in sufficient detail to identify
each unit, its relative location and approximate
dimensions;
(h) Any reasonable restriction not contrary to law,
morals or public policy regarding the right of any
condominium owner to alienate or dispose of his
condominium.
The enabling or master deed may be amended or
revoked upon registration of an instrument executed
by the registered owner or owners of the property and

consented to by all registered holders of any lien or

encumbrance on the land or building or portion
thereof. The term "registered owner" shall include the
registered owners of condominiums in the project.
Until registration of a revocation, the provisions of this
Act shall continue to apply to such property.
Sec. 5. Any transfer or conveyance of a unit or an
apartment, office or store or other space therein, shall
include the transfer or conveyance of the undivided
interests in the common areas or, in a proper case,
the membership or shareholdings in the condominium
corporation: Provided, however, That where the
common areas in the condominium project are owned
by the owners of separate units as co-owners thereof,
no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens, or
corporations at least sixty percent of the capital stock
of which belong to Filipino citizens, except in cases of
hereditary succession. Where the common areas in a
condominium project are held by a corporation, no
transfer or conveyance of a unit shall be valid if the
concomitant transfer of the appurtenant membership
or stockholding in the corporation will cause the alien
interest in such corporation to exceed the limits
imposed by existing laws.
Sec. 6. Unless otherwise expressly provided in the
enabling or master deed or the declaration of
restrictions, the incidents of a condominium grant are
as follows:
(a) The boundary of the unit granted are the interior
surfaces of the perimeter walls, floors, ceilings,
windows and doors thereof. The following are not part
of the unit bearing walls, columns, floors, roofs,
foundations and other common structural elements of
the building; lobbies, stairways, hallways, and other
areas of common use, elevator equipment and shafts,
central heating, central refrigeration and central airconditioning equipment, reservoirs, tanks, pumps and
other central services and facilities, pipes, ducts,
flues, chutes, conduits, wires and other utility
installations, wherever located, except the outlets
thereof when located within the unit.
(b) There shall pass with the unit, as an appurtenance
thereof, an exclusive easement for the use of the air
space encompassed by the boundaries of the unit as
it exists at any particular time and as the unit may
lawfully be altered or reconstructed from time to time.
Such easement shall be automatically terminated in
any air space upon destruction of the unit as to render
it untenantable.
(c) Unless otherwise, provided, the common areas
are held in common by the holders of units, in equal
shares, one for each unit.

(d) A non-exclusive easement for ingress, egress and

support through the common areas is appurtenant to
each unit and the common areas are subject to such
easements.
(e) Each condominium owner shall have the exclusive
right to paint, repaint, tile, wax, paper or otherwise
refinish and decorate the inner surfaces of the walls,
ceilings, floors, windows and doors bounding his own
unit.
(f) Each condominium owner shall have the exclusive
right to mortgage, pledge or encumber his
condominium and to have the same appraised
independently of the other condominiums but any
obligation incurred by such condominium owner is
personal to him.
(g) Each condominium owner has also the absolute
right to sell or dispose of his condominium unless the
master deed contains a requirement that the property
be first offered to the condominium owners within a
reasonable period of time before the same is offered
to outside parties;
Sec. 7. Except as provided in the following section,
the common areas shall remain undivided, and there
shall be no judicial partition thereof.
Sec. 8. Where several persons own condominiums in
a condominium project, an action may be brought by
one or more such persons for partition thereof by sale
of the entire project, as if the owners of all of the
condominiums in such project were co-owners of the
entire project in the same proportion as their interests
in the common areas:Provided, however, That a
partition shall be made only upon a showing:
(a) That three years after damage or destruction to
the project which renders material part thereof unit for
its use prior thereto, the project has not been rebuilt
or repaired substantially to its state prior to its
damage or destruction, or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that condominium owners holding in
aggregate more than thirty percent interest in the
common areas are opposed to repair or restoration of
the project; or
(c) That the project has been in existence in excess of
fifty years, that it is obsolete and uneconomic, and
that condominium owners holding in aggregate more
than fifty percent interest in the common areas are
opposed to repair or restoration or remodeling or
modernizing of the project; or

(d) That the project or a material part thereof has

been condemned or expropriated and that the project
is no longer viable, or that the condominium owners
holding in aggregate more than seventy percent
interest in the common areas are opposed to
continuation of the condominium regime after
expropriation or condemnation of a material portion
thereof; or

(4) For purchase of materials, supplies and the like

needed by the common areas;

(e) That the conditions for such partition by sale set

forth in the declaration of restrictions, duly registered
in accordance with the terms of this Act, have been
met.

(6) For reconstruction of any portion or portions of any

damage to or destruction of the project;

Sec. 9. The owner of a project shall, prior to the

conveyance of any condominium therein, register a
declaration of restrictions relating to such project,
which restrictions shall constitute a lien upon each
condominium in the project, and shall insure to and
bind all condominium owners in the project. Such
liens, unless otherwise provided, may be enforced by
any condominium owner in the project or by the
management body of such project. The Register of
Deeds shall enter and annotate the declaration of
restrictions upon the certificate of title covering the
land included within the project, if the land is patented
or registered under the Land Registration or Cadastral
Acts.

(8) For entry by its officers and agents into any unit
when necessary in connection with the maintenance
or construction for which such body is responsible;

The declaration of restrictions shall provide for the

management of the project by anyone of the following
management bodies: a condominium corporation, an
association of the condominium owners, a board of
governors elected by condominium owners, or a
management agent elected by the owners or by the
board named in the declaration. It shall also provide
for voting majorities quorums, notices, meeting date,
and other rules governing such body or bodies.
Such declaration of restrictions, among other things,
may also provide:
(a) As to any such management body;
(1) For the powers thereof, including power to enforce
the provisions of the declarations of restrictions;
(2) For maintenance of insurance policies, insuring
condominium owners against loss by fire, casualty,
liability, workmen's compensation and other insurable
risks, and for bonding of the members of any
management body;
(3) Provisions for maintenance, utility, gardening and
other services benefiting the common areas, for the
employment of personnel necessary for the operation
of the building, and legal, accounting and other
professional and technical services;

(5) For payment of taxes and special assessments

which would be a lien upon the entire project or
common areas, and for discharge of any lien or
encumbrance levied against the entire project or the
common areas;

(7) The manner for delegation of its powers;

(9) For a power of attorney to the management body

to sell the entire project for the benefit of all of the
owners thereof when partition of the project may be
authorized under Section 8 of this Act, which said
power shall be binding upon all of the condominium
owners regardless of whether they assume the
obligations of the restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than a
majority in interest of the owners is obtained.
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet authorized
expenditures, each condominium unit to be assessed
separately for its share of such expenses in
proportion (unless otherwise provided) to its owners
fractional interest in any common areas;
(e) For the subordination of the liens securing such
assessments to other liens either generally or
specifically described;
(f) For conditions, other than those provided for in
Sections eight and thirteen of this Act, upon which
partition of the project and dissolution of the
condominium corporation may be made. Such right to
partition or dissolution may be conditioned upon
failure of the condominium owners to rebuild within a
certain period or upon specified inadequacy of
insurance proceeds, or upon specified percentage of
damage to the building, or upon a decision of an
arbitrator, or upon any other reasonable condition.
Sec. 10. Whenever the common areas in a
condominium project are held by a condominium
corporation, such corporation shall constitute the

management body of the project. The corporate

purposes of such a corporation shall be limited to the
holding of the common areas, either in ownership or
any other interest in real property recognized by law,
to the management of the project, and to such other
purposes as may be necessary, incidental or
convenient to the accomplishment of said purposes.
The articles of incorporation or by-laws of the
corporation shall not contain any provision contrary to
or inconsistent with the provisions of this Act, the
enabling or master deed, or the declaration of
restrictions of the project. Membership in a
condominium corporation, regardless of whether it is
a stock or non-stock corporation, shall not be
transferable separately from the condominium unit of
which it is an appurtenance. When a member or
stockholder ceases to own a unit in the project in
which the condominium corporation owns or holds the
common areas, he shall automatically cease to be a
member or stockholder of the condominium
corporation.
Sec. 11. The term of a condominium corporation shall
be co-terminus with the duration of the condominium
project, the provisions of the Corporation Law to the
contrary notwithstanding.
Sec. 12. In case of involuntary dissolution of a
condominium corporation for any of the causes
provided by law, the common areas owned or held by
the corporation shall, by way of liquidation, be
transferred pro-indiviso and in proportion to their
interest in the corporation to the members or
stockholders thereof, subject to the superior rights of
the corporation creditors. Such transfer or
conveyance shall be deemed to be a full liquidation of
the interest of such members or stockholders in the
corporation. After such transfer or conveyance, the
provisions of this Act governing undivided coownership of, or undivided interest in, the common
areas in condominium projects shall fully apply.
Sec. 13. Until the enabling or the master deed of the
project in which the condominium corporation owns or
holds the common area is revoked, the corporation
shall not be voluntarily dissolved through an action for
dissolution under Rule 104 of the Rules of Court
except upon a showing:
(a) That three years after damage or destruction to
the project in which the corporation owns or holds the
common areas, which damage or destruction renders
a material part thereof unfit for its use prior thereto,
the project has not been rebuilt or repaired
substantially to its state prior to its damage or
destruction; or

(b) That damage or destruction to the project has

rendered one-half or more of the units therein
untenantable and that more than thirty percent of the
members of the corporation, if non-stock, or the
shareholders representing more than thirty percent of
the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or
reconstruction of the project, or
(c) That the project has been in existence in excess of
fifty years, that it is obsolete and uneconomical, and
that more than fifty percent of the members of the
corporation, if non-stock, or the stockholders
representing more than fifty percent of the capital
stock entitled to vote, if a stock corporation, are
opposed to the repair or restoration or remodeling or
modernizing of the project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the project
is no longer viable, or that the members holding in
aggregate more than seventy percent interest in the
corporation, if non-stock, or the stockholders
representing more than seventy percent of the capital
stock entitled to vote, if a stock corporation, are
opposed to the continuation of the condominium
regime after expropriation or condemnation of a
material portion thereof; or
(e) That the conditions for such a dissolution set forth
in the declaration of restrictions of the project in which
the corporation owns of holds the common areas,
have been met.
Sec. 14. The condominium corporation may also be
dissolved by the affirmative vote of all the
stockholders or members thereof at a general or
special meeting duly called for the purpose: Provided,
That all the requirements of Section sixty-two of the
Corporation Law are complied with.
Sec. 15. Unless otherwise provided for in the
declaration of restrictions upon voluntary dissolution
of a condominium corporation in accordance with the
provisions of Sections thirteen and fourteen of this
Act, the corporation shall be deemed to hold a power
of attorney from all the members or stockholders to
sell and dispose of their separate interests in the
project and liquidation of the corporation shall be
effected by a sale of the entire project as if the
corporation owned the whole thereof, subject to the
rights of the corporate and of individual condominium
creditors.
Sec. 16. A condominium corporation shall not, during
its existence, sell, exchange, lease or otherwise
dispose of the common areas owned or held by it in

the condominium project unless authorized by the

affirmative vote of all the stockholders or members.
Sec. 17. Any provision of the Corporation Law to the
contrary notwithstanding, the by-laws of a
condominium corporation shall provide that a
stockholder or member shall not be entitled to
demand payment of his shares or interest in those
cases where such right is granted under the
Corporation Law unless he consents to sell his
separate interest in the project to the corporation or to
any purchaser of the corporation's choice who shall
also buy from the corporation the dissenting member
or stockholder's interest. In case of disagreement as
to price, the procedure set forth in the appropriate
provision of the Corporation Law for valuation of
shares shall be followed. The corporation shall have
two years within which to pay for the shares or furnish
a purchaser of its choice from the time of award. All
expenses incurred in the liquidation of the interest of
the dissenting member or stockholder shall be borne
by him.
Sec. 18. Upon registration of an instrument conveying
a condominium, the Register of Deeds shall, upon
payment of the proper fees, enter and annotate the
conveyance on the certificate of title covering the land
included within the project and the transferee shall be
entitled to the issuance of a "condominium owner's"
copy of the pertinent portion of such certificate of title.
Said "condominium owner's" copy need not reproduce
the ownership status or series of transactions in force
or annotated with respect to other condominiums in
the project. A copy of the description of the land, a
brief description of the condominium conveyed, name
and personal circumstances of the condominium
owner would be sufficient for purposes of the
"condominium owner's" copy of the certificate of title.
No conveyance of condominiums or part thereof,
subsequent to the original conveyance thereof from
the owner of the project, shall be registered unless
accompanied by a certificate of the management
body of the project that such conveyance is in
accordance with the provisions of the declaration of
restrictions of such project.
In cases of condominium projects registered under
the provisions of the Spanish Mortgage Law or Act
3344, as amended, the registration of the deed of
conveyance of a condominium shall be sufficient if the
Register of Deeds shall keep the original or signed
copy thereof, together with the certificate of the
management body of the project, and return a copy of
the deed of conveyance to the condominium owner
duly acknowledge and stamped by the Register of
Deeds in the same manner as in the case of
registration of conveyances of real property under
said laws.

Sec. 19. Where the enabling or master deed provides

that the land included within a condominium project
are to be owned in common by the condominium
owners therein, the Register of Deeds may, at the
request of all the condominium owners and upon
surrender of all their "condominium owner's" copies,
cancel the certificates of title of the property and issue
a new one in the name of said condominium owners
as pro-indiviso co-owners thereof.
Sec. 20. An assessment upon any condominium
made in accordance with a duly registered declaration
of restrictions shall be an obligation of the owner
thereof at the time the assessment is made. The
amount of any such assessment plus any other
charges thereon, such as interest, costs (including
attorney's fees) and penalties, as such may be
provided for in the declaration of restrictions, shall be
and become a lien upon the condominium assessed
when the management body causes a notice of
assessment to be registered with the Register of
Deeds of the city or province where such
condominium project is located. The notice shall state
the amount of such assessment and such other
charges thereon a may be authorized by the
declaration of restrictions, a description of the
condominium, unit against which same has been
assessed, and the name of the registered owner
thereof. Such notice shall be signed by an authorized
representative of the management body or as
otherwise provided in the declaration of restrictions.
Upon payment of said assessment and charges or
other satisfaction thereof, the management body shall
cause to be registered a release of the lien.
Such lien shall be superior to all other liens registered
subsequent to the registration of said notice of
assessment except real property tax liens and except
that the declaration of restrictions may provide for the
subordination thereof to any other liens and
encumbrances.
Such liens may be enforced in the same manner
provided for by law for the judicial or extra-judicial
foreclosure of mortgages of real property. Unless
otherwise provided for in the declaration of
restrictions, the management body shall have power
to bid at foreclosure sale. The condominium owner
shall have the same right of redemption as in cases of
judicial or extra-judicial foreclosure of mortgages.
Sec. 21. No labor performed or services or materials
furnished with the consent of or at the request of a
condominium owner or his agent or his contractor or
subcontractor, shall be the basis of a lien against the
condominium of any other condominium owner,
unless such other owners have expressly consented
to or requested the performance of such labor or

furnishing of such materials or services. Such express

consent shall be deemed to have been given by the
owner of any condominium in the case of emergency
repairs of his condominium unit. Labor performed or
services or materials furnished for the common areas,
if duly authorized by the management body provided
for in a declaration of restrictions governing the
property, shall be deemed to be performed or
furnished with the express consent of each
condominium owner. The owner of any condominium
may remove his condominium from a lien against two
or more condominiums or any part thereof by
payment to the holder of the lien of the fraction of the
total sum secured by such lien which is attributable to
his condominium unit.
Sec. 22. Unless otherwise provided for by the
declaration of restrictions, the management body,
provided for herein, may acquire and hold, for the
benefit of the condominium owners, tangible and
intangible personal property and may dispose of the
same by sale or otherwise; and the beneficial interest
in such personal property shall be owned by the
condominium owners in the same proportion as their
respective interests in the common areas. A transfer
of a condominium shall transfer to the transferee
ownership of the transferor's beneficial interest in
such personal property.
Sec. 23. Where, in an action for partition of a
condominium project or for the dissolution of
condominium corporation on the ground that the
project or a material part thereof has been
condemned or expropriated, the Court finds that the
conditions provided for in this Act or in the declaration
of restrictions have not been met, the Court may
decree a reorganization of the project, declaring
which portion or portions of the project shall continue
as a condominium project, the owners thereof, and
the respective rights of said remaining owners and the
just compensation, if any, that a condominium owner
may be entitled to due to deprivation of his property.
Upon receipt of a copy of the decree, the Register of
Deeds shall enter and annotate the same on the
pertinent certificate of title.
Sec. 24. Any deed, declaration or plan for a
condominium project shall be liberally construed to
facilitate the operation of the project, and its
provisions shall be presumed to be independent and
severable.
Sec. 25. Whenever real property has been divided
into condominiums, each condominium separately
owned shall be separately assessed, for purposes of
real property taxation and other tax purposes to the
owners thereof and the tax on each such
condominium shall constitute a lien solely thereon.

Sec. 26. All Acts or parts of Acts in conflict or

inconsistent with this Act are hereby amended insofar
as condominium and its incidents are concerned.
Sec. 27. This Act shall take effect upon its approval.
Approved: June 18, 1966

REPUBLIC ACT NO. 4850 July 18, 1966

AN ACT CREATING THE LAGUNA LAKE
DEVELOPMENT AUTHORITY, PRESCRIBING ITS
POWERS, FUNCTIONS AND DUTIES, PROVIDING
FUNDS THEREFOR, AND FOR OTHER
PURPOSES.
CHAPTER I
DECLARATION OF POLICY AND CREATION OF
AUTHORITY
Sec. 1. Declaration of Policy. It is hereby declared to
be the national policy to promote, and accelerate the
development and balanced growth of the Laguna
Lake area and the surrounding provinces, cities and
towns hereinafter referred to as the region, within the
context of the national and regional plans and policies
for social and economic development and to carry out
the development of the Laguna Lake region with due
regard and adequate provisions for environmental
management and control, preservation of the quality
of human life and ecological systems, and the
prevention of undue ecological disturbances,
deterioration and pollution.
Sec. 2. Laguna Lake Development Authority created.
For the purpose of carrying out and effecting the
declared policy, as provided for in Section one hereof,
there is hereby created a body corporate to be known
as the Laguna Lake Development Authority,
hereinafter referred to as the Authority, which shall be
organized within one hundred twenty (120) days after
the approval of this Act. The Authority shall execute
the powers and functions herein vested and conferred
upon it in such a manner as will, in its judgment, aid to
the fullest possible extent in carrying out the aims and
purposes set forth below. This Act may be known as
the Laguna Lake Development Authority Act of 1966.
Sec. 3. Location of principal office. The Authority shall
maintain its principal office at a convenient place
within the region, but it may have branch offices in
such other places as are necessary for the proper
conduct of its business.
Sec. 4. Special Powers and Functions. The Authority
shall exercise perform the following powers and
functions:
(a) To make a comprehensive survey of the physical
and natural resources and potentialities of the Laguna
Lake region particularly its social and economic
conditions, hydrologic characteristics, power
potentials, scenic and tourist spots, regional
problems, and on the basis thereof, to draft a
comprehensive and detailed plan designed to

conserve and utilize optimally the resources within the

region particularly Laguna de Bay to promote the
region's rapid social and economic development and
upon approval by the National Economic and
Development Authority (NEDA) Board of such plan, to
implement the same including projects in line with
said plan: Provided, That implementation of all
fisheries plans and programs of the authority shall
require prior consensus of the Bureau of Fisheries
and Aquatic Resources to ensure that such plans and
programs are consistent with the national fisheries
plans and programs. For the purpose of said survey,
public agencies shall submit and private entities shall
provide necessary data except such data which under
existing laws are deemed inviolable.
(b) To provide the machinery for extending the
necessary planning, management and technical
assistance to prospective and existing investors in the
region;
(c) To make recommendation to the proper agencies
on the peso or dollar financing, technical support,
physical assistance and, generally, the level of priority
to be accorded agricultural, industrial and commercial
projects, soliciting or requiring direct help from or
through the government or any of its instrumentalities;
(d) To pass upon and approve or disapprove all plans,
programs, and projects proposed by local government
offices/agencies within the region, public corporations,
and private persons or enterprises where such plans,
programs and/or projects are related to those of the
Authority for the development of the region as
envisioned in this Act. The Authority shall issue the
necessary clearance for approved proposed plans,
programs, and projects within thirty days from
submission thereof unless the proposals are not in
consonance with those of the Authority or that those
will contribute to the unmanageable pollution of the
Laguna Lake waters or will bring about the ecological
imbalance of the region: Provided, further, That the
Authority is hereby empowered to institute necessary
legal proceeding against any person who shall
commence to implement or continue implementation
of any project, plan or program within the Laguna de
Bay region without previous clearance from the
Authority: Provided, furthermore,That any local
government office, agency, public corporation, private
person, or enterprise whose plans, programs and/or
projects have been disapproved by the Authority may
appeal the decision of the Authority to the NEDA
within fifteen (15) days from receipt of such
disapproval whose decision on the matter shall be
final. Reasonable processing fees as may be fixed by
the Authority's Board of Directors shall be collected by
the Authority for the processing of such plans,
programs and/or projects: Provided, finally, The
expansion plans shall be considered as new plans

subject to review of the Authority and to payment of

the processing fees.
The Authority and national and local government
offices, agencies and public corporations shall
coordinate their plans, programs, projects and
licensing procedures with respect to the Laguna Lake
region for the purpose of drawing up a Laguna Lake
development plan which shall be binding upon all
parties concerned upon approval of the NEDA board.
(e) To engage in agriculture, industry, commerce, or
other activities within the region which may be
necessary or directly contributory to the socioeconomic development of the region, and, for this
purposes, whether by itself or in cooperation with
private persons or entities, to organize, finance, invest
in, and operate subsidiary
corporations:Provided, That the Authority shall
engage only, unless public interest requires
otherwise, in those activities as are in the nature of
new ventures or are clearly beyond the scope,
capacity, or interest or private enterprises due to
consideration of geography, technical or capital
requirements, returns on investment, and risk;
(f) To plan, program finance/or undertake
infrastructure projects such as river, flood and tidal
control works, waste water and sewerage works,
water supply, roads, portworks, irrigation, housing and
related works, when so required within the context of
its development plans and programs including the
readjustment, relocation or settlement of population
within the region as may be necessary and beneficial
by the Authority: Provided, That should any project be
financed wholly or in part by the Authority, it is hereby
authorized to collect reasonable fees and tolls as may
be fixed by its Board of Directors subject to the
approval of the NEDA Board from users and/or
beneficiaries thereof to recover costs of construction,
operation and maintenance of the projects: Provided,
further, That if the Authority should find it necessary to
undertake such infrastructure projects which are
classified, as social overhead capital projects as
determined by the NEDA, the Authority shall be
authorized to receive financial assistance from the
government in such amount as may be necessary to
carry out the said projects subject to such terms and
condition that may be imposed by the government,
upon recommendation of the NEDA Board: Provided,
finally, That such amount as may be necessary for the
purpose is hereby authorized to be appropriated out
of the funds of the National Treasury not otherwise
appropriated.
(g) To make an annual report to the stockholders
regarding the operation of the Authority more
particularly a statement of its financial conditions,

activities undertaken, progress of projects and

programs and plans of actions for the incoming
years: Provided, however, That a majority of the
stockholders may require the Authority to submit
report or reports other than the annual report herein
required, which report must be submitted within a
period of thirty (30) days from notice thereof;
(h) To lend or facilitate the extension of financial
assistance and/or act as surety or guarantor to
worthwhile agricultural, industrial and commercial
enterprises;
(i) To reclaim or cause to the reclaimed portions of the
Lake or undertake reclamation projects and/or acquire
such bodies of land from the lake which may be
necessary to accomplish the aims and purposes of
the Authority subject to the approval of the NEDA
Board: Provided, That the land so reclaimed shall be
the property of the Authority and title thereto shall be
vested in the Authority: Provided, further, That the
resulting lake shore shall continue to be owned by the
national government.
(j) The provisions of existing laws to the contrary
notwithstanding, to engage in fish production and
other aqua-culture projects in Laguna de Bay and
other bodies of water within its jurisdiction and in
pursuance thereof to conduct studies and make
experiments, whenever necessary, with the
collaboration and assistance of the Bureau of
Fisheries and Aquatic Resources, with the end in view
of improving present techniques and
practice. Provided, That until modified, altered or
amended by the procedure provided in the following
sub-paragraph, the present laws, rules and permits or
authorizations remain in force;
(k) For the purpose of effectively regulating and
monitoring activities in Laguna de Bay, the Authority
shall have exclusive jurisdiction to issue new permit
for the use of the lake waters for any projects or
activities in or affecting the said lake including
navigation, construction, and operation of fishpens,
fish enclosures, fish corrals and the like, and to
impose necessary safeguards for lake quality control
and management and to collect necessary fees for
said activities and projects: Provided, That the fees
collected for fisheries may be shared between the
Authority and other government agencies and political
sub-divisions in such proportion as may be
determined by the President of the Philippine upon
recommendation of the Authority's Board: Provided,
further, That the Authority's Board may determine new
areas of fisheries development or activities which it
may place under the supervision of the Bureau of
Fisheries and Aquatic taking into account the overall
development plans and programs for Laguna de Bay

and related bodies of water: Provided, finally, That the

Authority shall subject to the approval of the President
of the Philippines promulgate such rules and
regulations which shall govern fisheries development
activities in Laguna de Bay which shall take into
consideration among others the following:
socioeconomic amelioration of bonafide resident
fisherman whether individually or collectively in the
form of cooperatives, lakeshore town development, a
master plan for fishpen construction and operation,
communal fishing ground for lakeshore town
residents, and preference to lakeshore town residents
in hiring laborers for fishery projects.
(l) To require the cities and municipalities embraced
within the region to pass appropriate zoning
ordinances and other regulatory measures necessary
to carry out the objectives of the Authority and enforce
the same with the assistance of the Authority.
(m) The provisions of existing laws to the contrary
notwithstanding, to exercise water rights over public
waters within the Laguna de Bay region whenever
necessary to carry out the Authority's projects;
(n) To act in coordination with existing governmental
agencies in establishing water quality standards for
industrial, agricultural and municipal waste discharges
into the lake and to cooperate with said existing
agencies of the government of the Philippines in
enforcing such standards, or to separately pursue
enforcement and penalty actions as provided for in
Section 4(d) and Section 39-A of this
Act: Provided, That in case of conflict on the
appropriate water quality standard to be enforced
such conflict shall be resolved thru the NEDA Board;
(o) To develop water supply from ground and/or lake
water resources for municipal, agricultural and
industrial usages, in coordination with the National
Water Resources Council created by Presidential
Decree No. 424 dated March 28, 1974 or its
successors in interests, and to enter into agreements
with municipalities, governmental agencies and
corporations and the private sector to supply,
distribute and market such water;
(p) Undertake studies on the improvement and
maintenance of the desirable lake water quality of
Laguna de Bay, and in pursuance thereof, prepare a
water quality management program on a continuing
basis, subject to the approval of the NEDA, which the
Authority shall carry out with the assistance and
support of all national and local government units
involved in water quality management.
Sec. 4-A. Compensation for damages to the water
and aquatic resources of Laguna de Bay and its

tributaries resulting from failure to meet established

water and effluent quality standards or from such
other wrongful act or omission of a person, private or
public, juridical or otherwise, punishable under the law
shall be awarded to the Authority to be earmarked for
water quality control and management.
Sec. 4-B. The Authority is hereby empowered to
collect annual fees as provided for in Sec. 4-J herein,
for the use of the lake waters and its tributaries for all
beneficial purposes including recreation, municipal,
industrial, agricultural, fisheries, navigation and waste
disposal purposes. All the fees so collected shall be
used for the management and development of the
lake and its watershed areas: Provided, That the rates
of the fees to be collected shall be subject to the
approval of the President of the Philippines.
CHAPTER III
CORPORATE POWERS
Sec. 5. The powers of the Authority. The Authority
shall have the following powers and functions:
a) To succeed on its corporate name;
b) To sue and be sued in such corporate name;
c) To adopt, alter and use a corporate seal;
d) To adopt, amend, and repeals its by-laws;
e) To enter into contracts of any kind and description,
to enable it to carry out its purposes and functions
under this Act;
f) To acquire, buy, purchase, hold or lease, such
personal and real property as it deems necessary or
convenient in the transaction of its business and/or in
relation with carrying out its purposes under this Act;
and to lease, mortgage, sell, alienate, or otherwise
encumber, utilize, exploit or dispose any such
personal and real property held by it, subject to prior
or existing individual or communal right of private
parties or of the government or any agency or
enterprise thereof.
g) To exercise the right of eminent domain whenever
the Authority deems it necessary for the attainment of
the objectives of the Authority under this Act;
h) To borrow funds from any local or foreign financial
institutions independent of the bonds it may issue or
may continue to issue, to carry out the purposes of
this Authority under this Act;

i) To purchase, hold, alienate, mortgage, pledge or

otherwise dispose of the shares of the capital stock
of, or any bond, securities, or other evidence of
indebtedness created by any other corporation, copartnership, or government agencies or
instrumentalities; and while the owner of said stock to
exercise all the rights or ownership, including the right
to vote thereon; Provided, That the Authority shall not
invest its funds in any highly risky debt instruments
issued without recourse to commercial banks or
investment houses as well as in any highly
speculative stocks.
j) For carrying on its business, or for the purpose of
attaining or furthering any of its objectives, to perform
any and all acts which a corporation, co-partnership,
or natural person is authorized to perform under the
laws now existing or which may be enacted hereafter.
k) To issue such rules and regulations as may be
necessary to effectively carry out the powers and
purposes herein provided including the plans,
programs and projects of the Authority, subject to the
approval of the NEDA, the same to take effect thirty
(30) days after publication thereof, in a newspaper of
general circulation.
Sec. 6. Capitalization and Financing. The Authority
shall have an authorized capital of One Hundred
Million Pesos (P100,000,000) of which the amount of
Fifty-One Million Pesos (P51,000,000) shall be
subscribed by the national government and FortyNine Million Pesos (P49,000,000) shall be subscribed
by cities, provinces, municipalities, government
corporations and private investors; Provided, That at
least twenty-five percent of the national government's
subscription shall be fully paid: Provided, further, That
the authorized capital stock may be increased upon
the recommendation of NEDA.
The authorized capital stock of One Hundred Million
pesos (P100M) shall be divided into One Million
(1,000,000) Shares of stock with a par value of One
hundred Pesos (P100) per share.
The shares of stock of the Authority shall be divided
into (1) 700,000 common shares (voting) and (2)
300,000 preferred shares (non-voting) with such fixed
rates of return as shall be determined by the Board.
Of the common shares of 700,000 a minimum of
400,000 shares shall be subscribed by the national
government and at least sixty per cent of the balance
shall be subscribed by the Provinces of Laguna and
Rizal in such proportion as may be agreed upon by
both provincial governments in accordance with their
respective capacities. The remaining balance of the
common shares shall be open for subscription to
cities, provinces, municipalities and private investors.

Of the preferred shares of stock of 300,000 a

minimum of 110,000 shares shall be subscribed by
the national government. The balance of the preferred
shares shall be available for subscription to cities,
provinces, municipalities, government corporations,
and private investors; Provided, however, That
preferred shares shall enjoy preference with respect
to distribution of dividends and assets in case of
dissolution.
Sec. 7. Powers of Municipal Corporations to
Subscribe. For purposes of attaining the purposes of
this Authority, municipalities, cities and provinces are
hereby authorized to subscribe, own, buy and hold
shares of stock of this Authority.
Sec. 8. Operating Expenses. For the operating
expenses of the Authority, the sum of One Million
Pesos (P1,000,000) is hereby appropriated annually
for five (5) years from the general fund of the National
Government not otherwise appropriated from the date
of approval of this Decree.
The Board of Directors may appropriate out of the
funds of the Authority such as may be needed or
necessary for its operating expenses.
Sec. 9. Power to Incur Debts and to Issue Bonds.
Whenever the Board of Directors may deem it
necessary for the Authority to incur an indebtedness
or to issue bonds to carry out the provisions of this
Act, it shall by resolution so declare and state the
purpose for which the proposed debt is to be incurred.
The resolution shall be confirmed by the affirmative
vote of the stockholders representing a majority of the
subscribed capital stock outstanding and entitled to
vote.
The Authority shall submit to the NEDA Board and the
Monetary Board of the Central Bank for approval its
proposal to incur indebtedness or to issue bonds, This
shall be considered authorized upon approval of the
President of the Philippines.
Sec. 10. Bond Limit. The bonds shall be issued in
such amounts as will be needed at any one time,
taking into account the rate at which said bonds may
be absorbed by the buying public and the fund
requirements of projects ready for execution, and
considering further a proper balanced productive and
non-productive projects so that inflation shall be held
to the minimum.
Sec. 11. Form, rates of interest, etc. of bonds. The
Board of Directors, shall prescribe the form, the rates
of interest, the denominations, maturities,
negotiability, convertibility, call and redemption
features, and all other terms and conditions of

issuance, placement, sale, servicing, redemption, and

payment of all bonds issued by the Authority under
this Act.
The bonds issued by virtue of this Act may be made
payable both as to principal and interest in Philippine
currency or any readily convertible foreign currency;
Said bonds shall be receivable as security in any
transaction with the government in which such
security is required.
Sec. 12. Exemption from tax. The Authority shall be
exempt from all taxes, licenses, fees, and duties,
incidental to its operations. This exemption shall
extend to its subsidiary corporation: Provided, That its
subsidiary corporations shall be subject to all said
taxes, licenses, fees, and duties five (5) years after
their establishment under a graduated scale as
follows: twenty (20) per centum of all said taxes
during the sixth year, forty (40) per centum of all said
taxes during the seventh year, sixty (60) per centum
of all said taxes during the eighth year, eighty (80) per
centum of all said taxes during the ninth year, and
one hundred (100) per centum of all taxes during the
tenth year, after said establishment. Such
examination shall include any tax or fee imposed by
the government on the sale, purchase or transfer of
foreign exchange. All notes, bonds, debentures and
other obligations issued by the Authority shall be
exempt from all taxes both as to principal and interest,
except inheritance and gift taxes.
Sec. 13. Sinking Fund. A sinking fund shall be
established in such manner that the total annual
contribution thereto accrued at such rate of interest as
may be determined by the Board of Directors as
confirmed by the stockholders representing a majority
of the subscribed capital stock outstanding and
entitled to vote, shall be sufficient to redeem at
maturity the bonds issued under this Act.
Such funds shall be under the custody of the
treasurer of the Authority who shall invest the same in
such manner as the Board of Directors may direct;
charge all expenses of investment to said sinking
fund, and credit the same with the interest on
investment and other income belonging to it.
Sec. 14. Guarantee by the government. The Republic
of the Philippines hereby guarantees the payment by
the Authority of both the principal and the interest of
the bonds, debentures, collaterals, notes or such
other obligations issued by the Authority by virtue of
this Act, and shall pay such principal and interest in
the event that the Authority fails to do so. In case the
Authority shall be unable to pay the said principal and
interest, the Secretary of Finance shall pay the
amount thereof which is hereby appropriated out of

any funds in the National Treasury not otherwise

appropriated, and thereupon, to the extent of the
amounts so paid, the Government of the Republic of
the Philippine shall succeed to all rights of the holders
of such bonds, debentures, collaterals, notes or other
obligations, unless the sum so paid by the Republic of
the Philippines shall be refunded by the Authority
within a reasonable time.
CHAPTER V
MANAGEMENT AND PERSONNEL
Sec. 15. Incorporation. The members of the first
Board of Directors shall be elected by the
stockholders and the incorporation shall be held to
have been effected from the date of the first meeting
of such Board.
Sec. 16. Board of Directors: Composition. The
corporate powers shall be vested in and exercised by
a Board of Directors, hereinafter referred to as the
Board, which shall be composed of eight (8)
members, to wit: the Executive Secretary, the
Secretary of Economic Planning, the Secretary of
Natural Resources, the Secretary of Industry, a
representative of Laguna Province, who shall be
designated by the Provincial Board of Laguna; a
representative of Rizal Province to be designated by
its Provincial Board; the General Manager of the
Authority to be appointed by the President of the
Philippines, and a representative of the private
investors, likewise to be appointed by the President of
the Philippines from among a list of recommendees to
be submitted by the private investors: Provided, That
the incumbent representative of the private investors:
shall continue as member until the President appoints
his successor. The Board of Directors shall elect
annually from among their members a Chairman and
a Vice Chairman. There shall be a Corporate
Secretary who shall be appointed the Board.
The officials next in rank to the above-mentioned
member shall serve as permanent alternate members
and shall attend meetings of the Board in the absence
of their principals and receive the corresponding per
diems.
Sec. 17. Acting Chairman. In case of vacancy in the
position of Chairman, or in the absence of or
temporary incapacity of the Chairman, the ViceChairman shall act as such until a new Chairman is
duly elected by the Board.
Sec. 18. (This provision were repealed by PD 813,
Section 19, promulgated on October 17, 1975.)

Sec. 19. (This provision were repealed by PD 813,

Section 19, promulgated on October 17, 1975.)
Sec. 20. Effect of vacancies; quorum. Vacancies in
the Board as long as there shall be four members in
office, shall not impair the powers of the Board to
execute the functions of the Authority. The affirmative
vote of four (4) members of the Board shall be
necessary at all times to pass or approve any act or
resolution.
Sec. 21. Qualifications of Directors. All members of
the Board shall be citizens and residents of the
Philippines. They shall have demonstrated executive
competence and experience in the field of public
administration, economic planning, resource
management, or in the establishment and
management of large agricultural, industrial or
commercial enterprises. No person shall be
nominated as member of the Board unless he be of
unquestioned integrity and competence.
Sec. 22. Prohibition against "Conflict of Interest." No
person member of the Board shall be financially
interested, directly or indirectly, in any contract
entered into by the Authority or in any special
privileges granted by the Authority during his term of
office. All contracts entered into in violation of this
provision shall automatically be null and void. Any
member of the Board found violating the provisions of
this section by two-thirds (2/3) vote of the Board shall
automatically be disqualified from serving his
unexpired term, and he shall furthermore be
perpetually disqualified for membership in the said
Board.
Sec. 23. Removal, courtesy resignation. A member of
the Board may be removed from office by a vote of
the stockholders holding or representing three-fourths
(3/4) of the subscribed capital stock outstanding and
entitled to vote. No member of the Board shall be
required to submit a courtesy resignation at any time
during his term of office.
Sec. 24. Board Meetings. The Board shall meet at
least once a month. The Board shall be convoked by
the Chairman or upon written request signed by a
majority of the members.
Sec. 25. Per Diems and Allowances. The members of
the Board shall receive for every meeting attended a
per diem to be determined by the
Board: Provided, That in no case will the total amount
received by each exceed the sum of One Thousand
Pesos (P1,000.00) for any one month. Members of
the Board shall be entitled to commutable
transportation and representation allowances in the
performance of official functions for the Authority as

authorized by the Board the aggregate amount of

which shall not exceed One Thousand Pesos
(P1,000.00) for any one month.
Sec. 25-A. Powers and Functions of the Board of
Directors.
a. To formulate, prescribe, amend and repeal rules
and regulations to govern the conduct of business of
the Authority;
b. To appoint and fix the compensation of all officials
from division heads and above, and others of
comparable rank including the Assistant General
Manager upon the recommendation of the General
Manager;
c. By a majority vote of all members of the Board, to
suspend, remove or otherwise discipline for just
cause all officials appointed by the Board;
d. To approve the annual and/or supplemental
budgets of the Authority; and
e. To do such other acts and perform such other
functions as may be necessary to carry out the
provisions of this Charter.
Sec. 26. Powers and Functions of the General
Manager. The General Manager shall be the chief
executive of the Authority. As such, he shall have the
following powers and duties:
a. Submit for consideration of the Board the policies
and measures which he believes to be necessary to
carry out the purposes and provisions of this Act;
b. Execute and administer the policies, plans,
programs and projects approved by the Board;
c. Direct and supervise the operation and internal
administration of the Authority. The General Manager
may delegate certain of his administrative
responsibilities to other officers of the Authority
subject to the rules and regulations of the Board.
d. Appoint officials and employees below the rank of
division heads to positions in the approved budget
upon written recommendation of the division head
concerned using as guide the standard set forth in the
Authority's merit system;
e. Submit quarterly reports to the Board on personnel
selection, placement and training;
f. Submit to the NEDA an annual report and such
other reports as may be required, including the details

of the annual and supplemental budgets of the

Authority, and
g. Perform such other functions as may be provided
by law.
Sec. 27. (This provision were repealed by PD 813,
Section 18, promulgated on October 17, 1975.)
Sec. 28. (This provision were repealed by PD 813,
Section 19, promulgated on October 17, 1975.)
Sec. 29. Compensation. The General Manager shall
receive a compensation of at least Thirty-Six
Thousand Pesos (P36,000.00) per annum which shall
be charged against the annual appropriation of the
Authority for operating expenses. The Board of
Directors may provide per diems and allowances for
the General Manager.
Sec. 30. Residence. The General Manager shall
establish his residence within the region. The General
Manager shall not, during his term of office, engage in
any business or profession or calling other than those
connected in the performance of his official duties as
General Manager of the Authority.
Sec. 31. Activities of the Authority: Key Officials. In
carrying out the activities of the Authority, the General
Manager shall be assisted by an Assistant General
Manager who shall have such powers, duties, and
functions that may be delegated to him by the
General Manager, and shall act as General Manager
in the absence of or during the temporary incapacity
of and/or until such time as a new General Manager is
duly appointed.
The Authority shall have the following divisions under
the direct supervision and control of the General
Manager;
a. An Administrative Division which shall be
responsible for providing services relating to
personnel, training, information, records, supplies
general services, equipment and security;
b. A legal Division, to be headed by a Legal Counsel
who shall represent the Authority in legal actions and
proceedings. This division shall be responsible for
providing staff advice and assistance on legal
matters;
c. A Finance Division which shall be responsible for
providing staff advice and assistance on budgetary
and financial matters, and safekeeping of corporate
assets;

d. A Project Management Division which shall be

responsible for the operation of approved projects,
project evaluation and management improvement
matters;
e. A Planning and Project development Division which
shall be responsible for providing services relating to
planning, programming, statistics and project
development; and
f. An Engineering and Construction Division which
shall be responsible for providing services relating to
detailed engineering plans and the construction and
maintenance of project facilities.
The business and activities of each of these divisions
shall be directed by an officer to be known as its
division head.
The Board may create such other divisions and
positions as may be deemed necessary for the
efficient, economical and effective conduct of the
activities of the Authority.
Sec. 32. Merit and Compensation System. All
officials, agents and employees of the Authority shall
be selected and appointed on the basis of merit and
fitness in accordance with a comprehensive and
progressive merit system to be established by the
Authority. The recruitment, transfer, promotion and
dismissal of all personnel of the authority, including
temporary workers, shall be governed by such merit
system: Provided, That the regular professional and
technical personnel of the Authority shall be exempt
from the coverage of the classification and
compensation plans of the WAPCO and Civil Service
rules and regulations: Provided, however, That such
personnel shall be permanent instates and shall be
entitled to the benefits and privileges normally
accorded to government employees, such as
retirement, GSIS insurance, leave and similar
matters: Provided, further, That the Director General
of the NEDA shall review and recommend the
approval of the staffing pattern for professional and
technical personnel of the Authority including
modifications thereof as may be necessary for five
years from the date of approval of this Decree.
Sec. 33. (This provision were repealed by PD 813,
Section 23, promulgated on October 17, 1975.)
Sec. 34. (This provision were repealed by PD 813,
Section 24, promulgated on October 17, 1975.)
Sec. 34-A. Supervision by the NEDA. The Authority
shall be directly under the NEDA for policy and
program integration.

Sec. 34-B. Submission of Financial Statement to

NEDA. The Authority shall submit audited financial
statements to NEDA within 60 days after the close of
the fiscal year, and it shall continue to operate on the
basis of not more than the preceding year's budget
until the said financial statements shall have been
submitted.

losses, bad debts and such other facts which, under

auditing rules and regulations, are considered
necessary to accurately described the financial
conditions and operation of the Authority. The auditor
shall report and directly responsible to the Board.

Sec. 34-C. Management Audit by the NEDA. The

NEDA, may, at its own instance, initiate a
management audit of the Authority when there is a
reasonable ground to believe that the affairs of the
Authority have been mismanaged. Should such audit
indicate mismanagement, the NEDA shall take such
appropriate measures as may be required by
circumstances.

Sec. 39-A. Penal and Civil Liability Clause. Any

person, natural or juridical, who shall violate any of
the provisions of this Act or any rules or regulation
promulgated by the Authority pursuant thereto shall
be liable to imprisonment of not exceeding three
years or to a fine not exceeding Five Thousand Pesos
or both at the discretion of the Court.

Sec. 35. Minimum Wage. All contracts entered into by

the Authority which require the employment of
persons shall contain provision that not less than the
minimum wage fixed by law shall be paid to such
persons so employed.
Sec. 36. Plans to be formulated within one year. Upon
its organization, the Board of Directors shall formulate
and report to the stockholders with the utmost
expeditious manner, but in no case longer than one
year, its plans and recommendations for the
accelerated and balanced development of the region
in accordance with the aims and purposes of this Act.
Sec. 37. Supplies and services other than personnel.
All purchases of supplies or contracts for services,
except for personnel services, entered into by the
Authority shall be done only after the proper bidding is
held. Bidding shall not be required when: (1) the
amount involved is five thousand pesos (P5,000.00)
or less; (2) an emergency, as certified to by the
General Manager, requires immediate delivery of the
supplies or performance of the
services: Provided,That in comparing bids and
making awards, the Authority shall consider such
factors as the cost and relative quality and
adaptability of supplies or services; the bidders'
financial responsibility, skill, experience, integrity, and
ability to furnish repairs and maintenance services;
the time of delivery or performance offered; and the
compliance with the specifications desired.
Sec. 38. Auditing. The Board of Directors shall
provide and appoint an auditor who shall formulate an
auditing system for the Authority. The auditor shall
make a semestral and/or annual report covering the
financial conditions and operation of the Authority to
the Board. These auditing reports shall contain a
statement of the resources and liabilities, including
earnings and expenses, the amount of paid-up capital
stock, surplus, reserves, and profits, as well as

Sec. 39.

If the violator be a corporation, partnership or

association, the officer or officers of the organization
concerned shall be liable therefor.
The authority is hereby authorized to pursue separate
civil actions for damages resulting from infractions of
the provisions of this Act, rules or regulations issued
pursuant thereto and/or conditions embodied in the
clearances or permits issued by the Authority.
Sec. 40. Separability Clause. The provisions of this
Act are hereby declared to be separable, and in the
event any one or more such provisions are held
unconstitutional, they shall not affect the validity of
other provisions.
Sec. 40-A. Transitory Provision. When the Regional
Development Council for the region becomes
operational, the socio-economic planning functions as
envisioned under this Charter shall be assumed by
the aforementioned Regional Development Council in
accordance with the provisions of the Integrated
Reorganization Plan, as amended. All incumbent
officials and employees shall continue in office and
those qualified shall have preference in filling up new
positions that may be created as consequence of this
Decree.
Sec. 41. Definition of Terms.
1) Act Whenever used in this Act, shall refer to the
enabling Act creating the Laguna Lake Development
Authority;
2) Authority Whenever cited in this Act shall mean the
Laguna Lake Development Authority;
3) Board The word Board shall always refer to the
Board of Directors of the Laguna Lake Development
Authority;

4) Region The word Region in this connection mean

the Laguna Lake area proper comprising the
provinces of Rizal and Laguna and the cities of San
Pablo, Manila, Pasay, Quezon and Caloocan;
5) Government instrumentalities or agencies or
entities. Whenever used in this Act shall means
instruments of the national or local governments
vested with powers to accomplish a definite
government aim or purpose;
6) Municipal Corporation. Whenever used in this Act
shall mean one that is organized for political purposes
with political powers exercised for the good of the
public, subject to legislative control and with officers
of the government as its members to administer or
discharge public duties;
7) Government Corporation. Whenever used shall
refer to corporations engaged in performing functions
impressed with public interest;
8) Investor With regards to this Act, investors shall
include public and private investors whether foreign or
local;
9) External Auditor. Shall mean a firm or a person
hired outside the Authority or agency to audit the
books of accounts of another corporation or agency;
examine financial records, prepare audit reports on
findings in the operation of the agency; review the
statement on the performance report of the Authority.
10) Subsidiary Corporation. A corporation that is
organized or a corporation already in existence
wherein at least fifty-one per cent of its shares of
stock are owned or controlled by the organizing or
subscribing Authority, in this case, the Laguna Lake
Development Authority, to carry out or accomplish its
purposes.
11) Laguna Lake or Lake. Whenever Laguna Lake or
lake is used in this Act, the same shall refer to Laguna
de Bay which is that area covered by the lake water
when it is at the average annual maximum lake level
of elevation 12.50 meters, as referred to a datum
10.00 meters below mean lower low water (M.L.L.W.).
Lands located at and below such elevation are public
lands which form part of the bed of said lake.
Sec. 42. Laws repealed. All Acts, charters, executive
orders, administrative orders, proclamations, rules
and regulations, or parts thereof in conflict with this
Act are hereby repealed or modified accordingly.
Sec. 43. Effectivity. This Act shall take effect upon its
approval.

Approved: July 18, 1966.

PRESIDENTIAL DECREE No. 1067 December 31,

1976
A DECREE INSTITUTING A WATER CODE,
THEREBY REVISING AND CONSOLIDATING THE
LAWS GOVERNING THE OWNERSHIP,
APPROPRIATION, UTILIZATION, EXPLOITATION,
DEVELOPMENT, CONSERVATION AND
PROTECTION OF WATER RESOURCES
WHEREAS, Article XIV, Section 8 of the New
Constitution of the Philippines provides, inter alia, that
all waters of the Philippines belong to the State;
WHEREAS, existing water legislations are piece-meal
and inadequate to cope with increasing scarcity of
water and changing patterns of water use;
WHEREAS, there is a need for a Water Code based
on rational concepts or integrated and multipurpose
management of water resources and sufficiently
flexible to adequately meet future developments;
WHEREAS, water is vital to national development and
it has become increasingly necessary for government
to intervene actively in improving the management of
water resources;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers in
me vested by the Constitution, do hereby order and
decree the enactment of the water Code of the
Philippines of 1976, as follows:
CHAPTER I
DECLARATION OF OBJECTIVES AND
PRINCIPLES
Article 1. This Code shall be known as The Water
Code of the Philippines.
Article 2. The objectives of this Code are:
(a) To establish the basic principles and
framework relating to the appropriation,
control and conservation of water resources to
achieve the optimum development and
rational utilization of these resources;
(b) To define the extent of the rights and
obligations of water users and owners
including the protection and regulation of such
rights;
(c) To adopt a basic law governing the
ownership, appropriation, utilization,
exploitation, development, conservation and

protection of water resources and rights to

land related thereto; and
(d) To identify the administrative agencies
which will enforce this Code.
Article 3. The underlying principles of this code are:
(a) All waters belong to the State.
(b) All waters that belong to the State can not
be the subject to acquisitive prescription.
(c) The State may allow the use or
development of waters by administrative
concession.
(d) The utilization, exploitation, development,
conservation and protection of water
resources shall be subject to the control and
regulation of the government through the
National Water Resources Council,
hereinafter referred to as the Council.
(e) Preference in the use and development of
waters shall consider current usages and be
responsive to the changing needs of the
country.
Article 4. Waters, as used in this Code, refers to
water under the grounds, water above the ground,
water in the atmosphere and the waters of the sea
within the territorial jurisdiction of the Philippines.
CHAPTER II
OWNERSHIP OF WATERS
Article 5. The following belong to the State:
(a) Rivers and their natural beds;
(b) Continuous or intermittent waters of
springs and brooks running in their natural
beds and the beds themselves;
(c) Natural lakes and lagoons;
(d) All other categories of surface waters such
as water flowing over lands, water from rainfall
whether natural, or artificial, and water from
agriculture runoff, seepage and drainage;
(e) Atmospheric water;
(f) Subterranean or ground waters; and,

(g) Seawater.
Article 6. The following waters found on private lands
belong to the State:

(d) Power generation

(e) Fisheries
(f) Livestock raising

(a) Continuous or intermittent waters rising on

such lands;
(b) Lakes and lagoons naturally occuring on
such lands;

(g) Industrial
(h) Recreational, and
(i) Other purposes

(c) Rain water falling on such lands;

(d) Subterranean or ground waters; and,
(e) Water in swamps and marshes.

Use of water for domestic purposes is the utilization of

water for drinking, washing, bathing, cooking or other
household needs, home gardens, and watering of
lawns or domestic animals.

The owner of the land where the water is found may

use the same for domestic purposes without securing
a permit, provided that such use shall be registered,
when required by the Council. The Council, however,
may regulate such when there is wastage, or in times
of emergency.

Use of water for municipal purposes is the utilization

of water for supplying the water requirements of the
community.

Article 7. Subject to the provisions of this Code, any

person who captures or collects water by means of
cisterns, tanks, or pools shall have exclusive control
over such water and the right to dispose of the same.

Use of water for power generation is the utilization of

water for producing electrical or mechanical power.

Article 8. Water legally appropriated shall be subject

to the control of the appropriator from the moment it
reaches the appropriator's canal or aqueduct leading
to the place where the water will be used or stored
and, thereafter, so long as it is being beneficially used
for the purposes for which it was appropriated.
CHAPTER III
APPROPRIATION OF WATERS
Article 9. Waters may be appropriated and used in
accordance with the provisions of this Code.
Appropriation of water, as used in this Code, is the
acquisition of rights over the use of waters or the
taking or diverting of waters from a natural source in
the manner and for any purpose allowed by law.
Article 10. Water may be appropriated for the
following purposes:

Use of water for irrigation is the utilization of water for

producing agricultural crops.

Use of water for fisheries is the utilization of water for

the propagation and culture of fish as a commercial
enterprise.
Use of water for livestock raising is the utilization of
water for large herds or flocks of animals raised as a
commercial enterprise.
Use of water for industrial purposes is the utilization of
water in factories, industrial plants and mines,
including the use of water as an ingredient of a
finished product.
Use of water for recreational purposes is the
utilization of water for swimming pools, bath houses,
boating, water skiing, golf courses and other similar
facilities in resorts and other places of recreation.
Article 11. The State, for reasons of public policy,
may declare waters not previously appropriated, in
whole or in part, exempt from appropriation for any or
all purposes and, thereupon, such waters may not be
appropriated for those purposes.

(a) Domestic
(b) Municipal
(c) Irrigation

Article 12. Waters appropriated for a particular

purpose may be applied for another purpose only
upon prior approval of the Council and on condition
that the new use does not unduly prejudice the rights
of other permittees, or require an increase in the
volume of water.

Article 13. Except as otherwise herein provided, no

person, including government instrumentalities or
government-owned or controlled corporations, shall
appropriate water without a water right, which shall be
evidenced by a document known as a water permit.
Water right is the privilege granted by the government
to appropriate and use water.
Article 14. Subject to the provisions of this Code
concerning the control, protection, conservation, and
regulation of the appropriation and use of waters, any
person may appropriate or use natural bodies of
water without securing a water permit for any of the
following:
(a) Appropriation of water by means of
handcarried receptacles; and
(b) Bathing or washing, watering or dipping of
domestic or farm animals, and navigation of
watercrafts or transportation of logs and other
objects by flotation.
Article 15. Only citizens of the Philippines, of legal
age, as well as juridical persons, who are duly
qualified by law to exploit and develop water
resources, may apply for water permits.
Article 16. Any person who desires to obtain a water
permit shall file an application with the Council who
shall make known said application to the public for
any protests.
In determining whether to grant or deny an
application, the Council shall consider the following:
protests filed, if any; prior permits granted; the
availability of water; the water supply needed for
beneficial use; possible adverse effects; land-use
economics; and other relevant factors.
Upon approval of an application, a water permit shall
be issued and recorded.
Article 17. The right to the use of water is deemed
acquired as of the date of filing of the application for a
water permit in case of approved permits, or as of the
date of actual use in a case where no permit is
required.
Article 18. All water permits granted shall be subject
to conditions of beneficial use, adequate standards of
design and construction, and such other terms and
conditions as may be imposed by the Council.
Such permits shall specify the maximum amount of
water which may be diverted or withdrawn, the

maximum rate of diversion or withdrawal, the time or

times during the year when water may be diverted or
withdrawn, the points or points of diversion or location
of wells, the place of use, the purposes of which water
may be used and such other requirements the
Council deems desirable.
Article 19. Water rights may be leaded or transferred
in whole or in part to another person with prior
approval of the Council, after due notice and hearing.
Article 20. The measure and limit of appropriation of
water shall be beneficial use.
Beneficial use of water is the utilization of water in the
right amount during the period that the water is
needed for producing the benefits for which the water
is appropriated.
Article 21. Standards of beneficial use shall be
prescribed by the council for the appropriator of water
for different purposes and conditions, and the use of
waters which are appropriated shall be measured and
controlled in accordance therewith.
Excepting for domestic use, every appropriator of
water shall maintain water control and measuring
devices, and keep records of water withdrawal. When
required by the Council, all appropriators of water
shall furnish information on water use.
Article 22. Between two or more appropriators of
water from the same sources of supply, priority in time
of appropriation shall give the better right, except that
in times of emergency the use of water for domestic
and municipal purposes shall have a better right over
all other uses; Provided, the where water shortage is
recurrent and the appropriator for municipal use has a
lower priority in time of appropriation, then it shall be
his duty to find an alternative source of supply in
accordance with conditions prescribed by the Council.
Article 23. Priorities may be altered on grounds of
greater beneficial use, multi-purpose use, and other
similar grounds after due notice and hearing, subject
to payment of compensation is proper cases.
Article 24. A water right shall be exercised in such a
manner that the rights of third persons or of other
appropriators are not prejudiced thereby.
Article 25. A holder of water permit may demand the
establishment of easements necessary for the
construction and maintenance of the works and
facilities needed for the beneficial use of the waters to
be appropriated subject to the requirements of just
compensation and to the following conditions:

(a) That he is the owner, lessee, mortgagee or

one having real right over the land upon which
he proposes to use water; and
(b) That the proposed easement is the most
convenient and the least onerous to the
servient estate.
Easements relating to the appropriation and use of
waters may be modified by agreement of the
contracting parties provided the same is not contrary
to law or prejudicial to third persons.
Article 26. Where water shortage is recurrent, the
use of the water pursuant to a permit may, in the
interest of equitable distribution of the benefits among
legal appropriators, reduce after due notice and
hearing.
Article 27. Water users shall bear the diminution of
any water supply due to natural causes or force
majeure.
Article 28. Water permits shall continue to be valid as
long as water is beneficially used; however, it maybe
suspended on the grounds of non-compliance with
approved plans and specifications or schedules of
water distribution; use of water for a purpose other
than that for which it was granted; non-payment of
water charges; wastage; failure to keep records of
water diversion, when required; and violation of any
term or condition of any permit or rules and
regulations promulgated by the Council.
Temporary permits may be issued for the
appropriation and use of water for short periods under
special circumstances.
Article 29. Water permits may be revoked after due
notice and hearing on grounds of non-use; gross
violation of the conditions imposed in the permit;
unauthorized sale of water; willful failure or refusal to
comply with rules and regulations of any lawful order;
pollution, public nuisance or acts detrimental to public
health and safety; when the appropriator is found to
be disqualified under the law to exploit and develop
natural resources of the Philippines; when, in the
case, of irrigation, the land is converted to nonagricultural purposes; and other similar grounds.
Article 30. All water permits are subject to
modification or cancellation by the council, after due
notice and hearing, in favor of a project of greater
beneficial use or for multi-purpose development, and
a water permittee who suffers thereby shall be duly
compensated by the entity or person in whose favor
the cancellation was made.

CHAPTER IV
UTILIZATION OF WATERS
Article 31. Preference in the development of water
resources shall consider security of the State, multiple
use, beneficial effects, adverse effects and costs of
development.
Article 32. The utilization of subterranean or ground
water shall be coordinated with that of surface waters
such as rivers, streams, springs and lakes, so that a
superior right in one not adversely affected by an
inferior right in the other.
For this purpose the Council shall promulgate rules
and regulations and declare the existence of control
areas for the coordinated development, protection,
and utilization of subterranean or ground water and
surface waters.
Control area is an area of land where subterranean or
ground water and surface water are so interrelated
that withdrawal and use in one similarly affects the
other. The boundary of a control area may be altered
from time to time, as circumstances warrant.
Article 33. Water contained in open canals,
aqueducts or reservoirs of private persons may be
used by any person for domestic purpose or for
watering plants as long as the water is withdrawn by
manual methods without checking the stream or
damaging the canal, aqueduct or reservoir; Provided,
That this right may be restricted by the owner should
it result in loss or injury to him.
Article 34. A water permittee or appropriator may use
any watercourse to convey water to another point in
the watercourse for the purpose stated in a permit
and such water may be diverted or recaptured at that
point by said permittee in the same amount less
allowance for normal losses in transit.
Article 35. Works for the storage, diversion,
distribution and utilization of water resources shall
contain adequate provision for the prevention and
control of diseases that may be induced or spread by
such works when required by the Council.
Article 36. When the reuse of waste water is feasible,
it shall be limited as much as possible, to such uses
other than direct human consumption. No person or
agency shall distribute such water for public
consumption until it is demonstrated that such
consumption will not adversely affect the health and
safety of the public.
Article 37. In the construction and operation of
hydraulic works, due consideration shall be given to

the preservation of scenic places and historical relics

and, in addition to the provisions of existing laws, no
works that would required the destruction or removal
of such places or relics shall be undertaken without
showing that the distribution or removal is necessary
and unaviodable.
Article 38. Authority for the construction of dams,
bridges and other structures across of which may
interfere with the flow of navigable or flotable
waterways shall first be secured from the Department
of Public Works, Transportation and Communications.
Article 39. Except in cases of emergency to save life
or property, the construction or repair of the following
works shall be undertaken only after the plans and
specifications therefor, as may be required by the
Council, are approved by the proper government
agency; dams for the diversion or storage of water;
structures for the use of water power, installations for
the utilization of subterranean or ground water and
other structures for utilization of water resources.
Article 40. No excavation for the purpose of emission
of a hot spring or for the enlargement of the existing
opening thereof shall be made without prior permit.
Any person or agency who intends to develop a hot
spring for human consumption must first obtain a
permit from the Department of Health.
Article 41. No person shall develop a stream, lake, or
spring for recreational purposes without first securing
a permit from the Council.
Article 42. Unless-otherwise ordered by the President
of the Philippines and only in time of national calamity
or emergency, no person shall induce or restrain
rainfall by any method such as cloud seeding without
a permit from the proper government emergency.
Article 43. No person shall raise or lower the water
level of a river stream, lake, lagoon, or marsh nor
drain the same without a permit.
Article 44. Drainage systems shall be so constructed
that their outlets are rivers, lakes, the sea, natural
bodies of water, or such other water course as may
be approved by the proper government agency.
Article 45. When a drainage channel is constructed
by a number of persons for their common benefit, the
cost of construction and maintenance of the channel
shall be borne by each in proportion to the benefits
drived.
Article 46. When artificial means are employed to
drain water from higher to lower land, the owner of the

higher land shall select the routes and methods of

drainage that will cause the minimum damage to the
lower lands, subject to the requirements of just
compensation.
Article 47. When the use, conveyance or storage of
waters results in damage to another, the person
responsible for the damage shall pay compensation.
Article 48. When a water resources project interferes
with the access of landowner to a portion of his
property or with the conveyance of irrigation or
drainage water, the person or agency constructing the
project shall bear the cost of construction and
maintenance of the bridges, flumes and other
structures necessary for maintaining access,
irrigation, or drainage, in addition to paying
compensation for land and incidental damages.
Article 49. Any person having an easement for an
aqueduct may enter upon the servient land for the
purpose of cleaning, repairing or replacing the
aqueduct or the removal of obstructions therefrom.
Article 50. Lower estates are obliged to receive the
waters which naturally and without the intervention of
man flow from the higher estate, as well as the stone
or earth which they carry with them.
The owner of the lower estate can not construct works
which will impede this natural flow, unless he provides
an alternative method of drainage; neither can the
owner of the higher estate make works which will
increase this natural flow.
Article 51. The banks of rivers and streams and the
shores of the seas and lakes throughout their entire
length and within a zone of three (3) meters in urban
areas, twenty (20) meters in agricultural areas and
forty (40) meters in forest areas, along their margins
are subject to the easement of public use in the
interest of recreation, navigation, floatage, fishing and
salvage. No person shall be allowed to stay in this
zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build
structures of any kind.
Article 52. The establishment, extent, form, and
conditions of easements of water not expressly
determined by the provisions of this Code shall be
governed by the provisions of the Civil Code.
CHAPTER V
CONTROL OF WATERS
Article 53. To promote the best interest and the
coordinated protection of flood plain lands, the
Secretary of Public Works, Transportation and

Communications may declare flood control areas and

promulgate guidelines for governing flood plain
management plans in these areas.

or prohibited during designated season of the year

with due regard to the needs of irrigation and
domestic water supply and other uses of water.

Article 54. In declared flood control areas, rules and

regulations may be promulgated to prohibit or control
activities that may damage or cause deterioration or
lakes and dikes, obstruct the flow of water, change
the natural flow of the river, increase flood losses or
aggravate flood problems.

Article 61. The impounding of water in ponds or

reservoirs may be prohibited by the Council upon
consultation with the Department of Health if it is
dangerous to public health, or it may order that such
pond or reservoir be drained if such is necessary for
the protection of public health.

Article 55. The government may construct necessary

flood control structures in declared flood control
areas, and for this purpose it shall have a legal
easement as wide as may be needed along and
adjacent to the river bank and outside of the bed or
channel of the river.

Article 62. Waters of a stream may be stored in a

reservoir by a permittee in such amount as will not
prejudice the right of any permittee downstream.
Whoever operates the reservoir shall, when required,
release water for minimum stream flow.

Article 56. River beds, sand bars and tidal flats may
not be cultivated except upon prior permission from
the Secretary of the Department of Public Works,
Transportation and Communication and such
permission shall not be granted where such
cultivation obstructs the flow of water or increase
flood levels so as to cause damage to other areas.
Article 57. Any person may erect levees or
revetments to protect his property from flood,
encroachment by the river or change in the course of
the river, provided that such constructions does not
cause damage to the property of another.
Article 58. When a river or stream suddenly changes
its course to traverse private lands, the owners of the
affected lands may not compel the government to
restore the river to its former bed; nor can they
restrain the government from taking steps to revert
the river or stream to its former course. The owners of
the land thus affected are not entitled to
compensation for any damage sustained thereby.
However, the former owners of the new bed shall be
the owners of the abandoned bed in proportion to the
area lost by each.
The owners of the affected lands may undertake to
return the river or stream to its old bed at their own
expense; Provided, That a permit therefor is secured
from the Secretary of Public Works, Transportation
and Communication and work pertaining thereto are
commenced within two years from the change in the
course of the river or stream.

All reservoir operations shall be subject to rules and

regulations issued by the Council or any proper
government agency.
Article 63. The operator of a dam for the storage of
water may be required to employ an engineer
possessing qualifications prescribed for the proper
operations, maintenance and administration of the
dam.
Article 64. The Council shall approve the manner,
location, depth, and spacing in which borings for
subterranean or ground water may be made,
determine the requirements for the registration of
every boring or alteration to existing borings as well
as other control measures for the exploitation of
subterranean or ground water resources, and in
coordination with the Professional Regulation
Commission prescribe the qualifications of those who
would drill such borings.
No person shall drill a well without prior permission
from the Council.
Article 65. Water from one river basin may be
transferred to another river basin only with approval of
the Council. In considering any request for such
transfer, the Council shall take into account the full
costs of the transfer, the benefits that would accrue to
the basin of origin without the transfer, the benefits
would accrue to the receiving basin on account of the
transfer, alternative schemes for supplying water to
the receiving basin, and other relevant factors.

Article 59. Rivers, lakes and lagoons may, upon the

recommendation of the Philippines Coast Guard, be
declared navigable either in whole or in part.

CHAPTER VI
CONSERVATION AND PROTECTION OF WATERS
AND WATERSHEDS AND RELATED LAND
RESOURCES

Article 60. The rafting of logs and other objects on

rivers and lakes which are flotable may be controlled

Article 66. After due notice and hearing when

warranted by circumstances, minimum stream flows

for rivers and streams, and minimum water levels for

lakes may be established by the Council under such
conditions as may be necessary for the protection of
the environment, control of pollution, navigation,
prevention of salt damage, and general public use.

Article 74. Swamps and marshes which are owned

by the State and which primary value for waterfowl
propagation or other wildlife purposes may be
reserved and protected from drainage operation and
development.

Article 67. Any watershed or any area of land

adjacent to any surface water or overlying any ground
water may declared by the Department of Natural
Resources as protected area Rules and regulations
may be promulgated by such Department to prohibit
or control such activities by the owners or occupants
thereof within the protected area which may damage
or cause the deterioration of the surface water or
ground water or interfere with the investigation, use,
control, protection, management or administration of
such waters.

Article 75. No person shall, without prior permission

from the National Pollution Control Commission, build
any works that may produce dangerous or noxious
substances or perform any act which may result in the
introduction of sewage, industrial waste, or any
pollutant into any source of water supply.

Article 68. It shall be the duty of any person in control

of a well to prevent the water from flowing on the
surface of the land, or into any surface water, or any
porous stratum under neath the surface without being
beneficially used.

Article 76. The establishment of cemeteries and

waste disposal areas that may affect the source of a
water supply or a reservoir for domestic or municipal
use shall be subject to the rules and regulations
promulgated by the Department of Health.

Article 69. It shall be the duty of any person in control

of a well containing water with minerals or other
substances injurious to man, animals, agriculture, and
vegetation to prevent such waters from flowing on the
surface of the land or into any surface water or into
any other aquifer or porous stratum.

Article 77. Tailings from mining operations and

sediments from placer mining shall not be dumped
into rivers and waterways without prior permission
from the Council upon recommendation by the
National Pollution Control Commission.

Article 70. No person shall utilize an existing well or

pond or spread waters for recharging substerranean
or ground water supplies without prior permission of
the Council.

Article 78. The application of agricultural fertilizers

and pesticides may be prohibited or regulated by the
National Pollution Control Commission in the areas
where such application may cause pollution of a
source of water supply.

Article 71. To promote better water conservation and

usage for irrigation purposes, the merger of irrigation
associations and the appropriation of waters by
associations instead of by individuals shall be
encouraged.
No water permit shall be granted to an individual
when his water requirement can be supplied through
an irrigation association.
Article 72. In the consideration of a proposed water
resource project, due regard shall be given to
ecological changes resulting from the construction of
the project in order to balance the needs of
development and the protection of the environment.
Article 73. The conservation of fish and wildlife shall
receive proper consideration and shall be coordinated
with other features of water resources development
programs to insure that fish and wildlife values
receive equal attention with other project purposes.

Water pollution is the impairment of the quality of

water beyond a certain standard. This standard may
vary according to the use of the water and shall be set
by the National Pollution Control Commission.

CHAPTER VII
ADMINISTRATION OF WATERS AND
ENFORCEMENT OF THE PROVISIONS OF THIS
CODE
Article 79. The Administration and enforcement of the
provisions of this Code, including the granting of
permits and the imposition of penalties for
administrative violations hereof, are hereby vested in
the Council, and except in regard to those functions
which under this Code are specifically conferred upon
other agencies of the government, the Council is
hereby empowered to make all decisions and
determinations provided for in this Code.
Article 80. The Council may deputize any official or
agency of the government to perform any of its
specific functions or activities.
Article 81. The Council shall provide a continuing
program for data collection, research and manpower
development needed for the appropriation, utilization,

exploitation, conservation, and protection of the water

resources of the country.
Article 82. In the implementation of the provisions of
this code, the Council shall promulgate the necessary
rules and regulations which may provide for penalties
consisting of a fine not exceeding One Thousand
Pesos (P1,000.00) and/or suspension or revocation of
the water permit or other right to the use of water.
Violations of such rules and regulations may be
administratively dealt with by the Council.
Such rules and regulations prescribed by any
government agency that pertain to the utilization,
exploitation, development, control, conservation, or
protection of water resources shall, if the Council so
requires, be subject to its approval.
Article 83. The Council is hereby authorized to
impose and collect reasonable fees or charges for
water resources development from water
appropriators, except when it is for purely domestic
purposes.
Article 84. The Council and other agencies
authorized to enforce this Code are empowered to
enter upon private lands, with previous notice to the
owner, for the purpose of conducting surveys and
hydrologic investigations, and to perform such other
acts as are necessary in carrying out their functions
including the power to exercise the right of eminent
domain.
Article 85. No program or project involving the
appropriation, utilization, exploitation, development,
control, conservation, or protection of water resources
may be undertaken without prior approval of the
Council, except those which the Council may, in its
discretion, exempt.
The Council may require consultation with the public
prior to the implementation of certain water resources
development projects.
Article 86. When plans and specifications of a
hydraulic structure are submitted for approval, the
government agency whose functions embrace the
type of project for which the structure is intended,
shall review the plans and specifications and
recommended to the Council proper action thereon
and the latter shall approve the same only when they
are inconformity with the requirements of this Code
and the rules and regulations promulgated by the
Council. Notwithstanding such approval, neither the
engineer who drew up the plans and specifications of
the hydraulic structure, nor the constructor who built
it, shall be relieved of his liability for damages in case
of failure thereof by reason of defect in plans and

specifications, or failure due to defect in construction,

within ten (10) years from the completion of the
structure.
Any action recover such damages must be brought
within five (5) years following such failure.
Article 87. The Council or its duly authorized
representatives, in the exercise of its power to
investigate and decide cases brought to its
cognizance, shall have the power to administer oaths,
compel the attendance of witnesses by subpoena and
the production of relevant documents by subpoena
duces tecum.
Non-compliance of violation of such orders or
subpoena and subpoena duces tecum shall be
punished in the same manner as indirect contempt of
an inferior court upon application by the aggrieved
party with the proper Court of First Instance in
accordance with the provisions of Rules 71 of the
Rules of the Court.
Article 88. The Council shall have original jurisdiction
over all disputes to relating to appropriation,
utilization, exploitation, development, control,
conservation and protection of waters within the
meaning and context of the provisions of this Code.
The decisions of the Council on water rights
controversies shall be immediately executory and the
enforcement thereof may be suspended only when a
bond, in a amount fixed by the Council to answer for
damages occasioned by the suspension or stay of
execution, shall have been filed by the appealing
party, unless the suspension is virtue of an order of a
competent court.
All dispute shall be decided within sixty (60) days after
the parties submit the same for decision or resolution.
The Council shall have the power to issue writs of
execution and enforce its decisions with the
assistance of local or national police agencies.
Article 89. The decisions of the Council on water
rights controversies may be appealed to the Court of
First Instance of the province where the subject
matter of the controversy is situated within fifteen (15)
days from the date the party appealing receives a
copy of the decision, on any of the following grounds;
(1) grave abuse of discretion; (2) question of law; and
(3) questions of fact and law.
CHAPTER VIII
PENAL PROVISIONS

Article 90. The following acts shall be penalized by

suspension or revocation of the violator's water permit
or other right to the use of water and/or a fine of not
exceeding One Thousand Pesos (P1,000.00), in the
discretion of the Council:
(a)Appropriation of subterranean or ground
water for domestic use by an overlying
landowner without registration required by the
Council.
(b) Non-observance of any standard of
beneficial use of water.
(c) Failure of the appropriator to keep a record
of water withdrawal, when required.
(d) Failure to comply with any of the terms or
conditions in a water permit or a water rights
grant.
(e) Unauthorized use of water for a purpose
other than that for which a right or permit was
granted.
(f) Construction or repair of any hydraulic work
or structure without duly approved plans and
specifications, when required.
(g) Failure to install a regulating and
measuring device for the control of the volume
of water appropriated, when required.
(h) Unauthorized sale, lease, or transfer of
water and/or water rights.
(i) Failure to provide adequate facilities to
prevent or control diseases when required by
the Council in the construction of any work for
the storage, diversion, distribution and
utilization of water.
(j) Drilling of a well without permission of the
Council.
(k) Utilization of an existing well or ponding or
spreading of water for recharging
subterranean or ground water supplies without
permission of the Council.
(l) Violation of or non-compliance with any
order, rules, or regulations of the Council.
(m) Illegal taking or diversion of water in an
open canal, aqueduct or reservoir.

(n) Malicious destruction of hydraulic works or

structure valued at not exceeding P5,000.00.
Article 91. A. A fine of not exceeding Three
Thousand Pesos (P3,000.00) or imprisonment for not
more than three (3) years, or both such fine and
imprisonment, in the discretion of the Court, shall be
imposed upon any person who commits any of the
following acts:
1. Appropriation of water without a
water permit, unless such person is
expressly exempted from securing a
permit by the provisions of this Code.
2. Unauthorized obstruction of an
irrigation canal.
3. Cultivation of a river bed, sand bar
or tidal flat without permission.
4. Malicious destruction of hydraulic
works or structure valued at not
exceeding Twenty-Five Thousand
Pesos (P25,000.00).
B. A fine exceeding Three Thousand Pesos
P3,000.00) but not more than Six Thousand
Pesos P6,000.00) or imprisonment exceeding
three (3) years but not more than six (6)
years, or both such fine and imprisonment in
the discretion of the Court, shall be imposed
on any person who commits any of the
following acts:
1. Distribution for public consumption
of water which adversely affects the
health and safety of the public.
2. Excavation or enlargement of the
opening of a hot spring without
permission.
3. Unauthorized obstruction of a river
or waterway, or occupancy of a river
bank or seashore without permission.
4. Establishment of a cemetery or a
waste disposal area near a source of
water supply or reservoir for domestic
municipal use without permission.
5. Constructing, without prior
permission of the government agency
concerned, works that produce
dangerous or noxious substances, or
performing acts that result in the

introduction of sewage, industrial

waste, or any substance that pollutes
a source of water supply.
6. Dumping mine tailings and
sediments into rivers of waterways
without permission.
7. Malicious destruction of hydraulic
works or structure valued more than
Twenty-Five Thousand Pesos
(P25,000.00) but at not exceeding
One Hundred Thousand Peso
(100,000.00).
C. A fine exceeding Six Thousand Pesos
(P6,000.00) but not more than Ten Thousand
Pesos (P10,000.00) or imprisonment
exceeding six (6) years but not more than
twelve (12) years, or both such fine and
imprisonment, in the discretion of the Court,
shall be imposed upon any person who
commits any of the following acts:
1. Misrepresentation of citizenship in
order to qualify for water permit.
2. Malicious destruction of a hydraulic
works or structure, valued at more
than One Hundred Thousand Pesos
(P100,000.00).

punishable by a fine exceeding Three Thousand

Pesos (P3,000.00) but not more than Six Thousand
Pesos (P6,000.00) or an imprisonment exceeding
three (3) years but not more than six (6) years, or
both such fine and imprisonment, shall prescribe in
seven (7) years; and those punishable by a fine
exceeding Six Thousand Pesos (P6,000.00) but not
more than Ten Thousand Pesos (P10,000.00) or an
imprisonment exceeding six (6) years but not more
than twelve (12) years, or both such fine and
imprisonment, shall prescribe in ten (10) years.
CHAPTER IX
TRANSITORY AND FINAL PROVISIONS
Article 95. Within two (2) years from the promulgation
of this Code, all claims for a right to use water existing
on or before December 31, 1974 shall be registered
with the Council which shall confirm said rights in
accordance with the provisions of this Code, and shall
set their respective priorities.
When priority in time of appropriation from a certain
source of supply cannot be determined, the order of
preference in the use of the waters shall be as
follows:
(a) Domestic and municipal use
(b) Irrigation
(c) Power generation

Article 92. If the offense is committed by a

corporation, trust, firm, partnership, association or any
other juridical person, the penalty shall be imposed
upon the President, General Manager, and other
guilty officer or officers of such corporation, trust firm,
partnership, association or entity, without prejudice to
the filing of a civil action against said juridical person.
If the offender is an alien, he shall be deported after
serving his sentence, without further proceedings.
After final judgment of conviction, the Court upon
petition of the prosecution attorney in the same
proceedings, and after due hearing, may, when the
public interest so requires, order suspension of or
dissolution of such corporation, trust, firm,
partnership, association or juridical person.
Article 93. All actions for offenses punishable under
Article 91 of this Code shall be brought before the
proper court.
Article 94. Actions for offenses punishable under this
Code by a fine of not more than Three Thousand
Pesos (P3,000.00) or by an imprisonment of not more
than three (3) years, or both such fine and
imprisonment, shall prescribe in five (5) years; those

(d) Fisheries
(e) Livestock raising
(f) Industrial use, and
(g) Other uses.
Any claim not registered within said period shall be
considered waived and the use of the water deemed
abandoned, and the water shall thereupon be
available for disposition as unappropriated waters in
accordance with the provisions of this Code.
Article 96. No vested or acquired right to the use of
water can arise from acts or omissions which are
against the law or which infringe upon the rights of
others.
Article 97. Acts and contract under the regime of old
laws, if they are valid in accordance therewith, shall
be respected, subject to the limitations established in
this Code. Any modification or extension of these acts

and contracts after the promulgation of this Code,

shall be subject to the provisions hereof.
Article 98. Interim rules and regulations promulgated
by the Council shall continue to have binding force
and effect, when not in conflict with the provisions of
this Code.
Article 99. If any provision or part of this Code, or the
application thereof to any person or circumstance, is
declared unconstitutional or invalid for any reason, the
other provisions or parts therein shall not be affected.
Article 100. The following laws, parts and/or
provisions of laws are hereby repealed:
(a) The provisions of the Spanish Law on
Waters of August 3, 1866, the Civil Code of
Spain of 1889 and the Civil Code of the
Philippines (R.A. 386) on ownership of waters,
easements relating to waters, use of public
waters and acquisitive prescription on the use
of waters, which are inconsistent with the
provisions of this Code;
(b) The provisions of R.A. 6395, otherwise
known as the Revised Charter of National
Power Corporation, particularly section 3,
paragraph (f), and section 12, insofar as they
relate to the appropriation of waters and the
grant thereof;
(c) The provisions of Act No. 2152, as
amended, otherwise known as the Irrigation
Act, section 3, paragraphs (k) and (m) of P.D.
No. 813, R.A. 2056; Section 90, C.A. 137;
and,
(d) All Decree, Laws, Acts, parts of Acts, rules
of Court, executive orders, and administrative
regulations which are contrary to or
inconsistent with the provisions of this Code.
Article 101. This Code shall take effect upon its
promulgation.
Done in the City of Manila, this 31st day of December,
Nineteen Hundred and Seventy-Six.