Hon. Gilberto Duavit

December 9, 1981 Hon. Gilberto Duavit President National Youth and Sports Development Foundation of the Philippines c/o Malacaang Palace Manila Dear Sir: This pertains to your letter-query dated 20 August 1981 regarding the National Youth and Sports Development Foundation of the Philippines (NYSDFP), created under PD No. 1289 dated January 25, 1978, in relation to the Rodriguez Sports Center of Metro Manila. cdll It appears from your letter that almost a decade ago, the provincial government of Rizal and the municipal government of Marikina built the Rodriguez Sports Center in said town in order to create citizens of bright mind and proper brawn. The provincial government capitalized all the vertical improvement while the municipality provided for the land. They subsidized the operations and maintenance of the center through direct budgetary support amounting to P2,000,000.00 per annum, more or less. But with the advent of martial law and the political reorganization or restructuring of the municipality, the Metro Manila Commission now directly supervised the municipality of Marikina. The province of Rizal, owner of a bigger portion of the assets, and the town of Marikina suffered drastically-diminished income, thereby depleting the required subsidies and the center suffered from lack of funds and immediate cash inflow to effect necessary repairs and projected expansion to maximize utilization in order to service national, regional and even international competitions. Moreover, through PD No. 1289 dated 25 January 1978, Pres. Ferdinand E. Marcos created the National Youth and Sports Development Foundation of the Philippines (NYSDFP) with the tasks, inter alia, of undertaking construction of, development and maintenance of sports complexes and recreational centers and facilities for youth activities, projects and programs, to encourage and assist organization of youth and sports groups, association and societies, and to undertake such projects and activities as may be necessary or incidental to the attainment of its general objective. You further mentioned in your letter that the first proposal was to transfer the management and subsidy to the Ministry of Youth and Sports Development (MYSD), but the same was thumbed down because the Ministry suffers from lack of budgetary resources similarly suffered by the province of Rizal and the Municipality of Marikina. However, the latest proposal of the provincial and municipal officials, subject to the approval of higher authorities, is to organize the Rizal Youth and Sports Development Foundation (RYSDF) as a regional satellite of the NYSDFP, to which the present owners (Provincial of Rizal and Municipality of Marikina) will assign all its assets. The Foundation shall be 100% government-owned, non-stock, non-profit, and that all incomes shall be utilized for the purposes above-mentioned, and in the event of dissolution, Section 13 of PD No. 1289 shall apply. To ensure necessary development funding, the foundation shall involve the private sector as sustaining members, from whom membership subscription will be sold and monthly dues collected, and to assure correct management, it shall either organize a management group to develop, operate and maintain the facilities, or engage the services of an already existing independent management unit. Said proposals appear to be acceptable to all concerned as it will relieve the national and local governments of their pecuniary exposure and at the same time achieve the vigorous and noble objective/projects of youth and sports development. You are therefore seeking advice and guidance relative to the legality of the latest proposal (supra). Please be informed that the proposed Rizal Youth and Sports Development Foundation (RYSDF) may not be formed under the Corporation Code of the Philippines (Batas Pambansa Blg. 68), but only under a special law (PD or BP) similar to or as an amendment of PD No. 1289, considering that the National Youth and Sports Development Foundation of the Philippines (NYSDFP) intends to make RYSDF a regional satellite. There is also the possibility that there is no need to form a new corporate body or foundation because PD 1289 vests the NYSDFP with sufficient authority among others to handle the affairs of sports complexes like the Rodriguez Sports Center. (a) Legal Impediment under the Corporation Code The proposed RYSDF may not be established or organized as a non-stock, non-profit corporation under the Corporation Code because Section 88 thereof does not enumerate "recreational", "sports", "athletic" or words of similar import as one of the purposes for which a non-stock non-profit corporation may be formed. Please note that the term "recreational", etc., appeared in the original draft of the proposed Corporation Code, but the same was intentionally deleted by the assemblymen because they subscribed to the belief that most non-stock recreational corporations do not pay taxes and their inaccessibility to the lower strata of society only widens the veritable gap between the rich and the poor (Cf. IPB Proceedings). Considering that the proposed RYSDF is patently for sports, athletic or recreational purposes, then it certainly comes within the purview of the prohibition/policy of the lawmakers. It may not therefor be organized as non-stock corporation, but only as a stock corporation, under the Corporation Code. (b) Special charter is needed : The proposed RYSDF may be formed under a special charter or law so that it can absorb the properties and facilities of the present Rodriguez Sports Center and manage the same, similar to the power of NYSDFP under PD No. 1289. The proposed charter can give a special budget to RYSDF and allow the management thereof to collect membership and/or entrance fee and can even undertake membership drives for the purpose of accumulating sufficient funds for the immediate repairs and necessary expansion of the center. prcd (c) Amendment of PD 1289 is also tenable : RYSDF may also be formed through an amendment of PD No. 1289 in the sense that said amendment may allow the NYSDF to form regional groups or branches or satellites which would absorb existing but hardly viable sports complexes in the regions around the Philippines like the Rodriguez Sports Center. This amendment is necessary because PD No. 1289 does not expressly grant NYSDFP such powers. This Commission therefore believes that there is really no urgent necessity to form a new corporate body like the proposed NYSDF. Secondly, PD 1289 grants NYSDFP sufficient powers to handle the affairs of the Rodriguez Sports Center. Please note that Section 4 thereof grants the NYSDFP the power to lease existing properties or facilities for the purpose of securing or promoting the objectives for which it was created. The Commission further opines that there is no legal impediment for the Province of Rizal and the Municipality of Marikina to let their facilities for a nominal fee so that NYSDF can run and manage the same to accomplish its purposes. After the lease, it can start membership drives for the proposed renovation and repairs of the Rodriguez Center and also for its maintenance. However, for a final determination of the question propounded by your goodself, this letter may be referred/endorsed to the Ministry of Justice, as it involves a special law. Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner