Philippine Public School Teachers' Association (PPSTA)

March 14, 1988 Philippine Public School Teachers' Association (PPSTA) 245-249 Banawe Street Quezon City Gentlemen : This refers to your letter, dated November 20, 1987, requesting the opinion of this Commission on the query posed therein. A perusal of the articles of incorporation of PPSTA on file with this Commission shows that said non-stock; association was organized to advance and promote the interest and welfare of the school teachers. Your query is, in the light of L.O.I. Nos. 860 and 1493, may PPSTA accept deposits from the members, at specified rates of interest, for purposes of relending to other members under such terms and conditions as provided for in the L.O.I.s? L.O.I. 860 issued by former President Ferdinand E. Marcos seemingly acknowledges PPSTA as a mutual benefit association when it stated under the prefatory paragraph thereof that PPSTA "performs welfare services vital to the morale of the public school teachers from funds derived from authorized deductions against their salaries, which fund now constitutes Mutual Aid System (MAS), the Mutual Financial Assistance System (MFAS), and Mutual Retirement Benefit System (MRBS), all managed and operated by said association". L.O.I. 1493, issued on December 10, 1986, by then President Marcos, directed a program of government assistance to rehabilitate PPSTA. It authorized the release of P25M from the Casino Fund, as a five-year, interest free deposit with PPSTA. The money to the extent of P6M shall be used to settle arrears in members' claims against the Mutual Aid System, Mutual Financial Assistance System, and the Mutual Retirement Benefit System, and the balance of P19M, to finance a special lending program to PPSTA members who are in the government service in accordance with the guidelines agreed upon between the PPSTA and the Minister of Education, Culture and Sports. In this connection, it was expressly stipulated that five years after receipt of funds and unless the extension of the loan by another five years is approved by the President, the original amount borrowed shall be repaid to the Casino Fund, and any surplus accumulated out of Fund earnings shall accrue to the General Fund of PPSTA. As such, amounts transferred to the PPSTA General Fund may be used to assist in covering benefits payments or to augment PPSTA reserved and thus, for regular lending purposes. Likewise, L.O.I. 1493 authorized the release on January 1986 the full amount of P20M appropriated in the 1986 General Appropriations Act earmarked as investment outlay for Sariling Sikap projects. It authorized the Minister of Education, Culture and Sports, "to deposit the said funds with PPSTA for relending to teachers and education support personnel still in the service, under such terms and conditions as may be agreed upon by the Minister and PPSTA." This funds shall be held in trust by PPSTA for an initial period of five years as the MECS "Sariling Sikap Fund". LibLex Under the 1973 Constitution, letters of instruction issued by the incumbent President shall form part of the law of the land and shall remain valid, legal, binding and effective unless modified, revoked or superseded by subsequent instructions or other acts of the incumbent President, or unless expressly or explicitly modified or repealed by the regular National Assembly. (Sec. 3, par. 2, Art. XVII). In the same manner, the present Constitution reads that all existing letters of instructions and other executive issuances not inconsistent with the Constitution shall remain operative until amended, repealed or revoked. (Sec. 3, Art. XVIII). L.O.I. 860 and 1493, apparently vesting the PPSTA with the authority to operate as a mutual benefit association, and to pursue lending activities to its members shall be read into the charter or articles of incorporation of the Association . Hence, PPSTA may continue to undertake such activities as may be authorized under L.O.I.s 860 and 1493 until said instructions are repealed or revoked. It has to be stated in relation to your query that L.O.I.s 860 and 1493 have not authorized the PPSTA to accept deposit from members at specified rate of interest, for relending to other members as the activity is understood under RA 3779, otherwise known as the "Savings and Loan Association Act". Savings and loan association is a "corporation engaged in the business of accumulating the savings of its members or stockholders, and using such accumulations, together with its capital in the case of stock corporation, for loans and/or for investment in the securities of productive enterprises or in securities of the Government, or any of its political subdivisions, instrumentalities or corporations. Provided, That they shall be primarily engaged in servicing the needs of household by providing personal finance and long term financing for home building and development." (Sec. 2, a, RA 3779). In this connection, there is transmitted to you herewith, a xeroxed copy of the return indorsement of the Central Bank to this Commission, dated February 15, 1988, stating that the articles of incorporation and by-laws of PPSTA do not seem to have contemplated said PPSTA as a savings and loan association under RA 3779. It is well settled that a corporation has only such powers as are expressly granted in its charter or in the statutes under which it is created or such powers as are necessary for the purpose of carrying out its express powers. (13 Am. Jur.,sec. 739).Likewise, only such powers as are reasonably necessary to enable the corporation to carry out the express powers granted and the purposes of its creation are to be implied as are to be deemed incidental. Powers merely convenient or useful are not implied if they are not essential having in view the nature and object of incorporation. (Am. Jur. sec. 740). Please be guided accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Chairman