Corporations shall promulgate and adopt its corporate governance rules and principles in accordance with this Code. Said rules shall be in manual form and available as reference by the directors. It shall be submitted to the Commission, which shall evaluate the same and their compliance with this Code taking into account the size and nature of business. The said manual shall be available for inspection by any stockholder of the corporation at reasonable hours on business days. The Chairman of the Board shall be specifically tasked with the responsibility of ensuring adherence to the corporate governance code and practices.

Unless mandated by law, other corporations are likewise encouraged to observe this Circular in the absence of any mandated corporate governance rules adopted by other agencies.

IX. Administrative Sanction

Failure to adopt a manual of corporate governance as specified therein shall subject a corporation, after due notice and hearing, to a penalty of P100,000.00.

X. Transitory Provision

All corporations affected by this Code shall submit their manual by July 1, 2002 to be effective January 1, 2003. A model manual will be drafted by the Commission and will be available by May 15, 2002 in the SEC web page.

XI. Effective Date

This Memorandum Circular shall take effect after fifteen (15) days from publication in a newspaper of general circulation.