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By virtue of the powers vested in me by the Constitution and Articles I and III of the National Defense Act, and in order to provide for the authoritative coordination and unified direction of all governmental functions and activities relating to the national security and to the preparation and execution of national mobilization plans and policies, I, RAMON MAGSAYSAY, President of the Philippines, do hereby order:

SECTION 1. National Security Council.- a. The Council of National Defense established under Section 6 of the National Defense Act, and as organized by Executive Order No. 330, dated July 1, 1950, which named it as the National Security Council, shall have the following functions:

(1) To advise the President with respect to the integration of domestic, foreign and military policies relating to the national security so as to enable the armed services and the other departments and agencies of the Government to cooperate more effectively in matters involving the national security;

(2) To assess and appraise the objectives, commitments and risks of the Philippines in relation to our actual and potential military power, in the interest of national security, for the purpose of making recommendation to the President in connection therewith;

(3) To consider policies on matters of common interest to the departments and agencies of the Government concerned with the national security, and to make recommendation to the President in connection therewith;

(4) To advise the President concerning the coordination of military, industrial and civilian mobilization, including –

(a) policies concerning industrial and civilian mobilization in order to assure the most effective mobilization and maximum utilization of the nation’s manpower in the event of war;

(b) programs for the effective use in time of war of the nation’s natural and industrial resources for military and civilian needs, for the maintenance and stabilization of the civilian economy in time of war, and for the adjustment of such economy to war needs and conditions;

(c) policies for unifying, in time of war, the activities of Government agencies and departments engaged in or concerned with production, procurement, distribution, or transportation of military or civilian supplies, materials and products;

(d) the relationship between potential supplies of, and potential requirements for, manpower, resources and productive facilities in time of war;

(e) policies for establishing adequate reserves of strategic and critical material and for the conservation of these resources;

(f) the strategic relocation of industries, services, and government and economic activities, the continuous operation of which is essential to the nation’s security.

b. In addition to the above functions, the Council shall, under the direction and on behalf of the President –

(1) prepare and maintain at all times plans for the effective mobilization in time of war of the nation’s financial, industrial, economic and manpower resources and forces;

(2) direct, control and coordinate all mobilization activities and functions of the executive branch of the Government, including but not limited to production, procurement, manpower, stabilization, communications and transport activities and functions;

(3) direct and control the operational functions and activities of the National Intelligence Coordinating Agency;

(4) perform such other functions and duties as the President may direct as necessary and proper for the national security.

SEC. 2. a. The Council shall have a permanent staff to assist it in the performance of its functions and duties. The staff shall be composed of the permanent Secretary of the Council, as head, and not more than five Assistants who shall he permanently detailed thereto from such offices, branches or agencies of the Executive Department as the President may direct. Until otherwise provided by law and appropriations for this purpose, the Secretary and his Assistants shall continue to receive their compensation from the executive office, bureau, or agency from which they are detailed.

b. The Secretary of the Council is hereby authorized to appoint and fix the salaries of such personnel as may be necessary to enable the staff to perform the duties and functions required by the Council, subject to the availability of funds for this purpose.

c. In performing its functions, the Council shall utilize to the maximum extent the facilities and resources of the departments and agencies of the Government.

SEC. 3. National Intelligence Coordinating Agency. a. For the purpose of coordinating the intelligence activities of the several Government departments and agencies in the interest of national security, the National Intelligence Coordinating Agency, including the Coordinator of National Intelligence, shall hereafter perform the following duties and functions under the operational direction and control of the National Security Council:

(1) To advise the National Security Council in matters concerning such intelligence activities of the Government departments and agencies as relate to national security;

(2) To make recommendations to the National Security Council for the coordination of such intelligence activities of the departments and agencies of the Government as relate to the national security;

(3) To correlate and evaluate intelligence relating to the national security, and provide for the appropriate dissemination of such intelligence within the Government, using, where appropriate, existing agencies and facilities: Provided, That the Agency or its personnel shall have no police, subpoena, law-enforcement powers, or internal-security functions: Provided, further, That the departments, and other agencies of the Government shall continue to collect, evaluate, correlate, and disseminate departmental intelligence: And provided, further, That the Coordinator of National Intelligence shall be responsible for protecting intelligence sources and methods from unauthorized disclosure;

(4) To perform, for the benefit of the existing intelligence agencies, such additional services of common concern as the National Security Council determines can be more efficiently accomplished centrally;

(5) To perform such other functions and duties related to intelligence affecting the national security as the National Security Council may from time to time direct, subject to the approval of the President.

b. To the extent recommended by the National Security Council and approved by the President, such intelligence of the departments and agencies of the Government as relates to the national security shall be open to the inspection of the Coordinator of National Intelligence; and such intelligence as relates to the national security and is possessed by such departments and other agencies of the Government shall be made available to the Coordinator of National Intelligence for correlation, evaluation and dissemination.

c. For administrative purposes, the National Intelligence Coordinating Agency, including the Coordinator of National Intelligence, shall be directly under the Office of the President.

SEC. 4. a. Any commissioned officer of the Armed Forces of the Philippines on active duty who is appointed as Secretary or Assistant Secretary of the National Security Council, or as Coordinator of National Intelligence, shall –

(1) in the performance of his duties under this Order, be subject to no authority, control, supervision, restriction or prohibition (military or otherwise) other than would be operative with respect to him if he were a civilian in no way connected with the Department of National Defense or the Armed Forces of the Philippines or any component thereof;

(2) not possess or exercise any authority, control, supervision, powers, functions or duties (other than such as he possesses, or is authorized or directed to exercise, under this Order) with respect to the Department of National Defense or the Armed Forces of the Philippines or any component thereof.

b. Except as provided in subsection a, the appointment and service of a commissioned officer of the Armed Forces of the Philippines as Secretary or Assistant Secretary of the National Security Council, or as Coordinator of National Intelligence, shall in no way affect the military status, office, rank or grade he may occupy or hold in the military service, or any emoluments, allowances, right, privilege or benefit incident to or arising out of his military office or status. Any such commissioned officer shall, while serving in any of the offices hereinabove provided, receive – (1) from the appropriations for the Armed Forces, the military pay and allowances payable to him by virtue of his military status; and (2) from funds appropriated for the expenses of the Council or the Agency, as the case may be, the amount by which the monthly compensation which may now or hereafter be provided for the civilian position exceeds his monthly military pay and allowances.

SEC. 5. Funds for the operation of the National Security Council and the National Intelligence Coordinating Agency shall hereafter be included in the annual general appropriations for the Office of the President.

SEC. 6. The provisions of Executive Order No. 235, dated July 1, 1949, which are inconsistent with this Order, are hereby repealed or modified accordingly.

Done in the City of Manila this 20th day of May, in the year of Our Lord, nineteen hundred and fifty-four, and of the Independence of the Philippines, the eighth.

(Sgd.) RAMON MAGSAYSAY
President of the Philippines

By the President:
(Sgd.) FRED RUIZ CASTRO
Executive Secretary