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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 972
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PRESIDENTIAL DECREE NO. 972 -
PROMULGATING AN ACT TO PROMOTE AN ACCELERATED EXPLORATION, DEVELOPMENT,
EXPLOITATION, PRODUCTION AND UTILIZATION OF COAL
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chanroblesvirtualawlibrary
WHEREAS,
the increasing cost of imported crude oil imposes an unduly heavy
demand on the country's international reserves thereby making it
imperative for the government to pursue actively the exploration,
development and exploitation of indigenous energy resources; chanroblesvirtualawlibrary
WHEREAS, while coal has been identified as a fossil fuel known to exist
in mineable quantities in the country which could provide a viable
energy source for some vital industries, large tracts of coalbearing
lands have not been explored and mined in a manner and to an extent
adequate to meet the needs of the economy;chanroblesvirtualawlibrary
WHEREAS, the proliferation of fragmented coal permits and leases has
prevented, or deterred, the adequate and speedy exploration,
development, exploitation and production of indigenous coal resources;chanroblesvirtualawlibrary
WHEREAS, to develop, achieve and implement a well-planned, systematic
and meaningful exploration, development, exploitation and production of
local coal resources, participation of the private sector with
sufficient capital, technical and managerial resources must be
encouraged and the technical and financial capabilities of the coal
industry upgraded;chanroblesvirtualawlibrary
WHEREAS, hand in hand with an accelerated coal exploration,
development, exploitation and production program, it is essential that
the market for domestic coal production be developed by granting
incentives to prospective coal users to convert their facilities for
coal utilization;chanroblesvirtualawlibrary
WHEREAS, to realize the above, it is necessary to amend and/or
supplement existing legislation relating to coal;chanroblesvirtualawlibrary
WHEREAS, Article XVII, Section 12 of the Constitution of the
Philippines provides in part that when the National interest so
requires the incumbent President of the Philippines or the interim
Prime Minister may review all contracts, concessions, permits or other
forms or privileges for the exploration, development, exploitation or
utilization of natural resources entered into, granted, issued or
acquired before the ratification of the Constitution;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the powers vested
in me by the Constitution of the Philippines, do hereby decree and
declare as part of the law of the land the following:cralaw:red
Section 1. Short Title. — This Act shall be known and
may be cited as "The Coal Development Act of 1976."
Section 2. Declaration of Policy. — It is hereby
declared to be the policy of the state to immediately accelerate the
exploration, development, exploitation production and utilization of
the country's coal resources. A coal development program is therefore
promulgated and established by this Decree. chanroblesvirtualawlibrary
Section 3. Coal Development Program. — The country
shall be divided into coal regions and exploration and exploitation
programs shall be instituted and implemented pursuant to this Decree.
These programs shall be geared towards the promotion and development of
the necessary technical and financial capability to undertake a work
program to effectively explore exploit coal resources.
In recognition, however, of the social constraints that may be
encountered in effecting the establishment of coal units in regions
where there is high concentration of small coal miners, a special coal
program shall be formulated and implemented in coordination with the
appropriate government agency/agencies to meet the particular needs of
such regions.
Section 4. Government to Undertake Coal Exploration
Development and Production. — The Government, through the Energy
Development Board, its successors or assigns, shall undertake by itself
the active exploration, development and production of coal resources.
It may also execute coal operating contracts as hereafter defined. The
active exploration and exploitation of coal resources by the Government
or through coal operating contracts may cover public lands, any
unreserved or unappropriated coal bearing lands, claims located and
recorded by private parties areas covered by valid and subsisting coal
revocable permits, coal leases and other existing rights granted by the
Government for the exploration and exploitation of coal lands,
government mineral reservations, coal areas/mines whose leases or
permits are presently owned or operated or held by government-owned or
controlled corporations and coal mineable areas operated or held by
government agencies.
Section 5. Blocking System. — The Energy Development
Board shall establish coal regions delimiting its extent and boundaries
after taking into consideration the various coal bearing lands of the
Philippines. Each coal region shall be divided into meridional blocks
or quadrangles of two minutes (2') of latitude and one and one-half
minutes (1-1/2) of longitude, each block containing an area of one
thousand (1,000) hectares, more or less, the boundaries thereof to
coincide with the full two minutes and one and one-half minutes of
latitude and longitude, respectively, based on the Philippine Coast and
Geodetic Survey Map, scale of 1:50,000.
Section 6. Coal Contract Area. — In conformity with
the blocking system herein established, the Energy Development Board
shall determine in each coal region what areas, are available for coal
operating contracts. In opening such contract areas, the Energy
Development Board may resort to either of the following alternative
procedures:cralaw:red
a. By offering an area or areas for bids, specifying
the minimum requirements and conditions in accordance with this Decree:
or chanroblesvirtualawlibrary
b. By negotiating with a qualified party for a coal
operating contract under the terms and conditions provided in this
Decree.
No person shall be entitled to more than fifteen (15) blocks of coal
lands in any one coal region.
Section 7. Existing Permittees/Leaseholders. — All
valid and subsisting holders of coal revocable permits, coal leases and
other existing rights granted by the government for the exploration and
exploitation of coal lands or the operators thereof duly approved by
the appropriate government agency, shall be given preference in the
grant of coal operating contract over the area covered by their
permits, leases or other rights subjects to their compliance with the
following conditions and guidelines:cralaw:red
a) Those whose areas fall within a block as described
in Section 5 hereof shall organize or consolidate themselves into a
coal unit, singly or jointly with valid and subsisting holders of coal
revocable permits, coal leases and other existing coal rights or the
duly approved operator thereof, of contiguous blocks provided that a
coal unit shall not be entitled to more than fifteen (15) blocks of
coal lands in any coal region.
b) Consolidation of areas into coal unit which shall
require approval by the Energy Development Board must be completed
within a period of six (6) months from the effectivity of this Decree.
c) In order to qualify for consolidation into coal
units, permittees, leaseholders or operators must have complied with
the requirements of their existing permits, leases and/or rights as
defined under existing laws, rules and regulations.
d) Members of the coal unit shall agree on the form,
terms and extent of participation of its individual members. All
holders of valid and subsisting coal revocable permits, coal leases and
other existing rights granted by the government for the exploration,
development and exploitation of coal lands shall be given percentage
interest in the unit or payments out of production under such terms and
conditions as may be agreed by the members of the unit and approved by
the Energy Development Board.
e) A coal unit shall enter into a coal operating
contract as hereafter provided within six (6) months from its formation.
Coal revocable permits, coal leases and other existing rights granted
by the government for the exploration and exploitation of coal lands
shall be deemed automatically cancelled and the area covered thereby
shall revert back to the State for failure of the holders or the
qualified operators thereof for any cause whatsoever to consolidate
their areas into coal units or secure a coal operating contract within
the period specified in this section.
Section 8. Coal Operating Contract. — Each coal
operating contract herein authorized shall, subject to the approval of
the President, be executed by the Energy Development Board.
In a coal operating contract, service, technology and financing are
furnished by the operator for which it shall be entitled to the
stipulated fee and reimbursement of operating expenses. Accordingly,
the operator must be technically competent and financially capable as
determined by the Energy Development Board to undertake the coal
operations as required in the contract.
Section 9. Obligations of Operator in Coal Operating
Contract. — The operator under a coal operating contract shall
undertake, manage and execute the coal operations which shall
include: chanroblesvirtualawlibrary
a) The examination and investigation of lands
supposed to contain coal, by detailed surface geologic mapping, core
drilling, trenching, test pitting and other appropriate means, for the
purpose of probing the presence of coal deposits and the extent thereof;chanroblesvirtualawlibrary
b) Steps necessary to reach the coal deposits so that
can be mined, including but not limited to shaft sinking and
tunnelling; and
c) The extraction and utilization of coal deposits.
The Government shall oversee the management of operation contemplated
in the coal operating contract and in this connection, shall require
the operator to:cralaw:red
a) Provide all the necessary service and technology;chanroblesvirtualawlibrary
b) Provide the requisite financing;chanroblesvirtualawlibrary
c) Perform the work obligations and program
prescribed in the coal operating contract which shall be less than
those prescribed in this Decree;chanroblesvirtualawlibrary
d) Operate the area on behalf of the Government in
accordance with good coal mining practices using modern methods
appropriate for the geological conditions of the area to enable maximum
economic production of coal, avoiding hazards to life, health and
property, avoiding pollution ofr, land and waters, and pursuant to an
efficient and economic program of operation;chanroblesvirtualawlibrary
e) Furnish the Energy Development Board promptly with
all information, data and reports which it may require;chanroblesvirtualawlibrary
f) Maintain detailed technical records and account of
its expenditures;chanroblesvirtualawlibrary
g) Maintain detailed technical records and account of
safety demarcation of agreement acreage and work areas,
non-interference with the rights of the other petroleum, mineral and
natural resources operators;chanroblesvirtualawlibrary
h) Maintain all necessary equipment in good order and
allow access to these as well as to the exploration, development and
production sites and operations to inspectors authorized by the Energy
Development Board;chanroblesvirtualawlibrary
i) Allow representatives authorized by the Energy
Development Board full access to their accounts, books and records for
tax and other fiscal purposes;chanroblesvirtualawlibrary
On the other hand, the Energy Development Board shall:cralaw:red
a) On behalf of the Government, reimburse the
operator for all operating expenses not exceeding seventy per cent
(70%) of the gross proceeds from production in any year; Provided, that
if in any year, the operating expenses exceed seventy per cent (70%) of
the gross proceeds from production, then the unrecovered expenses shall
be recovered from the operating of succeeding years. Operating expenses
means the total expenditures for coal operating incurred by the
operator as provided in a coal operating contract;chanroblesvirtualawlibrary
b) Pay the operator a fee, the net amount of which
shall not exceed forty per cent (40%) of the balance of the gross
income after deducting all operating expenses;chanroblesvirtualawlibrary
c) Reimburse operating expenses and pay the
operator's fee in such form and manner as provided for in the coal
operating contract. chanroblesvirtualawlibrary
Section 10. Additional Fee. — All valid and
subsisting holders of coal revocable permits, coal leases and other
existing rights granted by the government for the exploration and
exploitation of coal lands or the duly qualified operators thereof who
have organized their area into a coal unit may, subject to conditions
imposed by the Energy Development Board, be granted in the coal
operating contract, in addition to the face provided in Paragraph 2 of
Section 9, a special allowance, the amount of which shall not exceed
thirty per cent (30%) of the balance of the gross income after
deducting all operating expenses.
Coal operating contracts entered into with Philippine citizens or
corporations except those already covered under the preceding
paragraph, shall be granted a special allowance, the amount of which
shall not exceed twenty per cent (20%) of the balance of the gross
income after deducting all operating expenses; Provided, that coal
operating contracts in which Philippine citizens or corporations have a
minimum participating interest of fifteen per cent (15%) in the
contract area, may subject to reasonable conditions imposed by the
Energy Development Board, be granted a special allowance not exceeding
ten per cent (10%) of the balance of the gross income after deducting
all operating expenses.
For the purpose of this section, a Philippine corporation means a
corporation organized under Philippine laws at least sixty per cent
(60%) of the capital of which, including the voting shares, is owned
and held by citizens of the Philippines.
Section 11. Minimum Terms and Conditions. — In
addition to those elsewhere provided in this Decree, every coal
operating contract executed in pursuance hereof shall contain the
following minimum terms and conditions:cralaw:red
a) Every operator shall be obliged to spend in direct
prosecution of exploration work not less than the amounts provided for
in the coal operating contract and these amounts shall not be less than
the total obtained by multiplying the number of coal blocks or fraction
thereof covered by the contract by One Million Pesos (P1,000,000.00)
per block annually; Provided, that if the area or a portion thereof is
suitable for open pit mining as determined jointly by the operator and
the Energy Development Board, the minimum expenditure requirement
herein provided may be reduced up to Two Hundred Thousand Pesos
(P200,000.00) per block annually. From the time coal reserves in
commercial quantity have been determined jointly by the operator and
the Energy Development Board, the operator shall undertake development
and production of the contract area within the period agreed upon in
the contract and shall be obliged to spend in the development and
production of the contract area an amount which shall be determined by
negotiation between the operator and the Energy Development Board
taking into account factors such as measured reserves, quality of coal,
mining method and location and accessibility to market; Provided,
further, that if during any contract year the operator shall spend more
than the amount of money required to be spent, the excess may be
credited against the money required to be spent by the operator during
the succeeding years, except excess expenditures for exploration cannot
be credited against financial commitment for development and
production; Provided, further, that should the operator fail to comply
with the work obligations provided for in the coal operating contract,
it shall pay to the Government the amount it should have spent but did
not in direct prosecution of its work obligations; Provided, finally,
that except in case of open pit mining, the operator shall drill at
least thirty (30) holes per blocks and a minimum footage of exploratory
holes before the end of the exploration period as may be specified in
the coal operating contract. chanroblesvirtualawlibrary
b) The exploration period under every coal operating
contract shall be for two (2) years. If the operator has complied with
its exploration work obligations, the exploration period may be
extended for another two (2) years. The coal operating contract shall
lapse unless coal of commercial quantity is measured during the
exploration period or at the end thereof in any area covered by the
coal operating contract. If coal of commercial quantity is measured,
the coal operating contract shall remain in force for development and
production during the balance of the exploration period and/or for an
additional period ranging from ten (10) to twenty (20) years,
thereafter renewable for a series of three (3)-year periods not
exceeding twelve (12) years under such terms and conditions as may be
agreed upon by the parties.
c) All materials, equipment, plants and other
installations erected or placed on the exploration and/or production
area of a movable nature by the operator shall become properties of the
Energy Development Board if not removed therefrom within one (1) year
after the termination of the coal operating contract.
d) The operator shall be subject to the provisions of
laws of general application relating to labor, health, safety and
ecology insofar as they are not in conflict with the provisions
otherwise contained in this Decree.
Section 12. Full Disclosure of Interest in Coal
Operating Contract. — Interest held in the coal operating contract by
domestic mining companies and/or the latter's stockholders may be
allowed to any extent after full disclosure thereof and approved by the
Energy Development Board.
Section 13. Arbitration. — The Energy Development
Board may stipulate in a coal operating contract executed under this
Decree that disputes in the implementation thereof between the
Government and the operator may be settled by arbitration.
Section 14. Performance Guarantee. — In order to
guarantee compliance with the obligations of the operator executed
under this Decree, the operator shall post a bond or other guarantee of
sufficient amount in favor of the Government and with surety or
sureties satisfactory to the Energy Development Board, conditioned upon
the faithful performance by the operator of any or all of the
obligations under and pursuant to said coal operating contracts.
Section 15. Transfer and Assignment. — The rights and
obligations under a coal operating contract executed under this Decree
shall not be transferred or assigned without the prior approval of the
Energy Development Board; Provided, that such transfer or assignment
may be made only to a qualified person possessing the resources and
capability to continue the mining operation of the coal operating
contract and that the operator has complied with all the obligations of
the coal operating contract.
Section 16. Incentives to Operators. — The provisions
of any law to the contrary notwithstanding, a contract executed under
this Decree may provide that the operator shall have the following
incentives:cralaw:red
a) Exemption from all taxes except income tax;chanroblesvirtualawlibrary
b) Exemption from payment of tariff duties and
compensating tax on importation of machinery and equipment and spare
parts and materials required for the coal operations subject to the
following conditions:cralaw:red
1) that machinery, equipment, spare parts and
materials of comparable price and quality are not manufactured in the
Philippines;chanroblesvirtualawlibrary
2) that the same are directly and actually needed and
will be used exclusively by the operator in its operations or in
operation for it by a contractor;chanroblesvirtualawlibrary
3) That they are covered by shipping documents in the
name of the operator to whom the shipment will be delivered directly by
the customs authorities; and
4) that prior approval of the Energy Development
Board was obtained by the operator before the importation of such
machinery, equipment, spare parts and materials, which approval shall
not be unreasonably withheld; Provided, however, that the operator or
its contractor may not sell, transfer, or dispose of the machinery,
equipment, spare parts and materials without the prior approval of the
Energy Development Board and payment of taxes and duties thereon;
Provided, further, that should the operator or its contractor sell,
transfer, or dispose of these machinery, equipment, spare parts or
materials without the prior approval of the Energy Development Board,
it shall pay twice the amount of the taxes and duties thereon;
Provided, finally, that the Energy Development Board shall allow and
approved the sale, transfer or disposition of the said items without
tax if made:cralaw:red
(a) to another operator under a coal operating
contract;chanroblesvirtualawlibrary
(b) for reasons of technical obsolescence; or
(c) for purposes of replacement to improve and/or
expand the operation under the coal operating contract.
c) Accelerated Depreciation. — At the option of the
taxpayer and in accordance with the procedures established by the
Bureau of Internal Revenue, fixed assets owned by the coal units in the
performance of its coal operating contract may be:cralaw:red
1) Depreciated to the extent of not more than twice
as fast as normal rate of depreciated or depreciated at normal rate of
depreciation if expected life is ten (10) years or less; or
2) Depreciated over any number of years between five
(5) years and expected life if the latter is more than ten (10) years,
and the depreciation thereon allowed as a deduction from taxable
income; Provided, that the taxpayer notifies the Bureau of Internal
Revenue at the beginning of the depreciation period which depreciation
rate allowed by this section will be used by it.
d) Foreign Loans and Contracts. — The right to remit
at the prevailing exchange rate at the time of remittance of such sum
as may be necessary to cover principal and interest of foreign loans
and foreign obligations arising from technological assistance contracts
relating to the performance of the coal operating contract, subject to
Central Bank regulations.
e) Preference in Grant of Government Loans. —
Government financial institutions such as the Development Bank of the
Philippines, the Philippine National Bank, the Government Service
Insurance System, the Social Security System, the Land bank of the
Philippines and other government institutions as are now engaged or may
hereafter engage in financing on investment operations shall, in
accordance with and to the extent allowed by the enabling provisions of
their respective charters or applicable laws, accord high priority to
applications for financial assistance submitted by operators in the
performance of coal operating contracts, whether such financial
assistance be in the form of equity participation in preferred, common
or preferred convertible shares of stock, or in loans and guarantee,
and shall facilitate the processing thereof and the release of the
funds therefor. However, financial assistance under this paragraph
shall be extended only to operators which are Philippine Nationals as
the term is defined under Republic Act No. 5186, as amended.
f) Entry upon the sole approval of the Energy
Development Board which shall not be unreasonably withheld of alien
technical and specialized personnel (including the immediate members of
their families) who may exercise their profession only for the
operation of the operator as prescribed in its coal operating contract
with the government under this Decree; Provided, that if the employment
or connection of any such alien with the operator ceases, the
applicable laws and regulations on immigration shall apply to him and
his immediate family; Provided, further, that Filipinos shall be given
preference to positions for which they have adequate training, and;
Provided, finally, that the operator shall adopt and implement a
training program for Filipinos along technical or specialized lines,
which program shall be reported to the Energy Development Board. chanroblesvirtualawlibrary
Section 17. Incentives to Coal Users. — The following
incentives shall be granted to enterprises/industries which will
convert their existing oil fired plants facilities to make the same
adaptable for coal burning:cralaw:red
a) Tax Exemption on Imported Capital Equipment. —
Within seven (7) years from the date of approval of the plan for
conversion of existing oil fired plants and facilities to make the same
adaptable for coal burning, the importation of machinery and equipment,
and spare parts shipped with such machinery and equipment necessary to
implement their program of conversion shall not be subject to tariff
and customs duties and compensating tax; Provided, that said machinery,
equipment and spare parts are:cralaw:red
1) Not manufactured in the Philippines in reasonable
quantity and quality at reasonable prices;chanroblesvirtualawlibrary
2) Directly and actually needed and will be used
exclusively in the implementation of the conversion of existing plants
to coal burning;chanroblesvirtualawlibrary
3) Covered by shipping documents in the name of the
enterprise to whom the shipment will be delivered direct by customs
authorities;chanroblesvirtualawlibrary
4) Prior approval, before importation of such
machinery, equipment and spare parts was obtained. If imported
machinery, equipment and spare parts are sold, transferred or otherwise
disposed of without the required prior approval, the importer shall pay
twice the amount of the tax and duty thereon. However, the sale,
transfer or disposition of the said items shall be allowed and approved
without tax and duty if made to another company for use in:cralaw:red
(a) Converting its existing plants to coal burning
subject to the same conditions and limitations as herein provided;chanroblesvirtualawlibrary
(b) For reasons of technical obsolescence; or
(c) For replacement of equipment to improve and/or
expand the operations of the enterprise.
For replacement of modernization of existing facilities of subject
enterprises/industries which will be utilized partly or entirely in the
conversion of coal burning, in lieu of an exemption from payment of
tariff duties and taxes, it shall be granted deferment in the payment
of such taxes and duties for a period of not exceeding ten (10) years
after posting the appropriate bond as may be required by the Secretary
of Finance. chanroblesvirtualawlibrary
b) Tax Credit on Domestic Capital Equipment. — Within
seven (7) years from the date of approval of the plan for conversion of
existing oil fired plants, and facilities to make the same adaptable
for coal burning, a tax credit equivalent to one hundred per cent
(100%) of the value of the compensating tax and customs duties that
would have been paid on machinery, equipment and spare parts necessary
to implement the program of conversion had these items been imported,
shall be given to the industry with a program of conversion to coal
burning that purchases said machinery, equipment and spare parts from a
domestic manufacturer; Provided:cralaw:red
1) That said machinery, equipment and spare parts are
directly and actually needed and will be used exclusively in the
implementation of the conversion of its existing plants to coal burning;chanroblesvirtualawlibrary
2) That the prior approval was obtained for the
purchase of the machinery, equipment and spare parts. If the machinery,
equipment and spare parts are sold, transferred or otherwise disposed
of without the required prior government approval, the purchaser shall
pay twice the amount of the tax credit given to it. However, the sale,
transfer or disposition of the said items shall be allowed and approved
without tax if made:cralaw:red
(a) To another company for use in its approved
program of conversion to coal burning subject to the same conditions
and limitations as herein provided;chanroblesvirtualawlibrary
(b) For reasons of technical obsolescence; or
(c) For purposes of replacement to improve and/or
expand the operation of the enterprise.
c) Net operating Lose Carryover. — A net operating
loss incurred in any of the first ten (10) years after the start of the
implementation of the coal conversion program may be carried over as a
deduction from taxable income for the six (6) years immediately
following the year of such loss. The entire amount of the loss shall be
carried over to the first of the (6) taxable years following the loss,
and any portion of such loss which exceeds the taxable income of such
first year shall be deducted in like manner from the taxable income of
the next remaining five (5) years. The net operating loss shall be
computed in accordance with the provision of the National Internal
Revenue Code, any provision of this Decree to the contrary
notwithstanding, except that income not taxable either in whole or in
part under this or other laws shall be included in the gross
income. chanroblesvirtualawlibrary
d) Capital Gains Tax Exemption. — Exemption from
income tax on the proceeds of the gains realized from the sale,
disposition or transfer of capital assets which are sold or disposed of
as a result of the conversion of facilities to a coal burning plant;
Provided, that such sale, disposition or transfer are registered with
the Bureau of Internal Revenue; Provided, however, that the gains
realized from the subject sale, disposition or transfer of capital
assets are invested in new issues of capital stock of an enterprise
registered under the Investment Incentives Act, as amended, and other
allied incentives laws; Provided, further, that the shares of stock
representing the investment are not disposed of, transferred, assigned,
or conveyed for a period of seven (7) years from the date the
investment was made; and, Provided, finally, that if such shares of
stock are disposed of within the said period of seven (7) years, all
taxes due on the gains realized from the original transfer, sale, or
disposition of the capital assets shall become immediately due and
payable.
e) Accelerated Depreciation. — At the option of the
taxpayer and in accordance with the procedure established by the Bureau
of Internal Revenue, fixed assets used by the industry in carrying out
the program of conversion to coal burning may be:cralaw:red
1) Depreciated to the extent of not more than twice
as fast as normal rate of depreciation or depreciated at normal rate of
depreciation if expected life is ten (10) years or less; or
2) Depreciated over any number of years between five
(5) years and expected life if the latter is more than ten (10) years,
and the depreciation thereon allowed as a deduction from taxable
income; Provided, that the taxpayer notifies the Bureau of Internal
Revenue at the beginning of the depreciation period which depreciation
rate allowed by this section will be used by it.
f) Foreign Loans and Contracts. — The right to remit
at the prevailing exchange rate at the time of remittance such sum as
may be necessary to cover interest and principal of foreign loan and
foreign obligations arising from technological assistance contracts
relating to the implementation of the program of conversion to coal
burning subject to Central Bank regulation.
g) Preference in Grant of Government Loans. —
Government financial institutions such as the Development Bank of the
Philippines, the Philippine National Bank, the Government Service
Insurance System, the Social Security System, the Land Bank of the
Philippines and such other government institutions as are now engaged
or may hereafter engage in financing of investment operations shall, in
accordance with and to the extent allowed by the enabling provisions of
their respective charters or applicable laws, accord high priority to
application for financial assistance submitted by
enterprises/industries requiring funding to implement the program of
conversion to coal burning, whether such financial assistance be in the
form of equity participation in preferred, common or preferred
convertible shares of stock, or in loans and guarantee, and shall
facilitate the processing thereof and the release of the funds
therefor; However, financial assistance shall be extended only under
this paragraph to industry converting to coal burning which is a
Philippine National as this term is defined under Republic Act No.
5186, as amended. chanroblesvirtualawlibrary
The foregoing incentives to enterprises/industries which will convert
their existing oil fired plants and facilities to make the same
adaptable for coal burning shall be administered and implemented by the
Board of Investments created under Republic Act No. 5186, also known as
the Investment Incentives Act, as amended. The Board of Investments
shall have the power to process and approved, under such terms and
conditions as it may deem necessary, plans for conversion to coal
burning and applications for availment of the foregoing incentives. It
shall promulgate such rules and regulations as may be necessary to
implement the intent and provisions of this section.
Section 18. Implementing Agency. — Except as
otherwise provided in Section 17 hereof, the Energy Development Board,
created pursuant to Presidential Decree No. 910, in addition to the
powers, duties and functions under existing laws, shall be charged with
carrying out the provisions of this Decree and shall be vested with the
authority to promulgate rules and regulations implementing thereof.
Section 19. Separability Clause. — Should any
provision of this Decree be held unconstitutional, no other provision
hereof shall be effected thereby.
Section 20. Repealing Clause. — The provisions of
Presidential Decree No. 463, otherwise known as the "Mineral Resources
Development Decree of 1974" and other laws insofar as they deal, relate
or affect the exploration, exploitation and administration of coal
lands are hereby repealed. Furthermore, all laws, decree, executive
orders, administrative orders, rules, and regulations, or parts thereof
in conflict or inconsistent with any provision of this Decree are
hereby repealed, revoked, modified or amended accordingly.
Section 21. Effectivity. — This Decree shall take
effect immediately upon approval.
Done in the City of Manila,
this 28th day of July, in the year of Our Lord, nineteen hundred and
seventy-six.
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