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This page features the full text of
Republic Act No. 7368
"Countrywide
Industrialization Act of 1992"
AN
ACT TO LAUNCH AND PROMOTE COUNTRYWIDE INDUSTRIALIZATION THROUGH THE
ESTABLISHMENT
OF MANUFACTURING, PROCESSING AND RELATED INDUSTRIES BY PROVIDING
FINANCIAL
ASSISTANCE TO ENTERPRISES IN EVERY TOWN AND CITY NOT EXCEEDING P30
MILLION
AND P40 MILLION, RESPECTIVELY, AUTHORIZING THE APPROPRIATION THEREFOR
IN
THE AMOUNT OF P1 BILLION PER YEAR FOR THE NEXT FIVE YEARS AS INITIAL
CAPITAL,
AND FOR OTHER PURPOSES.
REPUBLIC
ACT NO. 7368AN
ACT TO LAUNCH AND PROMOTE COUNTRYWIDE INDUSTRIALIZATION THROUGH THE
ESTABLISHMENT
OF MANUFACTURING, PROCESSING AND RELATED INDUSTRIES BY PROVIDING
FINANCIAL
ASSISTANCE TO ENTERPRISES IN EVERY TOWN AND CITY NOT EXCEEDING P30
MILLION
AND P40 MILLION, RESPECTIVELY, AUTHORIZING THE APPROPRIATION THEREFOR
IN
THE AMOUNT OF P1 BILLION PER YEAR FOR THE NEXT FIVE YEARS AS INITIAL
CAPITAL,
AND FOR OTHER PURPOSES.
Section
1. Short Title. — This shall
otherwise be known as the "Countrywide Industrialization Act of
1992."
chanrobles virtuallaw libraryred
Sec.
2. Declaration of Policy. — It
is hereby declared the policy of the State to accelerate countrywide
industrialization
through the establishment of manufacturing, processing and related
industries
in all towns and cities of the country which add value to domestic
resources
and farm products, create employment and livelihood opportunities,
enhance
the well-being of the rural areas, hasten the formation and the
integration
of intra-provincial and regional trade and industry linkages thus
sustaining
national economic growth.
Sec.
3. Creation of Countrywide Industrialization
Fund. — There is hereby created the Countrywide Industrialization Fund,
hereinafter referred to as either the Fund or CIF, as a source of
financial
assistance to eligible countrywide industrialization projects in the
manner
and under the terms and conditions prescribed by this Act and the
implementing
rules and regulations. chanrobles virtuallaw libraryred
The
Fund shall be appropriated from the national budget, and supplemented
by
funds bilateral and multilateral sources, which shall be negotiated and
arranged by the National Government to ensure adequacy of the
Fund. chanrobles virtuallaw libraryred
The
Fund shall be deposited with and managed by three (3) banks, namely:
Philippine
National Bank (PNB), Development Bank of the Philippines (DBP), and
Land
Bank of the Philippines (LBP), disbursements from which shall be made
solely
for investments as equity, grants or loans, in duly approved projects
endorsed
by the Local Countrywide Industrialization Boards (LCIBs) in the
amounts
authorized by the Countrywide Industrialization Office (CIO).cralaw:red
Sec.
4. Creation of the Countrywide
Industrialization Office (CIO). — The Countrywide Industrialization
Office,
hereinafter referred to as CIO, is hereby created and attached with the
Department of Trade and Industry with the following functions:
(a) to
effectively facilitate the programmed distribution of financial
assistance
to approved countrywide industrialization projects endorsed by
especially
accredited LCIBs referred to in Section 6 hereof; and to authorize
disbursements
by the PNB, DBP and LDP from the CIF of the amount of financial
assistance
approved by the CIO to the specified countrywide projects; chanrobles virtuallaw libraryred(b) to
provide such guidelines as may be necessary to carry out the policies
of
this Act; chanrobles virtuallaw libraryred
(c) to
monitor and evaluate on a regular basis the status of all LCIBs and to
help them achieve viability and success;
(d) to
pursue appropriate measures to increase the corpus of the CIF such as
the
availment of foreign loans/grants;
(e) to
make representations and coordinate with agencies of the National
Government
which provide advice and technical assistance to private sector
enterprises
so that these may be made accessible to countrywide industrialization
projects
as requested by their LCIBs. chanrobles virtuallaw libraryred
Sec.
5. Management of the Countrywide
Industrialization Office. — The Countrywide Industrialization Office
shall
be governed by a Management Board composed of ten (10) members, as
follows:chanroblesvirtualawlibrary
(a) six
(6) from the Government, specifically: one (1) from the Department of
Trade
and Industry; one (1) from the Department of Science and Technology;
one
(1) from the Department of Finance; one (1) from the Governor's League
of the Philippines; one (1) from the City Mayors' League of the
Philippines;
and one (1) from the Municipal Mayors' League of the Philippines.chanrobles virtual law library chanrobles virtuallaw libraryred(b) four
(4) from the private sector, specifically: two (2) from the trade and
commerce
groups; one (1) from the labor groups; and one (1) from the socio-civic
groups.chanrobles virtuallaw libraryred
The
Management Board shall have the representative from the Department of
Trade
and Industry as its Chairman. All ten (10) members shall be appointed
by
the President within thirty (30) days from approval of this Act.
The
table of organization for the CIO shall, after its adoption by the
Management
Board, be submitted to the Department of Budget and Management (DBM)
for
approval, and shall be acted upon the latter within thirty (30) days
upon
its submission.chanrobles virtual law library
The
Chairman is hereby vested with the authority to appoint personnel to
positions
in the approved table of organization as may be necessary to
effectively
implement the provisions of this Act, and in accordance with applicable
civil service rules and regulations. The appointment shall take effect
upon the approval by the Management Board.cralaw:red
The
initial secretariat and the technical staff shall be provided by
detailed
personnel from the Department of Trade and Industry (DTI) and
supplemented
by detailed personnel as may be necessary from other departments and
agencies
of the Government including the Congress of the Philippines.cralaw:red
Sec.
6. Executive Committee of Local
Development Council as the Local Countrywide Industrialization Board. —
The Executive Committee of the municipal, city and provincial
development
councils shall serve as the Local Countrywide Industrialization Board
(LCIB)
which shall be directed towards the development of technology and
skills,
assist all enterprises in the utilization of indigenous raw materials
for
livelihood programs and in the delivery of credit organizations and
marketing
services.cralaw:red
In
addition to the functions of the local development councils as mandated
in the Local Government Code of 1991 (Republic Act No. 7160), they
shall
perform the following functions:
(a) receive
all applications for countrywide industrialization projects within its
area of jurisdiction; evaluate and approve or disapprove all project
applications
within thirty (30) days from receipt thereof; and endorse projects to
the
Countrywide Industrialization Office (CIO) for funding; chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(b) in
coordination with the conduit banks, monitor the status of approved
projects,
help enterprises obtain marketing, technical training and other forms
of
non-financial assistance as they may require from agencies of the
National
and Local Governments;
(c) review
the industrialization plan for the province, city or municipality as
prepared
by the municipal, city or provincial development officer if the funding
required for the proposed project is to be sourced from CIF;
(d) disseminate
pertinent information; and chanrobles virtuallaw libraryred
(e) submit
quarterly reports to the CIO on the amounts of financial assistance
received
by the countrywide industrialization projects within its jurisdiction,
and a status report on each countrywide industrialization project. Copy
of the report shall be furnished the Sangguniang Bayan or Sangguniang
Panlungsod
concerned.
Sec.
7. Conditions of Financial Assistance.
— The following criteria and guidelines shall be applied by the LCIB
and
others in determining eligibility of proposed enterprise:
(a) Labor
generation — It must generate new employment opportunities within the
proposing
city and/or municipality, with preference to labor intensive
projects.chanrobles virtual law library chanrobles virtuallaw libraryred(b) Market-oriented
— The products must have identified reliable markets, within and/or
outside
the province, which have growth potential to ensure viability of the
project
in the long term.chanrobles virtual law library
(c) Foreign
exchange contribution — The enterprise must desirably contribute
towards
the generation of, or savings in foreign exchange through exportation
and/or
import substitution. chanrobles virtuallaw libraryred
(d) Use
of local resources — The enterprise shall give priority to the
utilization
of raw material inputs indigenous to the municipality, city or province
and its environs, with emphasis on agricultural projects and those with
high forward and backward linkages.
(e) Import
of material inputs — Where indigenous raw materials are not readily
available,
the importation of inputs from other provinces or regions and/or other
countries shall be allowed, without prejudice to availment of the Board
of Investments and other government incentives. The enterprise shall be
entitled to tax free importation of raw materials and machineries:
Provided,
That in the case of tax free raw material importations, the end
products
must be totally re-exported.
(f) Agreements
— The enterprise may enter into joint venture and/or management and
marketing
agreements with any company capable and willing to provide management,
technical and marketing expertise as well as capital.
(g) Municipal
development plan — The economic activity in which the enterprise is
engaged
or will engage shall be among those included in the priority projects
list
adopted by the local development council.
Sec.
8. Financial Conduits. — Remittance
of the financial assistance to the countrywide industrialization
projects
authorized by the Countrywide Industrialization Office from the CIF
shall
be coursed to the accredited conduit bank branch selected by the LCIB
for
the projects.chanrobles virtual law library
(a) The
three (3) depository/managing banks shall also serve as financial
conduits
for the CIF, namely: PNB, DBP, and LBP, and any private commercial or
rural
banks accredited by the CIO including private financial lending
institutions
authorized by the Central Bank. chanrobles virtuallaw libraryredchanrobles virtuallaw libraryredIn
cities and municipalities where the nearest PNB, DBP, and LBP branch is
deemed not accessible, or for other reasons would not be available to
satisfactorily
service the countrywide industrialization projects therein, the LCIB
may
appoint as financial conduit a branch in the area of any private
commercial
or rural bank and other private financial lending institution, or in
the
absence thereof, in the adjacent municipality or city upon the
recommendation
of the LCIB.chanrobles virtual law library
(b) The
fees to a conduit bank or private financial lending institution for its
services shall be set percentage of outstanding loan amounts to the
client
countrywide industrialization enterprise served by such bank. The fee
rate
shall be uniform for all conduit banks and shall be established by the
CIO in consultation with government conduit banks (PNB, DBP and
LBP).
(c) The
conduit banks shall perform the following functions:
(1) ensure
completeness of the submitted loan applications and corresponding
requirements;chanrobles virtuallaw libraryred(2) release
the funding assistance to its client countrywide industrialization
projects;
(3) collect
the loan amortization and interest payments of borrower
enterprises/project
proponents;
(4) monitor
and report to the LCIB the progress of local countrywide
industrialization
client enterprise and declare any loan in default based on specific
criteria
to be set by the CIO; chanrobles virtuallaw libraryred
(5) in
conjunction with the LCIB, plan and supervise rehabilitation of
distressed
client enterprises; and
(6) in
behalf of the CIO, foreclose the assets of unsavable client projects,
and
assist the LCIB to auction the foreclosed assets.
Sec.
9. Selection of Countrywide
Industrialization
Projects. — In addition to the criteria set forth in Section 7 hereof,
preference in awards shall be given to projects with any of the
following
features:chanroblesvirtualawlibrary
(a) whose
equity is owned by residents of the city or municipality; and then of
adjacent
municipalities and province; chanrobles virtuallaw libraryred(b) owned
by an established cooperative or non-governmental organization; chanrobles virtuallaw libraryred
(c) whose
proponents have previous experience in successful ventures, have no
unfavorable
credit record and are reputed to be of good character; or
(d) whose
proponents have experience in an undertaking related to the
project.
Sec.
10. Financial Assistance. — The
financial assistance under this Act shall be awarded to deserving
projects
in a total amount not exceeding eighty-five percent (85%) of the value
of the real physical assets of the project. The project sponsors must
invest
as equity at least fifteen percent (15%) of the real assets of the
project,
supplemented by financial assistance from the CIF in the following
maximum
proportions to real physical assets of the project:
(a) ten
percent (10%) — grants (maximum) for pre-operating expenses, technical
assistance, feasibility studies, post-production marketing assistance,
training and institution-building.chanrobles virtual law library chanrobles virtuallaw libraryred(b) twenty
percent (20%) — investment in equity by the CIF in the enterprise. This
shall be subject to a stock purchase agreement within a ten-year period
at book value, in which the project owners will be the priority
buyers.chanrobles virtual law library
(c) fifty-five
percent (55%) — soft or concessional loans with:
(1) loan
terms allowing for reasonable grace periods; chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred(2) interest
rate of not more than eleven percent (11%), or seven percent (7%) above
the CIF's or the National Government's true borrowing rate from
bilateral
or multilateral lenders, whichever is lower; and
(3) collateral
requirement not to exceed the total assets of the project per se,
inclusive
of the real estate where the factory or industry is located.
Sec.
11. Implementing Rules and Regulations.
— The Management Board of the CIO shall issue the necessary rules and
regulations
within forty-five (45) days from its appointment, and shall promulgate
such other measures as may be necessary to effectively implement the
provisions
of this Act, in consultation with the Congress. chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred
Sec.
12. Annual Report of the Commission
on Audit and the Management Board. — The availment and use of a
financial
assistance under this Act shall be subject to regular audit by the
Commission
on Audit which shall render an annual report of its findings to the
President
and the Congress. The Management Board shall likewise submit an annual
report of its operations to the President.
Sec.
13. Penalties. — Any person who
shall unlawfully and maliciously divert the financial assistance
allocated
under this Act or violate the provisions of Section 6 hereof shall, in
addition to the penalties imposed under existing laws, be punished with
imprisonment ranging from six (6) years to twelve (12) years and a fine
of Fifty thousand pesos (P50,000.00).cralaw:red
Any
public officer or employee who shall, on his own or in connivance with
others, commit the acts mentioned under the preceding paragraph shall
be
punished with the maximum penalty imposed under this Section in
addition
to perpetual disqualification from public office.cralaw:red
If
the commission of this Act is attributed to a corporation, association,
cooperative, or any other judicial person, the penalty shall be imposed
on the president, treasurer, secretary or any other responsible officer
thereof.cralaw:red
Finally,
if the offender is an alien, he shall de deported immediately without
further
proceedings, after service of sentence.cralaw:red
Sec.
14. Appropriations. — There is
hereby authorized to be appropriated the amount of One billion pesos
(P1,000,000,000.00)
per year for the next five (5) years as counterpart fund and initial
capital
of the Countrywide Industrialization Fund: Provided, That the
allocation
in loans and grants in each town and city shall not exceed Thirty
million
pesos (P30,000,000.00) and Forty million pesos (P40,000,000.00),
respectively. chanrobles virtuallaw libraryred
The
Management Board of the CIO shall submit to the Office of the President
the budget needed for its operations for inclusion in the annual
General
Appropriations Act.cralaw:red
Initial
operations of the CIO, from the time the Management Board is
constituted
and organized until the first release to the CIO of funds from the
national
budget, shall be funded by the Department of Trade and Industry.cralaw:red
Sec.
15. Repealing Clause. — All laws,
decrees, orders, rules and regulations, or parts thereof, inconsistent
with the provisions of this Act are hereby repealed or modified
accordingly.cralaw:red
Sec.
16. Separability Clause. — In
case any provision or part of this Act is declared invalid or
unconstitutional,
all other portions not affected thereby shall remain valid.chanrobles virtuallaw libraryred
Sec.
17. Effectivity. — This Act shall
take effect immediately upon its approval without prejudice to its
publication
in at least two (2) newspapers of general circulation. chanrobles virtuallaw libraryred
Approved:
April 10, 1992
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