REPUBLIC ACT NO. 4861 - AN ACT
AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED ONE THOUSAND, ENTITLED
"AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO ISSUE BONDS TO
FINANCE PUBLIC WORKS AND PROJECTS FOR ECONOMIC DEVELOPMENT, AUTHORIZED
BY LAW, AND FOR OTHER PURPOSES," AS AMENDED
Section 1. Section one of Republic Act Numbered One thousand
is hereby amended to read as follows:
"Section 1. Upon the recommendation of the Secretary of
Finance, the Monetary Board, and the National Economic Council, the
President of the Philippines is authorized to issue, preferably in the
Philippines, or abroad if necessary, in the name and in behalf of the
Republic of the Philippines bonds in an amount not exceeding two
billion pesos to finance public works and self-liquidating projects for
economic development, which are authorized by law, including
expropriation of lands for subdivision and resale to individuals, or to
repay or service bonded obligations of the Government incurred for such
projects: provided, however, that no single issue shall exceed two
hundred million pesos and that no further issue shall be made if eighty
per centum of the immediately preceding issue has not been sold: and,
provided, further, that not more than twenty-five per centum of any
issue is spent for non-self-liquidating and non-revenue-producing
projects. A self-liquidating project is defined as one which directly
generates revenue to at least pay for its cost within the maturity
period of bonds issued for the purpose. Cost is defined as actual cost
of the project plus interest payments and service charges. Investments
in the self-liquidating projects in provinces, cities, and
municipalities shall be limited by the paying capacity of the province,
city or municipality to be certified by the Secretary of Finance:
provided, that the probable income from such projects shall be taken
into consideration: provided, finally, that not more than five per
centum of this bond issues shall be used to pay unserved government
obligations, loans and advances, secured or unsecured, guaranteed by
the National Government, made by government-owned or controlled
financial institutions other than the Central Bank, to government
political subdivisions, offices and instrumentalities, and/or other
loans committed by government-owned and/or controlled financial
institutions, other than the Central Bank, guaranteed by the Government.
"The bonds shall be issued in such amounts as will be needed at any one
time, with maturities of not less than five years taking into account
the rate at which said bonds may be absorbed by the buying public and
the fund requirements of projects ready for execution and taking into
consideration further a proper balance between productive and
non-productive projects so that inflation shall be held to the minimum:
provided, that in periods of inflation or as long as inflationary
dangers exist, not more than thirty per cent of the new issue in any
fiscal year may be absorbed by the Central Bank of the Philippines,
either directly or indirectly.
"The Secretary of Finance, in consultation with the Monetary Board,
shall prescribe the form, the rate of interest, the denominations,
maturities, negotiability, convertibility, call and redemption
features, and all other terms and conditions of issuance, placement,
sale, servicing, redemption and payment of all bonds issued under the
authority of this Act.
"The bonds issued under the authority of this section may be made
payable both as to principal and interest, in Philippine currency or
any readily convertible foreign currency.
"Nothing in this section shall be interpreted to mean that the
Secretary of Finance, in the redemption of securities, is prevented
from applying the lottery principle by which bonds, drawn by lot, may
be redeemed before maturity either at their value or above.
"The bonds to be issued under this Act shall be exempt from taxation,
including the tax on foreign exchange, by the Government of the
Republic of the Philippines or by any political or municipal
subdivision thereof, which fact shall be stated on their face in
accordance with this Act under which the said bonds are issued and
shall likewise be exempt from attachment, execution or seizure."
Sec. 2. The implementation of this Act shall be
subject to, and governed by, the provisions of Executive Order Numbered
Two hundred thirty-six, dated February 13, 1957, prescribing procedures
for the planning of development finances, the issuance of government
securities, and the disbursement of proceeds, and creating the Fiscal
Policy Council and the Technical Committee on Development Finances, as
amended by Executive Order Numbered twenty-six, dated May 26, 1966, not
inconsistent with this Act, which are hereby adopted by reference and
made an integral part of this Act.
Sec. 3. Any violation of the provisions of this
Act shall be punishable by imprisonment for not less than one year nor
more than five years, in addition to a fine of not less than one
thousand pesos nor more than ten thousand pesos at the discretion of
the Court: provided, that if the offender is a public officer or
employee, he shall, in addition to such imprisonment and fine, suffer
perpetual disqualification to hold public office.
Sec. 4. This Act shall take effect upon its
approval.
Approved: August 8, 1966
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