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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1080
PRESIDENTIAL DECREE NO. 1080 -
REVISING PRESIDENTIAL DECREE NO. 550 CREATING THE PHILIPPINE FOREIGN
LOAN GUARANTEE CORPORATION SO IT WILL NOW BE ENTITLED THE PHILIPPINE
EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION
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chanroblesvirtualawlibrary
I,
FERDINAND E. MARCOS, President of the Philippines, by virtue of the
powers vested in me by the Constitution, do hereby order and decree the
revision of Presidential Decree No. 550, dated September 11, 1974,
which shall henceforth read in its entirely as follows: chanroblesvirtualawlibrary
WHEREAS, there is a need to supplement existing domestic financial
resources with borrowings from abroad in order to meet the country's
economic development requirements;chanroblesvirtualawlibrary
WHEREAS, such foreign obligations contracted by the private sector may
need to be adequately guaranteed by government financial institutions;chanroblesvirtualawlibrary
WHEREAS, the Development Bank of the Philippines, the Philippine
National Bank, and the National Investment and Development Corporation
are the only government financial institutions presently offering
guarantee coverage to such foreign obligations incurred by the private
sector;chanroblesvirtualawlibrary
WHEREAS, there is a felt need to expand the Philippine Government's
guarantee coverage of foreign loans for the private sector in order to
ensure the continuous entry of these resources into the economy;chanroblesvirtualawlibrary
WHEREAS, THERE IS A NEED TO EXPAND THE GOVERNMENT'S GUARANTEE COVERAGE
TO THE PRIVATE SECTOR TO INCLUDE BANKING AND TECHNICAL INSTITUTIONS
GRANTING LOANS TO FILIPINO EXPORTERS, PRODUCERS OF EXPORT PRODUCTS, AND
CONTRACTORS WITH APPROVED SERVICE CONTRACTS ABROAD, AND/OR ISSUING
STANDBY LETTERS OF CREDIT OR LETTERS OF GUARANTEE FOR THE PERFORMANCE
OF APPROVED SERVICE CONTRACTS ABROAD ENTERED INTO BY DOMESTIC ENTITIES,
ENTERPRISES OR CORPORATION;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution do hereby
order and decree:cralaw:red
Section 1. Philippine EXPORT AND Foreign Loan
Guarantee Corporation. —chanroblesvirtualawlibrary
a) There is hereby created a body corporate to be
known as the Philippine EXPORT AND Foreign Loan Guarantee Corporation,
hereinafter referred to as the Corporation, which shall have succession
in its corporate name. The Corporation shall have its principal office
in the Greater Manila Area.
b) The Corporation shall be deemed to be a wholly
owned Government corporation and shall accordingly be subject to
provisions of existing laws, rules and regulations applicable to
Government-owned corporations not otherwise inconsistent with the
provisions of this Decree.
Section 2. Primary Purposes. — The primary purposes
of the Corporation shall be as follows:cralaw:red
a) To guarantee APPROVED foreign loans, in whole or
in part, granted to any domestic entity, enterprise or corporation,
majority of the capital of which is owned by citizens of the
Philippines, and
b) TO GUARANTEE PHILIPPINE BANKING AND FINANCIAL
INSTITUTIONS AGAINST LOSS THAT MAY BE INCURRED IN CONNECTION WITH (1)
THE GRANT OF THE LOANS/CREDIT ACCOMMODATIONS TO EXPORTERS, PRODUCERS OF
EXPORT PRODUCTS, OR CONTRACTORS WITH APPROVED SERVICE CONTRACTS ABROAD,
PROVIDED THAT SUCH EXPORTERS, PRODUCERS OR SERVICE CONTRACTORS, ARE
FILIPINOS OR ENTITIES MAJORITY OF THE CAPITAL OF WHICH ARE OWNED BY
CITIZENS OF THE PHILIPPINES, AND (2) THE ISSUANCE OF STANDBY LETTERS OF
CREDIT OR OF LETTERS OF GUARANTEE, AS THE CASE MAY BE TO SECURE THE
PERFORMANCE OF APPROVED SERVICE CONTRACTS ABROAD ENTERED INTO BY ANY
DOMESTIC ENTITY, ENTERPRISE OR CORPORATION, MAJORITY OF THE CAPITAL OF
WHICH IS OWNED BY CITIZENS OF THE PHILIPPINES.
Section 3. Functions. — The corporation shall have
the following functions:cralaw:red
a) To promote and facilitate the entry of foreign
loans into the country for development purposes having special regard
to the needs of export-oriented industries, industries registered with
the Board of Investments, public utilities, and industries the
promotion of which is encouraged by government policy;chanroblesvirtualawlibrary
b) TO GUARANTEE LOANS GRANTED BY PHILIPPINE BANKING
AND FINANCIAL INSTITUTIONS TO QUALIFIED EXPORTERS, PRODUCERS OF EXPORT
PRODUCTS, AND CONTRACTORS WITH APPROVED SERVICE CONTRACTS ABROAD;chanroblesvirtualawlibrary
c) TO FACILITATE AND ASSIST IN THE IMPLEMENTATION OF
APPROVED SERVICE CONTRACTS ABROAD ENTERED INTO BY PHILIPPINE ENTITIES,
ENTERPRISES, OR CORPORATIONS WITH FOREIGN EXCHANGE EARNING POTENTIALS,
BY PROVIDING COUNTER-GUARANTEES TO PHILIPPINE BANKS AND FINANCIAL
INSTITUTIONS ISSUING STANDBY LETTERS OF CREDIT OR OF LETTERS OF
GUARANTEE FOR THE PERFORMANCE OF SAID SERVICE CONTRACTS;chanroblesvirtualawlibrary
d) To meet requests from domestic entities,
enterprises, and corporations to assist them in the coordination of
their development and expansion plans with a view to achieving better
utilization of their resources; and chanroblesvirtualawlibrary
e) To provide technical assistance in the
preparation, financing and execution of development or expansion
programs, including the formulation of specific project proposals.
Section 4. Corporate Powers. — The Corporation is
hereby authorized to make contracts, to lease or own real and personal
property, and to sell or otherwise dispose of the same, to sue and be
sued, and otherwise to do and perform any and all things that may be
necessary or proper to carry out the purpose of this Decree, or as are
essential to the proper conduct of such operations.
Section 5. Borrowing and other Miscellaneous Powers.
— In addition to the powers specified elsewhere in this Decree, the
Corporation shall have the power:cralaw:red
a) To borrow funds in foreign countries or in the
Philippines with the approval of the President of the Philippines and
subject to pertinent provisions of Republic Act No. 265, as amended,
and Central Bank rules and regulations;chanroblesvirtualawlibrary
b) To buy and sell securities the Corporation has
issued or guaranteed;chanroblesvirtualawlibrary
c) To underwrite or participate in the under-writing
of, securities by any domestic entity or enterprise for purposes
consistent with the purpose of the Corporation;chanroblesvirtualawlibrary
d) To invest funds not needed in its operations;chanroblesvirtualawlibrary
f) To exercise such other powers and establish such
rules and regulations as may be necessary and appropriate in
furtherance of its purpose and functions.
Section 6. Operating Principles. — The operations of
the Corporation shall be conducted in accordance with the following
principles: chanroblesvirtualawlibrary
a) The operations of the Corporation shall
principally facilitate foreign OR DOMESTIC loan financing of specific
projects, AS WELL AS THE IMPLEMENTATION OF APPROVED SERVICE CONTRACTS
ABROAD WITH NET FOREIGN EXCHANGE EARNING POTENTIALS, ENTERED INTO BY
DOMESTIC ENTITIES, ENTERPRISES OR CORPORATIONS. They may, however,
include guarantee and counter-guarantees of (1) foreign loans made by
banks or other financial institutions or suitable entities in order
that the latter may finance specific development projects either by
outright loan or guarantees; (2) DOMESTIC LOANS GRANTED BY PHILIPPINE
BANKS AND FINANCIAL INSTITUTIONS TO QUALIFIED EXPORTERS, PRODUCERS OF
EXPORT PRODUCTS, AND CONTRACTORS WITH APPROVED SERVICE CONTRACTS
ABROAD; AND (3) LETTERS OF CREDIT AND/OR LETTERS OF GUARANTEE ISSUED BY
BANKS AND FINANCIAL INSTITUTIONS TO SECURE THE PERFORMANCE OF SERVICE
CONTRACTS ABROAD ENTERED INTO BY DOMESTIC ENTITIES, ENTERPRISES OR
CORPORATIONS.
b) In considering an application for a guarantee, the
Corporation shall pay due regard to the ability of the borrower to
obtain guarantee facilities elsewhere on terms and conditions that the
Corporation considers reasonable for the recipient, taking into account
all pertinent factors;chanroblesvirtualawlibrary
c) In guaranteeing a loan OR A STANDBY LETTER OF
CREDIT OR LETTER OF GUARANTEE, the Corporation shall pay due regard to
the prospect that the borrower OR THE SERVICE CONTRACTOR will be in a
position to meet its obligations under the loan/SERVICE CONTRACT;chanroblesvirtualawlibrary
d) In guaranteeing a loan OR STANDBY L/C OR LETTER OF
GUARANTEE IN FAVOR OF A SERVICE CONTRACT, or in underwriting the sale
of securities, the Corporation shall receive suitable compensation for
its risks;chanroblesvirtualawlibrary
e) The corporation shall take the necessary measures
to ensure that the proceeds of any loan guaranteed by the Corporation
are used only for the purposes for which the loan was granted and with
due attention to considerations of economy and efficiency;chanroblesvirtualawlibrary
f) The Corporation shall not guarantee a single
borrower OR STANDBY L/C OR LETTER OF GUARANTEE IN FAVOR OF A
SINGLE SERVICE CONTRACTOR in an amount exceeding the Corporation's
subscribed capital stock, nor shall the aggregate outstanding guarantee
obligations of the Corporation exceed fifteen (15) times its subscribed
capital stock plus surplus;chanroblesvirtualawlibrary
g) When payment is made by the Corporation pursuant
to a guarantee it has made, the Corporation shall be subrogated to any
right, title, claim, or cause of action belonging to the creditor OR
SERVICE CONTRACTOR;chanroblesvirtualawlibrary
h) The Corporation shall be guided by sound banking
principles and sound financial management in its operations.
Section 7. Capital Stock. — The initial authorized
capital stock of the Corporation shall be TWO BILLION PESOS
(P2,000,000,000) to be fully subscribed by the Government of the
Republic of the Philippines. For this purpose, the sum of TWO BILLION
PESOS (P2,000,000,000) is hereby appropriated from any sums not
otherwise appropriated in the National Treasury. The Board may increase
the authorized capital stock of the Corporation, subject to the
approval of the President of the Philippines.
Section 8. Loans from Central Bank. — The Central
Bank of the Philippines may grant the Corporation loans and advances
which it may need for its operations secured by any assets which are
defined as acceptable security by a concurrent vote of at least five
(5) members of the Monetary Board.
Section 9. Guarantee of National Government. — The
payment of obligations incurred by the Corporation under the provisions
of this Decree is fully guaranteed by the Government of the Republic of
the Philippines.
Section 10. Board of Directors; Compositions. — The
powers and functions of the Corporation shall be exercised by a Board
of Directors, hereinafter referred to as the 'Board' which shall be
composed of NINE (9) members, as follows: chanroblesvirtualawlibrary
a) The Secretary of Finance, who shall be the
Chairman of the Board. Whenever the Secretary of Finance is unable to
attend a meeting of the Board, he shall designate an undersecretary to
attend as his alternate, who shall not act as Chairman.
b) The President of the Corporation, who shall be the
Vice-Chairman of the Board, shall assist the Chairman and act in his
stead in case of absence or incapacity.
c) The Secretary of Industry. Whenever the Secretary
of Industry is unable to attend a meeting of the Board, he shall
designate an undersecretary to attend as his alternate.
d) THE SECRETARY OF TRADE. WHENEVER THE SECRETARY OF
TRADE IS UNABLE TO ATTEND A MEETING OF THE BOARD, HE SHALL DESIGNATE AN
UNDERSECRETARY TO ATTEND AS HIS ALTERNATE.
e) THE GOVERNOR OF THE CENTRAL BANK OF THE
PHILIPPINES. WHENEVER THE GOVERNOR OF THE CENTRAL BANK OF THE
PHILIPPINES IS UNABLE TO ATTEND A MEETING OF THE BOARD, HE SHALL
DESIGNATE THE SENIOR DEPUTY GOVERNOR OR A DEPUTY GOVERNOR AS HIS
ALTERNATE. chanroblesvirtualawlibrary
f) The Director-General of the National Economic and
Development Authority. Whenever the Director-General is unable to
attend a meeting of the Board, he shall designate a Deputy Director
General of the Authority to attend as his alternate.
g) THE CHAIRMAN-PRESIDENT, PHILIPPINE EXPORT COUNCIL.
WHENEVER THE CHAIRMAN-PRESIDENT OF THE PHILIPPINE EXPORT COUNCIL IS
UNABLE TO ATTEND A MEETING OF THE BOARD, HE SHALL DESIGNATE THE
VICE-PRESIDENT, PHILIPPINE EXPORT COUNCIL, TO ATTEND AS HIS ALTERNATE.
h) THE SECRETARY OF NATURAL RESOURCES. WHENEVER THE
SECRETARY OF NATURAL RESOURCES IS UNABLE TO ATTEND A MEETING OF THE
BOARD, HE SHALL DESIGNATE AN UNDERSECRETARY TO ATTEND AS HIS ALTERNATE.
i) THE SECRETARY OF AGRICULTURE. WHENEVER THE
SECRETARY OF AGRICULTURE IS UNABLE TO ATTEND A MEETING OF THE BOARD, HE
SHALL DESIGNATE AN UNDERSECRETARY TO ATTEND AS HIS ALTERNATE.
Section 11. Powers of the Board. — The Board shall
have the authority:cralaw:red
a) To formulate policies to carry out effectively the
provisions of this Decree;chanroblesvirtualawlibrary
b) To prepare and issue rules and regulations as it
considers necessary for the effective discharge of the responsibilities
and exercise of the powers assigned to the Corporation under this
Decree; chanroblesvirtualawlibrary
c) To direct management, operations and
administration of the Corporation;chanroblesvirtualawlibrary
d) On the recommendation of the President of the
Corporation, appoint, fix the remunerations and other emoluments, and
remove the personnel of the Corporation: Provided, however, That
positions considered by the Board to be policy-determining, primarily
confidential or highly technical in nature shall not subject to the
Civil Service Law; and
e) To authorize such expenditure by the Corporation
as are in the interest of the effective administration and operations
of the Corporation.
Section 12. Meetings. — The Board shall convene as
frequently as is necessary to discharge its responsibilities properly,
but shall meet at least once every two weeks. The Board may be convoked
either by the Secretary of Finance or by the President of the
Corporation.
The presence of FIVE (5) members shall constitute a quorum. chanroblesvirtualawlibrary
All decisions of the Board shall require the concurrence of at least
FIVE (5) members.
Section 13. Remuneration of Members for Attending
Meetings of the Board. — The members of the Board or their respective
alternates, except the President of the Corporation, shall receive a
per diem of FIVE HUNDRED PESOS (P500.00) for every Board meeting
attended.
Section 14. President. — The Chief Executive Officer
of the Corporation shall be the President who shall be appointed by the
President of the Philippines, upon recommendation of the Board, for a
term of six (6) years unless removed for cause or by reason of
incapacity. No person shall be elected President of the Corporation
unless he is a native-born Filipino citizen, at least forty (40) years
of age, of good moral character and of unquestionable integrity and
responsibility, and who is experienced and of recognized competence in
the field of international financial transactions, banking and law. He
shall be assisted by such executive officials as may be necessary for
the efficient operation of the Corporation. chanroblesvirtualawlibrary
Section 15. Powers and Duties of the President. — The
powers and duties of the President of the Corporation shall be:cralaw:red
a) To prepare the agenda for meetings of the Board
and to submit for the consideration of the Board the policies and
measures which he believes to be necessary to carry out the purposes
and provisions of this Decree;chanroblesvirtualawlibrary
b) To execute and administer the policies and
measures approved by the Board;chanroblesvirtualawlibrary
c) To direct and supervise the operations and
internal administration of the Board. He may delegate certain of his
administrative responsibilities to other officers of the Corporation,
subject to the rules and regulations of the Board; and
d) To exercise such other powers as may be vested in
him by the Board.
Section 16. Remuneration of the President. — The
salary of the President of the Corporation shall be fixed by the Board
with the approval of the President of the Philippines. Until such
salary has been so fixed, the President of the Corporation shall
receive a salary of Sixty Thousand Pesos (P60,000) per annum. The Board
may authorize payment of allowances and other emoluments to the
President of the Corporation. chanroblesvirtualawlibrary
Section 17. Other Officials and Employees of the
Corporation. — All officials and employees of the Corporation shall be
appointed and removed by the Board, on recommendation of the President
of the Corporation.
Section 18. Assistance by other Government Offices
and Corporations. — Other Government offices and Government-owned and
controlled corporations shall extend whatever assistance may be needed
by the Corporation, including the detail of its officials and employees
to the Corporation on a full-time or part-time basis under arrangements
satisfactory to the Corporation and the other Government offices or
corporation concerned. Said officials and employees may draw allowances
and other emoluments for such assignment, notwithstanding, the
provision of any law to the contrary.
Section 19. Auditor. — The Chairman of the Commission
on Audit shall act as the ex-officio Auditor of the Corporation and, as
such, he is empowered and authorized to appoint a representative who
shall be the Auditor of the Corporation and, in accordance with law,
fix his salary, and to appoint and fix the salaries and number of the
personnel to assist said representative in his work, but in all cases
subject to the approval of the Board. The salaries and all other
expenses of maintaining the Auditor's office shall be paid by the
Corporation. The Auditor of the Corporation and personnel under him may
be removed only by the Chairman of the Commission on Audit. chanroblesvirtualawlibrary
The representative of the Chairman of the Commission on Audit must have
at least ten (10) years experience as a certified public accountant.
Section 20. Coordination of Policies. — Unless
otherwise specifically prescribed by this Decree, the Corporation shall
coordinate its policies and operations with those of the Central Bank
of the Philippines, National Economic and Development Authority,
PHILIPPINE EXPORT COUNCIL, AND ALL RELEVANT DEPARTMENTS OF THE
GOVERNMENT INVOLVED IN EXPORTS.
Section 21. Availability of Foreign Exchange. —
Subject to the provisions of Republic Act No. 265, as amended,
particularly Section 74 thereof, the Central Bank of the Philippines
shall make available to the Corporation the necessary foreign exchange
to enable it to comply with its obligations incurred under this Decree.
Section 22. Supervision and Examination by the
Central Bank. — The Corporation shall be subject to the supervision and
examination by the Central Bank of the Philippines in accordance with
Republic Act No. 265, as amended and Republic Act No. 337, as amended.
Section 23. Applicability of Central Bank Foreign
Exchange Regulations. — The Guarantee operations and all other
transactions of the Corporation involving foreign exchange shall be
subject to the applicable foreign exchange regulations of the Central
Bank.
Section 24. Tax Exemption. — Notwithstanding the
provision of any general or special law to the contrary, the
Corporation, its assets, property, income and transaction shall be
exempt from all taxation and government fees and charges.
Section 25. Non-Applicability of WAPCO Standards and
Scales. — The Corporation shall not be subject to standards and salary
scales prescribed by the Wage and Position Classification Office.
Section 26. Applicability of the Corporation Law and
Civil Service Law. — The provisions of the Corporation Law and Civil
Service Law shall apply to the Corporation insofar as they are not
inconsistent with the provisions of this Decree.
Section 27. Repealing Clause. — PRESIDENTIAL DECREE
NO. 1074 AND all laws and executive orders and parts thereof
inconsistent herewith are hereby repealed. chanroblesvirtualawlibrary
Section 28. Effectivity Clause. — This Decree shall
take effect immediately.
Done in the City of Manila,
this 31st day of January, in the year of Our Lord, nineteen hundred and
seventy-seven.
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