WHEREAS, it
is the objective of the State to achieve a self-reliant defense posture;chanroblesvirtualawlibrary
WHEREAS, the achievement of this goal requires the immediate
prosecution of national defense projects for the acquisition of
military material; chanroblesvirtualawlibrary
WHEREAS, the implementation of projects under the Self-Reliant Defense
Program will generate labor, spur industrial and commercial activities,
and conserve foreign exchange resources;chanroblesvirtualawlibrary
WHEREAS, the majority of these projects will require financing from
foreign sources;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution as Commander-in-Chief of all the Armed Forces of the
Philippines, and pursuant to Proclamation No. 1081, dated September 22,
1972, and General Order No. 1, dated September 22, 1972, as amended, do
hereby order and decree as follows:cralaw:red
Section 1. The Secretary of National Defense, in
behalf of the Government of the Republic of the Philippines, is hereby
authorized to enter into contracts, under such terms and conditions as
may be agreed upon, with any natural or juridical person, with or
without public bidding, for the manufacture or procurement of supplies,
equipment, or components thereof, facilities, utilities and
appurtenances thereto which are necessary for the manufacture,
servicing, or operation of such supplies, equipment or components
thereof needed for national defense and covered by the Self-Reliant
Defense Program approved by the President of the Philippines, any
provision of law, including Section Six Hundred and Seven of the
Revised Administrative Code, Commonwealth Act Numbered Five hundred
forty-one, Act Numbered Four thousand two hundred thirty-nine, Republic
Act Numbered Five thousand one hundred-three and other related laws to
the contrary notwithstanding.
Section 2. Foreign and local prime contractors
engaged or proposing to engage in the manufacture and/or fabrication of
defense material for the government in accordance with the Self-Reliant
Defense Program may be registered and avail of the incentives under
Republic Act Numbered Five thousand one hundred eighty-six as amended,
with respect to defense industries covered by the program and listed
under a supplemental annual investment priority plan, upon
recommendation of the Department of National Defense and the National
Economic and Development Authority. In the interest of national
security, publication of the above supplemental list shall be dispensed
with and the Board of Investments shall adopt a special procedure in
the processing of application for registration by defense contractors
under this Program.
Section 3. For the purpose of this Decree and any
provision of law to the contrary notwithstanding, the President of the
Philippines is hereby authorized in behalf of the Republic of the
Philippines, to contract such loans, credits or indebtedness including
supplier's credit, deferred payment arrangements upon such terms and
conditions as may be agreed upon with any local or foreign source or
lender not exceeding Three hundred million United States dollars, or
its equivalent in other foreign currencies at the exchange rate
prevailing at the time of the contracting of the loans, credits, or
indebtedness, suppliers credits and deferred payment arrangements and
at terms of payment of not less than ten years and to enter into and
conclude bilateral agreements involving other forms of official
assistance such as grants and commodity credit arrangement or
indebtedness as may be necessary with Government of foreign countries
with whom the Philippines has diplomatic or trade relations or which
are members of the United Nations, their agencies, instrumentalities or
financial institutions or with reputable international organizations or
non-governmental national or international lending institutions or
firms extending supplier's credit or deferred payment arrangements:
Provided, That such loan, credit or indebtedness shall be incurred only
after the plans for such project have been prepared by the Department
of National Defense and approved by the President of the Philippines;
Provided, further, That such loans, credits or indebtedness shall be
incurred only when the Commissioner of Budget has certified that for
the fiscal year in question, funds are appropriated and programmed to
meet the servicing of the external debt of the public sector, including
the loan, credit or indebtedness proposed to be contracted, and that
the counterpart peso funding requirements of the projects for which
such loans, credits or indebtedness are being contracted have been
programmed and shall be available as and when needed for the completion
of the project; Provided, finally, That in contracting any loan, credit
or indebtedness under this Act, the President of the Philippines, when
necessary may agree to waive or modify the application of any law
granting preferences or imposing restrictions on international public
bidding.
Section 4. The President may authorize the lending of
the proceeds of such loans, credits or indebtedness to the Development
Bank of the Philippines, which shall administer said proceeds in
accordance with the agreement with foreign creditor, for relending,
subject to terms and conditions which the President may impose, to the
principal contractor or sub-contractor, to meet the direct peso costs
of projects authorized under this Decree; Provided, That the
Development Bank of the Philippines shall pay the Republic of the
Philippines at least the principal, interest and other charges on such
loans, credit or indebtedness turned over to it.
The Development Bank of the Philippines, with the approval of the
President of the Philippines, may also guarantee such loans, credits or
indebtedness secured by a principal contractor or sub-contractor
directly from local or foreign sources to cover all or part of the cost
of performance of contracts herein referred to.
Section 5. Any provision of law to the contrary
notwithstanding and in order to enable the Republic of the Philippines
to pay the principal, interest, taxes and other normal banking charges
on the loans, credits or indebtedness, all revenues realized from the
projects financed by such loans, credits or indebtedness shall be
turned over in full, after deducting actual and necessary expenses for
operation and maintenance of said projects, to the National Treasury by
the Department of National Defense, which is hereby appropriated for
the purpose as when they shall become due. In cases where the revenues
realized are insufficient to cover the principal, interests and other
charges, such portion of the budgetary savings may be necessary to
cover the balance or deficiency shall be set aside by the Department of
National Defense exclusively for this purpose; Provided, That if there
still remain a deficiency, the necessary amount is hereby appropriated
out of the funds in the National Treasury to cover the payment of
principal and interest of such loans, credits and indebtedness as and
when they shall become due; Provided, further, That the Monetary Board
of the Central Bank shall make provisions out of current foreign
exchange receipts for the foreign exchange requirements to service the
external debts. chanroblesvirtualawlibrary
Section 6. Upon recommendations of the Secretary of
Finance in consultation with the National Economic and Development
Authority and approval of the President of the Philippines, loans,
agreements, as well as, contracts, unless otherwise falling under
Section 2 of this Act, involving the availment of or utilization of the
proceeds of loans, credits or indebtedness obtained under the
provisions of this Act, may provide for the exemption from taxes,
charges or other levies. Loans, credits or indebtedness incurred
pursuant to this Decree, the payment of the principal, interests and
other charges thereon, which are secured from Government of foreign
countries or from lending institutions of organizations owned or
controlled by said foreign governments, shall be exempted from the
payment of all taxes, fees, and other charges. chanroblesvirtualawlibrary
Section 7. The amount of at least One hundred million
pesos is hereby appropriated yearly under the SRDP Program budget of
the AFP, to carry out the provisions and purposes of this Decree. The
Budget Commission is hereby authorized to release the amount to the
Department of National Defense upon request thereof.
Section 8. All provisions of existing laws, orders,
and regulations contrary to, or inconsistent with this Decree are
hereby repealed or modified accordingly.
Done in the City of Manila,
this 19th day of March, in the year of Our Lord, nineteen hundred and
seventy-four.
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