WHEREAS,
the Government's Development Plan entails a massive investment in order
to sustain and advance the social and economic development heretofore
attained for the welfare of the nation; chanroblesvirtualawlibrary
WHEREAS, sizeable portion of the funding requirements of the
Development Plan has to be generated from foreign borrowing
particularly to provide the foreign exchange costs for the importation
of capital equipment, materials and technical services urgently needed
to maintain the sustained and continuing implementation of the various
priority developmental projects embarked upon by the Government;chanroblesvirtualawlibrary
WHEREAS, the present ceiling of US$1 Billion or its equivalent in other
foreign currencies on the aggregate amount of foreign loans that may be
contracted directly by the National Government, and US$500 Million or
its equivalent in foreign currencies that may be incurred under
government guarantee by eligible entities including government-owned
and/or controlled corporations and financial institutions, prescribed
under the Foreign Borrowing Act which was enacted in 1970, have
balances considered insufficient to meet the foreign borrowing program
formulated consistent with national development goals of the
government; 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 that;chanroblesvirtualawlibrary
Section 1. Section 2 of Republic Act Numbered Four
Thousand Eight Hundred Sixty, as amended, is further amended to read as
follows:cralaw:red
"Sec. 2. The total amount of loans, credits or
indebtedness, excluding interests and other normal banking charges
which shall not be in excess of those imposed or charged by the
International Bank for Reconstruction and Development, the Asian
Development Bank or other reputable international organization or
non-governmental national or international lending institution, which
the President is authorized to incur under Section one of this Act
shall not exceed five billion United States dollars or its equivalent
in other foreign currencies at the exchange rate prevailing at the time
the loans, credits or indebtedness are incurred at terms of payment of
not less than 10 years except those contracted in the interest of
national security and rehabilitation resulting from natural calamities:
Provided, that the price, interest rates and other charges on loans,
credits or indebtedness from non-governmental national or international
lending institutions or firms extending supplier's credits or deferred
credit arrangements shall be determined by the rules and regulations
which may be promulgated by the Central Bank: Provided, finally, That
seventy-five per centum of such total authorized amount of five billion
United States dollars or its equivalent in other currencies shall be
incurred for projects of the public sector and twenty-five per centum
thereof shall be utilized for projects of the private sector and that
no individual, partnership, cooperative, association or private
corporation shall be allowed to borrow more than fifteen per centum of
the total of such loans, credits, indebtedness authorized to be
incurred for relending by the Development Bank of the Philippines or
any other government financial institution except those who may
undertake projects whose financial requirements are in excess of such
limitation, in which case the recommendation of the National Economic
and Development Authority and the approval by the President to exceed
such limit is required. chanroblesvirtualawlibrary
"The Central Bank of the Philippines shall promulgate and enforce such
measure as shall be necessary to reduce the external debt service
requirements to an annual level not exceeding twenty per centum of the
average of the foreign exchange receipts of the immediately preceding
year."
Section 2. Section three of the same Act is hereby
further amended by inserting a new paragraph after the last sentence
thereof, to read as follows:cralaw:red
"The total amount of loans, credits or indebtedness incurred, and the
proceeds of bonds, securities or other evidences of indebtedness
floated or issued, which may be guaranteed by the President under this
Section shall not be more that two and one half billion United States
Dollars or its equivalent in other foreign currencies at the exchange
rate prevailing at the time the guarantee is made excluding interest
and other normal banking charges imposed or charged by the
International Bank for Reconstruction and Development, the Asian
Development Bank and other similar international financial
institutions." chanroblesvirtualawlibrary
Section 3. Any provision of law, decree, rules or
regulations, inconsistent herewith are hereby repealed, amended or
modified accordingly.
Section 4. This Decree shall take effect immediately.
DONE in the City of Manila,
this 23rd day of December, in the year of Our Lord, nineteen hundred
and seventy-four.
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