AMENDING REPUBLIC ACT NO. 245 ENTITLED "AN ACT AUTHORIZING THE SECRETARY OF FINANCE TO BORROW TO MEET PUBLIC EXPENDITURES AUTHORIZED BY LAW AND FOR OTHER PURPOSES"

• Number: Presidential Decree No. 142
• Sections: 3

Preamble

WHEREAS, Section 1 of Republic Act No. 245 provides that in

order to meet public expenditures authorized by law or to provide for

the purchase, redemption or refunding of any obligations, either direct

or guaranteed, of the Philippine Government, the Secretary of Finance,

with the approval of the President, after consultation with the Monetary

Board, is authorized to borrow from time to time on the credit of the

Republic of the Philippines such sum or sums as in his judgment may be

necessary, and to issue therefor evidences of indebtedness of the

Philippine Government;

WHEREAS, under subsection (a) through (c) of the same

section of the said Act, such evidences of indebtedness may be of the

following types:

"(a) Treasury bills issued on a discount basis and payable at

maturity without interest. Treasury bills may be offered for sale either

on a competitive basis or at a fixed rate of discount and may be made

payable at any date not later than one year from the date of issue.

"(b) interest-bearing certificates of indebtedness having

maturities not exceeding eighteen months from the date of issue.

"(c) Interest-bearing notes having maturities of not less than one

nor more than five years from the date of issue."

WHEREAS, the Government has continuously relied upon the

borrowing authority vested in the Secretary of Finance under R.A. No.

245 in meeting the pressing demands upon the General Fund into the

National Treasury whenever there is a short-fall in the revenue receipts

of the Government;

WHEREAS, under the present provisions of R.A. No. 245, the

Secretary of Finance, with the approval of the President is vested with

the authority to borrow from time to time for the purposes enumerated

therein, is restricted from issuing other forms of government debt

instruments or evidences of indebtedness having longer maturities and

appropriate features because of the limitations prescribed in the

aforementioned subsection (a) through (c) of Section 1 of the above

mentioned Act; and

WHEREAS, there is now a need for other types of

government security issues designed in line with market requirements and

made sufficiently attractive to suit the needs of various investor

groups;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers in me vested by the Constitution

as Commander-in-Chief of all the Armed Forces of the Philippines, and

pursuant to Proclamation No. 1081, dated September 21, 1972, and General

Order No. 1, dated September 22, 1972, as amended, do hereby adopt and

make as part of the laws of the land certain amendments to the

provisions of Republic Act No. 245 entitled "An Act Authorizing the

Secretary of Finance to Borrow to Meet Public Expenditures Authorized by

law, and For Other Purposes" as follows:

Section 1

SECTION 1. Section 1 of Republic Act Numbered Two

Hundred forty-five is hereby amended to read as follows:

"SECTION 1. In order to meet public expenditures

authorized by law or to provide for the purchase, redemption, or

refunding of any obligations, either direct or guaranteed of the

Philippine Government, the Secretary of Finance, with the approval of

the President of the Philippines, after consultation with the Monetary

Board, is authorized to borrow from time to time on the credit of the

Republic of the Philippines such sum or sums as in his judgment may be

necessary, and to issue therefor evidences of indebtedness of the

Philippine Government."

"Such evidences of indebtedness may be of the following types:

"a. Treasury bills issued on a discount basis or at par and

payable at maturity without interest. Treasury bills may be offered for

sale either on a competitive basis or at a fixed rate of discount or at

par and may be made payable at any date not later than one year from

the date of issue;

"b. Certificate of indebtedness having maturities not exceeding

eighteen months from the date of issue; and

"c. Treasury bonds, notes, securities or other evidences of indebtedness

having maturities of one year or more but not exceeding twenty-five

years from the date of issue."

"The Secretary of Finance, in consultation with the Monetary

Board, shall prescribe the form or forms, the interest and discount

rates, including whether such interest or discount is exempted from

taxation or not, 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 evidences of indebtedness issued under the authority of

this Act: Provided, however, That with respect to treasury

bills, certificates of indebtedness, and bonds, notes, securities and

other evidences' of indebtedness, such terms and conditions shall be

within the limitations prescribed in Subsection (a) through (c) of the

preceding paragraph: And provided, further, That actual issue,

placement, servicing and redemption of such securities shall be done

through the Central Bank of the Philippines, as provided in Sections one

hundred twenty-two, one hundred and twenty-three and one hundred

twenty-four of the Central Bank Act."

"The evidences of indebtedness issued under the authority of

this section may be made payable, both as to principal and interest in

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 specific securities, drawn by

lot, may be redeemed before maturity either at their face value or

above."

Section 2

SEC. 2. This Decree shall take effect immediately.

Done in the City of Manila, this 2nd day of March, in the year of Our

Lord, nineteen hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ALEJANDRO MELCHOR

Executive Secretary