AMENDING PRESIDENTIAL DECREE NO. 618 WHICH AMENDED REPUBLIC ACT NO. 1789, OTHERWISE KNOWN AS THE REPARATIONS LAW

• Number: Presidential Decree No. 1715
• Sections: 5

Preamble

WHEREAS, Presidential Decree No. (618) amended Section 12 of

Republic Act No. 1789, as amended, otherwise known as the Reparation Law, to

allow foreign equity not exceeding 30% in recipient corporations or associations

which have fully paid for the machinery and equipment granted under the said

Act, subject to the approval of the President upon recommendation of the

National Economic and Development Authority;

WHEREAS, the minimum requirement of seventy per cent (70%)

Filipino capitalization or stock ownership in said corporation had to be imposed

because the benefit of using said machinery and equipment should accrue to

Filipinos;

WHEREAS, after continued use, said machinery and equipment

have depreciated considerably since the bulk of these equipment were acquired in

the early days of the reparations grant which started in 1956 and ended in

1976;

WHEREAS, at present time, these equipment may no longer have

any meaningful value; and

WHEREAS, in order to facilitate the entry of foreign

investments in the said recipient corporations or associations in line with the

government policy of encouraging foreign equity participation in certain areas

of economic activity, the above limitation should be lifted since it serves no

useful purpose.

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

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

decree and order, and make as part of the law of the land, the amendment of

Section 1

SECTION 1. The fifth paragraph of Section 12 of Republic No.

1789, as amended, is hereby amended to read as follows:

"The contract of sale shall bear the conditions that no capital goods thus

acquired shall be resold, leased or in any other manner disposed of except to

Filipino citizens or to entities wholly owned by Filipino citizens who shall

continue the utilization thereof in the projects for which the goods were

originally intended or in similar projects included in the economic development

program of a similar priority, subject, however to the further, condition that

groups, associations and corporations which are recipient of such goods shall

not permit any subsequent change in ownership or control as shall at any time

thereafter change the control or ownership wholly held therein by Filipino

citizens: Provided, however, That, subject to the approval of the Board

of Investments, taking into account the condition of the equipment involved and

criteria for the entry of foreign investment under Republic Act No. 5455,

recipient corporations or associations which have fully paid for such goods may

allow foreign equity participation therein when the same is necessary for

further development and expansion.

Section 2

SEC. 2. All provisions of existing laws, decrees, orders,

rules and regulations, or parts thereof, in conflict or inconsistent herewith,

are repealed or modified accordingly.

Section 3

SEC. 3. This Decree shall take effect immediately.

DONE in the City of Manila, this 21st day of August, in the year of Our Lord,

nineteen hundred and eighty.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JOAQUIN. T. VENUS, JR.

Presidential

Assistant

Section 12

Section 12 of Republic Act No. 1769, as amended, as follows: