CREATING THE EXPORT CREDIT CORPORATION, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR, AND OTHER PURPOSES.

• Number: Presidential Decree No. 1785
• Sections: 22

Preamble

WHEREAS, the Government encourages, promotes and develops

the export of goods and services, and the establishment and operation of private

enterprises engaged in the manufacture of capital goods;

WHEREAS, the development of the export and capital goods

industry is hampered by the lack of proper credit, guarantee, and insurance

facilities at rates and on terms and conditions which will place the nation’s

experts at a competitive level in the international market and will enable local

industries to manufacture capital goods, likewise at levels competitive with

imported goods and services;

WHEREAS, there is a need to establish a government-owned or

controlled corporation to provide the required credit, guarantee and insurance

facilities at preferential rates and on liberal terms and conditions;

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 the following:

Section 1 Short Title.

SECTION 1. Short Title. – This Decree shall be

known as the “Character of the Export Credit Corporation.”

Section 2 Declaration of Policy.

SEC. 2. Declaration of Policy. – It is the policy

of the State to encourage, promote and develop the export of manufactured goods,

products, and other goods and services by extending credits guarantees, and

insurance covers at interest rates and charges and on an internationally

competitive basis, in order to attain a rising level of production and

employment, increase foreign exchange earnings and improve the country’s balance

of payments, accelerate the economic growth and development of the nation, and

secure to the Filipino people the benefits of such growth and development.

Section 3 Creation, Name, Domicile and Term.

SEC. 3. Creation, Name, Domicile and Term. – There

is hereby created a body corporate to be known as the Export Credit Corporation.

Its principal place of business shall be in Metropolitan Manila and it may

establish such offices, agencies, branches, subsidiaries and correspondents in

the Philippines or abroad as its business operations may require. It shall have

a term of fifty (50) years from the effectivity hereof, which shall be deemed

renewed for an equal period, unless sooner dissolved by law.

Section 4 Purposes.

SEC. 4. Purposes. – The Corporation shall have the

following purposes:

To promote and develop the export of goods and services;

To foster the development of capital goods industry; and

To provide the facility for the grant of direct credits and loans, financial

guarantees and insurance coverage to exporters and financial institutions, with

reference to their provision of credits or loans in support of the export of

Philippine goods and services at interest rates and charges and on a competitive

basis.

Section 5 Powers and Functions.

SEC. 5. Powers and Functions. – The Corporation

shall have the following powers and functions:

To extend direct loans or other credit facilities in Philippine or foreign

currency o any persons and entities in respect of the financing of export

contracts and foreign trade transactions including sale of domestically

manufactured capital goods at competitive interest rates and charges;

To give or make arrangements for the giving of guarantees covering political

and commercial risk to, or for the benefit of, persons or entities engaged in

business in the Philippines, banks and financial institutions, in connection

with the financing of export, manufacture treatment of goods, the rendering of

services, or any other matter which in the determination of the Corporation

promotes the export trade and import-substitution industry. The guarantee, given

or arranged as herein provided, shall be on such terms and conditions as the

Corporation may deem proper; provided, that the Corporation shall not given, or

make arrangement for, performance guarantees;

To make grants to, or subsidize, in Philippine or foreign currency, any

persons or entities for the purpose of supplementing any interest receivable or

received by them as consideration for their provision of such facilities as

aforementioned, and for persons or entities engaged in business in the

Philippines to purchase, discount, rediscount, sell and negotiate, with or

without its indorsement, notes, drafts, bills of exchange, acceptances,

including banker’s acceptances and other evidence of indebtedness in connection

therewith;

To enter into contracts or insurance with any persons or entities to insure

them against the risk of war, expropriation, restrictions on remittances and

such other risks as may appear to the Corporation to be non-commercial risks, in

respect of, or in connection with, export contracts or transactions;

To act as an agent for any persons, entity, government or agency of a

government in respect of or in connection with export contracts or transactions;

To issue bonds and to borrow money from local and/or foreign sources;

To invest its funds in any activity related to export and

import-substitution and in any bonds or securities issued and/or guaranteed by

the Government of the Philippines;

To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the

shares of the capital stock of, or any bond, security of other corporations or

associations of this or any other country; and while the owner of said stock, to

exercise all the rights of ownership, including the right to vote thereon;

To acquire assets, real or personal, or interest therein and encumber or

otherwise dispose the same as it may deem proper necessary in the conduct of its

business;

To determine its organizational structure, and the number and salaries of

its officers and employees;

To establish and maintain offices, branches, agencies, subsidiaries,

correspondents or any other units within or outside the Philippines as may be

needed by the Corporation and reorganize or abolish the same as it may deem

proper;

To adopt By-Laws for the regulation of its proceedings; prescribing the

duties of officers and employees of the Corporation; delegating to President the

conduct of any business of the Board of Directors; fixing the salaries, fees or

other enumeration to be paid to the Directors; and generally, for the conduct

and management of its activities;

To sue and be sued;

To adopt and use a corporate seal which shall be judicially noticed;

To perform such acts and exercise such functions as may be necessary for the

attainment of the purpose and objectives herein specified;

To promulgate such rules and regulations as may be necessary to carry out

the purposes of this Decree; and

To perform such other functions as may be provided by

law.

Section 6 Restriction on powers.

SEC. 6. Restriction on powers. – The Corporation is

not a bank within the meaning of Republic Act Numbered Three Hundred

thirty-seven (General Banking Act), as amended, and as such, can not perform

commercial banking functions, except as provided herein.

Section 7 Capital Stock.

SEC. 7. Capital Stock. – The Corporation shall have

an authorized capital stock of TEN BILLION PESOS (P10,000,000,000) divided into

ten million (10,000,000) shares with a par value of P100,000 per share, of which

P200,000,000 shall be originally subscribed and paid for by the Republic of the

Philippines. The remaining shares of stock may be subscribed and paid for by the

Republic of the Philippines or by government financial institutions.

Section 8 Governing Body.

SEC. 8. Governing Body. – The Corporation shall be

governed by a Board of Directors which shall be composed of eleven (11) members

as follows:

The Minister of Finance;

The Minister of Industry;

The Minister of Trade;

The Director General of the National Economic Development Authority;

The Minister of Budget;

The Solicitor General;

The Governor of the Central Bank of the Philippines;

The Chairman of the Board of Governors of the Development Bank of the

Philippines;

The Chairman of the Board of Directors of the Philippine National Bank;

The President of the Corporation to be appointed by the President of the

Philippines for terms of five (5) years;

One representative from the private sector to be appointed by the President

of the Philippines for terms of five (5) years;

In making the appointment of the President of the Corporation and the

representative from the private sector, the President shall base his selection

on the integrity, experience and expertise of the appointee.

The Minister of finance and the Minister of Industry shall sit respectively

as ex officio Chairman and Vice Chairman of the Board. The other officers of the

Corporation shall be appointed by the Board.

Section 9 Duties and responsibilities of the President.

SEC. 9. Duties and responsibilities of the President.

– The President who shall be the chief executive of the Corporation shall

have the following duties and responsibilities:

To prepare the agenda for the meetings of the Board, and to submit for the

consideration of the Board such policies and measures as he believes necessary

to carry out the purposes and objectives of this Decree;

To execute, administer and implement the policies and measures approved by

the Board;

To direct and supervise the operations and administration of the

Corporation;

To represent the Corporation in all dealings with the other offices,

agencies and instrumentalities of the Government and with all persons and other

entities, public or private, domestic or foreign; and

To exercise such other powers and perform such other duties provided in the

by-laws and as may be vested in hum by the Board.

Section 10 Loans.

SEC. 10. Loans. – The Corporation is hereby

authorized to contract loans, credits, in any convertible foreign currency, and

incur indebtedness from time to time from foreign governments or any

international financial institutions or fund sources, or any other entities, on

such terms and conditions it shall deem appropriate for the accomplishment: of

its purposes and to enter into and execute agreements and other documents

specifying such terms and conditions.

The Republic of the Philippines, through the President of the Philippines or

his duly authorized representative, may guarantee, absolutely and

unconditionally, as primary obligor and not as surety merely, the payment of the

loans, credits and indebtedness issued up to the amount herein authorized, which

may be over and above the amount which the President of the Philippines is

authorized to guarantee under the republic Act Numbered sixty-one hundred

forty-two, as amended, as well as the performance of all or any of the

obligations undertaken by the Corporation in the territory of the Republic of

the Philippines pursuant to loan agreements entered into with foreign

governments or any international financial institutions of fund source.

Section 12 General Counsel.

SEC. 12. General Counsel. – The Solicitor General

shall perform the duties of General Counsel or the Corporation. Any provision of

law to the contrary notwithstanding, the Solicitor General and such personnel as

may be necessary to assist him In the performance of his duties and

responsibilities shall receive such allowances as shall be fixed by the

Board.

Section 13 Privileges and Incentive.

SEC. 13. Privileges and Incentive. – The

Corporation shall be entitled to all such privileges and incentives as are or

may be granted by law to private enterprises engaged in the export and capital

goods industries.

Other government offices and other government-owned or controlled

corporations shall extend whatever assistance may be needed by the Corporation

or any of its branches, offices and subsidiaries, including the detail of its

officials and employees to the Corporation or any of its subsidiaries on

full-time or part-time basis under arrangements satisfactory to the Corporation

or any of its subsidiaries and the government office or corporation concerned.

Said officials and employee, as well as the directors of the Corporation and its

subsidiaries, may receive allowance and other emoluments, notwithstanding the

provision of any law to the contrary.

The employee of the Corporation shall be entitled to all the retirement and

insurance benefits and leave privileges of government employees.

Section 14 Tax exemption.

SEC. 14. Tax exemption. – The Corporation shall be

exempt from all taxes, duties, fees, imposts and all other charges, except

corporate income tax, imposed directly or indirectly by the Republic of the

Philippines, its provinces, cities, municipalities and other government agencies

and instrumentalities.

Section 15 Exemption from Civil Service Law.

SEC. 15. Exemption from Civil Service Law. – The

offices and employees of the Corporation shall not be subject to the Civil

Service Law, rules and regulations, and shall likewise be exempt from the

regulations of the Wage and Position Classification Office.

Section 16

SEC. 16. Non-applicability of the laws on Usury and

Uniform Currency, and certain provisions of the Insurance Code. – The

provisions of Republic Act Numbered two thousand five hundred sixty-six (Usury

Law), as amended; Republic Act Numbered five hundred twenty-nine (Uniform

Currency Law), as amended; and Chapters III, IV and VIII, of Presidential Decree

No. 612 (The Insurance Code) shall not apply to the operation and activities of

the Corporation.

Section 17 Access to Rediscounting Facilities of the Central Bank.

SEC. 17. Access to Rediscounting Facilities of the

Central Bank. – The Corporation shall have access to the rediscounting

facilities of the Central Bank under the most favorable terms available for any

entity under Central Bank rules and regulations.

Section 18 Appropriations.

SEC. 18. Appropriations. – For the initial

requirements of the Corporation, the sum of TWO HUNDRED MILLION PESOS

(P200,000,000) is hereby set aside and appropriated from the General Funds not

otherwise appropriated.

Section 19 Reports.

SEC. 19. Reports. – The Corporation shall, within

three (3) months after the end of every fiscal year, submit its annual report to

the President of the Philippines. It shall likewise submit such periodic or

other reports as may be required of it from time to time.

Section 20 Separability Clause.

SEC. 20. Separability Clause. – Should any

provision of this Decree be held unconstitutional, no other provision hereof

shall be affected thereby.

Section 21 Repealing.

SEC. 21. Repealing. – All laws, decrees, executive

orders, administrative orders, rules and regulations inconsistent herewith are

hereby, amended or modified accordingly.

Section 22 Effectivity.

SEC. 22. Effectivity. – This Decree shall take

effect immediately.

Done in the City of Manila, this 15th day of January, in the year of Our

Lord, nineteen hundred and eighty-one.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant

Vol. 25, Vital Documents, Presidential Decree 1980-1981