AN ACT STRENGTHENING THE GUARANTEE AND PAYMENT POSITIONS OF THE REPUBLIC OF THE PHILIPPINES ON ITS CONTINGENT LIABILITIES ARISING OUT OF RELENT' AND GUARANTEED LOANS BY APPROPRIATING FUNDS FOR THE PURPOSE.

• Number: Presidential Decree No. 1967
• Sections: 7

Preamble

WHEREAS, the current economic crisis amounts to a grave

emergency which affects the stability of the nation and requires immediate

action:

WHEREAS, the Republic of the Philippines as well as

government-owned or controlled corporations and/or government financial

institutions such as the Philippine National Bank, the Development Bank of the

Philippines and the Philippine Export and Foreign Loan Guarantee Corporations

have obtained various loans, relent substantial portion of its proceeds, and

have likewise extended guarantees on loans both of the public and private sector

to finance long-term economic and development projects;

WHEREAS, due to certain constrainst, contingent or

otherwise, payments on maturity schedules of relent and guaranteed loans

sometimes could not be made by loan end-users, and creditors make payment

demands and resort to calls on the guarantee of the Republic of the Philippine

either as primary obligor or as direct and indirect guarantor;

WHEREAS, to avoid cross default situations and to protect

and maintain the credit standing of the country, most specially in the

international community, the National Government makes prompt payments and/or

advances for all loans, including those relent and/or guaranteed by the Republic

of the Philippines, government—owned or controlled corporations and/or

government financial institutions;

WHEREAS, the issuance of this Decree is an essential and

necessary component of the National Recovery Program formulated to meet and

overcome the emergency;

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:

Section 1

SECTION 1. There is hereby appropriated, out of any funds in

the National Treasury not otherwise appropriated, such amounts as may be

necessary to effect payments on foreign or domestic loans, or foreign or

domestic loans whereon creditors make a call on the direct and indirect

guarantee of the Republic of the Philippines, obtained by:

a. the Republic of the Philippines the proceeds of which were relent to

government-owned or controlled corporations and/or government financial

institutions;

b. government-owned or controlled corporations and/or government financial

institutions the proceeds of which were relent to public or private

institutions;

c. government-owned or controlled corporations and/or financial institutions

and guaranteed by the Republic of the Philippines;

d. other public or private institutions and guaranteed by government-owned or

controlled corporations and/or government financial

institutions.

Section 2

SECTION 2. All repayments made by borrower institutions on

the loans for whose account advances were made by the National Treasury which

revert to the General Fund.

Section 3

SECTION 3. in the event that any borrower institution is

unable to settle the advances made out of the appropriation provided herein, the

Treasurer of the Philippines shall make the proper recommendation to the

Minister of Finance on whether such advances shall be treated as equity or

subsidy of the National Government to the institution concerned, which shall be

considered in the budgetary program of the Government.

Section 4

SECTION 4. The Minister of the Finance shall issue

appropriate rules and regulations to implement this decree.

Section 5

SECTION 5. All laws, decrees, executive orders and

regulations contrary or inconsistent with the provisions of this Decree are

hereby repealed or amended accordingly.

Section 6

SECTION 6. This Decree shall take effect immediately.

DONE in the City of Manila, this 11th day of January, in the year of Our

Lord, nineteen hundred and eighty-five.