GRANTING AN INCENTIVE FOR THE RESUMPTION OF OPERATIONS OF FORECLOSED INDUSTRIAL FACILITIES AND OTHER ASSETS

• Number: Presidential Decree No. 1992
• Sections: 5

Preamble

WHEREAS, the properties and other assets of several

industrial corporations have been foreclosed, particularly by creditor

government financial institutions, to partially satisfy the said corporations'

outstanding obligations to the Government;

WHEREAS, foreclosure has left the debtor corporations with

virtually no equity and operating assets;

WHEREAS, thousands of industrial workers and their families

have been dislocated and unemployed for a long time as a result of the shutdown

of operations occasioned by the default of the borrower corporations and toe

subsequent foreclosure of their mortgaged properties;

WHEREAS, it is essential to the national economic recovery

in general and to the general welfare of displaced industrial workers in

particular that the operations of foreclosed industrial facilities and other

assets should be resumed:

WHEREAS, certain government financial institutions have

actually been able to resume the operation and management of the foreclosed

properties of borrower corporations, but are now saddled with huge tax

obligations to the Government relative to the ownership, operation, foreclosure

and transfer of the defaulting borrowers' assets;

WHEREAS, these creditor institutions and borrower

corporations are presently not in a position to pay their tax obligations in

full to the Government;

WHEREAS, the general welfare of thousands of industrial

workers and ultimately the success of the national economic recovery efforts,

would be jeopardized if the Government does not support the viability of the

entities concerned;

WHEREAS, one way of ensuring the viability of entities who

resume the operation and management of foreclosed properties, would be to forego

the tax obligations of the creditor institutions and the borrower corporations

to the Governments;

WHEREAS, in the view of the present economic emergency,

there is a need to act expeditiously to preserve and promote the general welfare

of thousands of industrial workers and to ensure national economic recovery;

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

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

decree:

Section 1

SECTION 1. Government financial institution who are able,

directly or through a subsidiary or subsidiaries, to resume the operation and

management of the foreclosed properties of borrower industrial corporations,

shall be exempt from the payment of all taxes, fees and charges of whatever kind

and nature, whether national or local, that are due by reason of the foreclosure

and transfer to the said institutions of the assets of the defaulting borrower,

as well as the subsequent transfer of the same assets to the said institutions'

subsidiary or subsidiaries.

Section 2

SEC. 2. All taxes, fees, charges and royalties due as of

December 31, 1985 and payable to the Government by borrowers —corporations whose

properties have been foreclosed and subsequently operated and managed by

creditor government financial institutions, directly or through a subsidiary or

subsidiaries, are hereby condoned; Provided, however, That the

condonation herein granted shall not in any manner be interpreted to include any

further and outstanding liability of the borrowers to the government financial

institutions concerned for loan, guarantee or credit accomodations extended to

the said borrowers.

Section 3

SEC. 3. All laws, executive, or parts, rules and

regulations, and other enactments, or parts thereof, inconsistent with the

provisions of this Decree, are hereby repealed, amended or modified

accordingly.

Section 4

SEC. 4. This Decree shall take effect immediately.

DONE in the City of Manila, this 31st day of October, in the year of Our

Lord, nineteen hundred and eighty-five.