Presidential Decree No. 618 (PD 618) — Amending Further Section Twelve of Republic Act Numbered Seventeen Hundred and Eighty-Nine, as Amended, Otherwise Known as the Reparations Law.
WHEREAS, under the present provisions of the Reparations Law
(Republic Act No. 1789, as amended), the acquisition and use of
reparations goods is limited to Filipino citizens and entities wholly
owned by Filipino citizens;
WHEREAS, the same law provides that groups, associations and
corporations which are recipient of reparations goods shall not permit a
subsequent change in ownership or control as shall at any time
thereafter, change the control or ownership wholly held therein by
Filipino citizens;
WHEREAS, entities that have fully paid for their reparations
goods are included in, and subject to the above restriction, and
cannot, therefore, avail of foreign investments for purposes of
expansion and development;
WHEREAS, due to the scarcity or non-availability of
financing from local sources, and in line with the declared policy of
the State of encourage foreign investments in certain areas of business
activity in order to accelerate the economic development of the country,
there is a need to amend the Reparations Law, in order to allow foreign
investments in certain cases;
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 12 of Republic Act No. 1789, as amended, as
follows:
SECTION 1. The fifth paragraph of Section 12 of Republic Act
No. 1789, as amended, is hereby amended to read as follows:
"SEC. 12. * * *
"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 President of the Philippines on a case to case basis upon
recommendation of the National Economic and Development Authority,
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, on condition that the
corporation or association shall maintain Filipino ownership of at least
seventy per centum of the capital stock outstanding and entitled to
vote, and that seventy per centum of the members or the Board of
Directors shall be Filipino citizens: Provided, further, That the
corporation or association in which such foreign investment has been
made shall report the same to the Board of Investments within thirty day
after the investment is received by it, and investments made in the
form of foreign exchange or other assets actually transferred to the
Philippines shall also be registered with the Central Bank of the
Philippines pursuant to Section 2(2) of Republic Act No. 5455, as
amended. It shall further contain a provision that any transfer of
ownership, whether by virtue of a private contract or through court
proceedings shall be to Filipino citizens or to entities wholly owned by
Filipino citizens; Provided, however, That, subject to the approval
of the President of the Philippines on a case to case basis upon
recommendation of the National Economic and Development Authority,
transfer of ownership of such capital goods which have already been
fully paid for may be made to corporations or associations organized and
existing under the laws of the Philippines of which at least seventy
per centum, of the capital stock outstanding and entitled to vote is
owned and held by Filipino citizens, and at least seventy per centum of
the Board of Directors are Filipino citizens, who shall begin
utilizing them in such projects as the National Economic and Development
Authority shall determine within one year from notice of the
Authority's decision."
SEC. 2. All provisions of existing laws, decrees orders, rules
and regulations, or parts thereof, in conflict or inconsistent
herewith, are hereby repealed or modified accordingly.
SEC. 3. This Decree shall take effect immediately.
Done in the City of Manila, this 20th day of December, in the
year of Our Lord, nineteen hundred seventy-four.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
