Presidential Decree No. 621-A — Further Amending Sections 2 and 3 of Republic Act Numbered Forty-Eight Hundred Sixty as Amended (Re: Foreign Borrowing Act.)
WHEREAS, the Government's Development Plan entails a
massive investment in order to sustain and advance the social and
economic development heretofore attained' for the welfare of the nation;
WHEREAS, sizeable portion of the funding requirements of the
Development Plan has to be generated from foreign borrowing
particularly to provide the foreign exchange costs for the importation
of capital equipment, materials and technical services urgently needed
to maintain the sustained and continuing implementation of the various
priority developmental projects embarked upon by the Government;
WHEREAS, the present ceiling of US$1 Billion or its
equivalent in other foreign currencies on the aggregate amount of
foreign loans that may be contracted directly by the National
Government, and of US$500 Million or its equivalent in foreign
currencies that may be incurred under government guarantee by eligible
entities including government-owned and/or-controlled corporations and
financial institutions, prescribed under the Foreign Borrowing Act which
was enacted in 1970, have balances considered insufficient to meet the
foreign borrowing program formulated consistent with national
development goals of the Government;
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 that:
SECTION 1. Section 2 of Republic Act Numbered Four Thousand
Eight Hundred Sixty, as amended, is further amended to read as follows:
SEC. 2. The total amount of loans, credits or
indebtedness, excluding interests and other normal banking charges which
shall not be in excess of those imposed or charged by the International
Bank for Reconstruction and Development, the Asian Development Bank or
other reputable international organization or non-governmental national
or international lending institution which the President is authorized
to incur under Section one of this Act shall not exceed five billion
United States dollars or its equivalent in other foreign currencies at
the exchange rate prevailing at the time the loans, credit or
indebtedness are incurred at terms of payment of not less than 10 years
except those contracted in the interest of national security and
rehabilitation resulting from natural calamities: Provided, That
the price, interest rates and other charges on loans, credits or
indebtedness from non-governmental national or international lending
institutions or firms extending supplier's credits or deferred credit
arrangements shall be determined by the rules and regulations which may
be promulgated by the Central Bank: Provided, finally, That
seventy-five per centum of such total authorized amount of five
billion United States dollars or its equivalent in other currencies
shall be incurred for projects of the public sector and twenty-five per
centum thereof shall be utilized for projects of the private sector
and that no individual, partnership, cooperative, association or
private corporation shall be allowed to borrow more than fifteen per
centum of the total of such loans, credits, indebtedness authorized
to be incurred for relending by the Development Bank of the Philippines
or any other government financial institution except those who may
undertake projects whose financial requirements are in excess of such
limitation, in which case the recommendation of the National Economic
and Development Authority and the approval by the President to exceed
such limit is required.
"The Central Bank of the Philippines shall promulgate and
enforce such measure as shall be necessary to reduce the external debt
service requirements to an annual level not exceeding twenty per
centum of the average of the foreign exchange receipts of the
immediately preceding year."
SEC. 3. Any provision of law, decree, rules or regulations,
inconsistent herewith are hereby repealed, amended or modified
accordingly.
SEC. 4. This Decree shall take effect immediately.
Done in the City of Manila, this 23rd day of December, in the
year of Our Lord, nineteen hundred and seventy-four.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary
SEC. 2. Section three of the same Act is hereby further
amended by inserting a new paragraph after the last sentence thereof, to
read as follows:
"The total amount of loans, credits or indebtedness incurred,
and the proceeds of bonds, securities or other evidences of indebtedness
floated or issued, which may be guaranteed by the President under this
Section shall not be more than two and one half billion United States
Dollars or its equivalent in other foreign currencies at the exchange
rate prevailing at the time the guarantee is made excluding interest and
other normal banking charges imposed or charged by the International
Bank for Reconstruction and Development, the Asian Development Bank and
other similar international financial institutions."
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
