FURTHER AMENDING SECTIONS 2 AND 3 OF REPUBLIC ACT NUMBERED FORTY-EIGHT HUNDRED SIXTY AS AMENDED (RE: FOREIGN BORROWING ACT.)

• Number: Presidential Decree No. 621-A
• Sections: 6

Preamble

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 1. Section 2 of Republic Act Numbered Four Thousand

Eight Hundred Sixty, as amended, is further amended to read as follows:

Section 2

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."

Section 3

SEC. 3. Any provision of law, decree, rules or regulations,

inconsistent herewith are hereby repealed, amended or modified

accordingly.

Section 4

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

Section 2

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."