AMENDING PRESIDENTIAL DECREE NUMBER FOUR, ENTITLED "PROCLAIMING THE CREATION OF THE NATIONAL GRAINS INDUSTRY DEVELOPMENT ADMINISTRATION AND PROVIDING FUNDS THEREFOR."

• Number: Presidential Decree No. 699
• Sections: 6

Preamble

WHEREAS, it is declared policy of the state to promote the

integrated growth and development of the grains industry so as to

provide adequate and continuous food supply to the nation and contribute

to the national economy;

WHEREAS, to carry out and implement the foregoing policy,

Presidential Decree No. 4 was promulgated creating the National Grains

Industry Development Administration, otherwise known as the National

Grains Authority, hereafter referred to as the Authority;

WHEREAS, despite the various measures adopted to attain

self-sufficiency in rice, corn and other grains, it appears that the

private sector is somewhat lukewarm or slow to engage in the production

of such grains, especially so in the light of the problems and

difficulties arising from the large-scale production of such grains and

the development of virgin and undeveloped lands;

WHEREAS, the government spends a big sum of money every year

in the importation of rice and/or corn, which amount could be used to

accelerate the integrated growth and development of the grains industry

in the country;

WHEREAS, it is deemed necessary that the Authority take a

more active and dynamic part in the current national effort to attain

self-sufficiency in rice, corn and other grains; and

WHEREAS, recent developments and continuing scientific and

technological studies on grains production, processing and marketing

have revealed that the foregoing policy will best be attained by vesting

the Authority with supplementary responsibilities and powers;

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 Presidential Decree No. 4 be amended as

follows:

Section 1

SECTION 1. Section 5, sub-section (b) paragraph (XI) is

hereby amended to read as follows: "XI, Performs such other functions as

may be necessary to carry into effect the provision of this Act, including

but not limited to, the development, culture or production of grains,

and the establishment, 'acquisition and/or operations of grains

processing, handling, storage and transport facilities."

Section 2

SEC. 2. Section 6, subsection (a) paragraph III, is hereby

amended to read as follows: "III. To own, lease, operate or otherwise

hold buildings, equipment and such other immovable properties as may be

necessary to carry out its functions."

Section 3

SEC. 3. Section 6, subsection (a) is hereby further amended

to incorporate the following new paragraphs:

"(XVIII) Whenever the Authority determines that to accomplish

its production, processing, marketing and other incidental functions, it

is necessary to contract indebtedness, it shall by a resolution,

stating the purpose for which the indebtedness is to be incurred and

citing the project study designed for the purpose, so declare and

authorize the Authority's execution or issuance of, and establish the

terms and conditions to be contained in such bonds, loan agreements, or

other evidences of indebtedness necessary thereof. Such resolution shall

become valid and effective upon approval by the President of the

Philippines and prior recommendation of the Secretary of Finance.

"With respect to domestic indebtedness to be incurred by the

Authority, the bonds or other evidences of indebtedness issued for the

purpose shall contain such terms, conditions, privileges, exemptions and

guarantees as are specified below.

"(1) Such bonds or other evidences of indebtedness a) shall be

registered form and transferable at the Central Bank of the Philippines;

b) shall not be sold at less than par; c) shall be payable ten years or

more from date of issue, as may be determined by the Secretary of

Finance before their issuance, but shall be redeemable, upon the

election of the council, after five years from such date of issue; and

d) shall bear interest at an annual rate to be determined before their

issuance by the Secretary of Finance. The interest may be payable

quarterly, semi-annually or annually, as determined by the Secretary of

Finance in consultation with the Monetary Board of the Central Bank of

the Philippines before date of issuance, and both the principal and

interest shall be payable in legal tender of the Philippines.

"(2) The bonds or other evidences of indebtedness shall be

exempt from the payment of all taxes by the Republic of the Philippines,

or by any authority, branch, division or political sub-division

thereof, which fact shall be stated upon their faces; and by virtue of

this Decree are hereby made securities in which all public offices,

political subdivisions, commercial banks, insurance companies and

associations, investment houses, financing companies, savings banks and

savings institutions, including savings and loan associations,

executors, administrators, guardians, trustees and fiduciaries in the

Philippines may properly and legally invest their own funds or the funds

within their control, and the same shall be receivable as collateral in

any transaction with the government, its agencies and

instrumentalities, including government-owned or controlled corporations

and government banking and financial institutions in which such

collateral is required. Said instruments may be made payable both

as to principal and interest in Philippine currency or any readily

convertible currency;

"(3) A sinking fund shall be established by the National Grains

Authority in such manner that the total annual contribution thereto,

accrued at such rate of interest as may be determined by the Secretary

of Finance in consultation with the Monetary Board, shall be sufficient

to redeem at maturity the bonds issued under this sub-section. The

sinking fund shall be under the custody of the Central Bank of the

Philippines, which shall invest the same, subject to the approval of

the council and the Secretary of Finance in consultation with

the Monetary Board: Provided, That the proceeds thereof

shall accrue to the Authority;

"(4) The Republic of the Philippines hereby guarantees the

payment by the Authority of both the principal and the interests of the

bonds or other evidences of indebtedness, and shall pay such principal

and interest in case the Authority fails to do so; and there are hereby

appropriated out of the general funds in the National Treasury not

otherwise appropriated the sums necessary to make the payments so

guaranteed; Provided, That the sums so paid by the Republic of

the Philippines shall be refunded by the Authority: and Provided, That

the Authority, to assure such refunding, shall establish reserves or

sinking-funds and comply with such other restrictions and conditions as

the Secretary of Finance may prescribe and establish for that purpose.

"With respect to foreign indebtedness to be incurred by the

Authority, such may be contracted, in the forms of loans, credits

convertible foreign currencies, or other forms of indebtedness, from

foreign governments or any international financial institution or fund

sources, including foreign private lenders, the total outstanding amount

of such indebtedness, exclusive of interest, shall not exceed five

hundred million United States dollars (US$500M) or the equivalent

thereof in other currencies. The President of the Philippines, by

himself or through his duly authorized representative, is hereby

authorized to negotiate and to so contract with foreign governments or

any international financial institution or fund source in the name and

on behalf of the Authority; and is further authorized to guarantee,

obsolutely and unconditionally, as primary obligor and not merely as a

surety, in the name and on behalf of the Republic of the Philippines,

the repayment of any indebtedness thereby contracted and the payment

thereon of any due interest charge, up to the limited amount authorized

by the foregoing, which shall be over and above the amounts which the

President is authorized to guarantee under Republic Act No. 6142, and

also to guarantee the performance of all or any of the obligations

undertaken by the Authority in the territory of the Republic of the

Philippines pursuant to loan agreements entered into pursuant to this

paragraph. ANY INdebtedness contracted under this paragraph and the

payment of the principal thereof and of any interest or other charges

thereon, as well as the importation of machinery, equipment materials,

supplies and services by the Authority, paid from the proceeds of any

such contracted indebtedness, shall also be exempt from all direct and

indirect taxes, fees, imposts, other charges and restrictions,

including import restrictions, by the Republic of the Philippines, or by

any authority, branch, division or political subdivision thereof.

"Investment in bonds, promissory notes, debentures and other

evidences of indebtedness of the Authority acquired by financial

institutions, subject to the provisions of Republic Act No. 6389 as

amended, including its implementing regulations, shall be considered

sufficient compliance with the requirements of said Act and its

implementing regulations.

"All funds so acquired and realized by virtue of this power to

contract indebtedness, interests and other income incidental thereto and

income from other operations, projects or activities of the Authority

shall be administered by it except such other funds the administration

of which is specifically provided for by other provisions of

Presidential Decree No. 4.

"(XIX) To purchase, lease or otherwise acquire lands, whether

public or private, for the cultivation and production of rice, corn and

other grains;

"In the exercise of this power, the Authority shall have the

authority to engage and retain any person, firm or corporation, private

or public, to render technical services in the development, cultivation

or operation of such lands as it may have acquired by purchase, lease,

or other means. Moreover, the Authority shall have also the power to

effect advance payment of the stipulated fees.

"(XX) To sell, lease, mortgage, pledge or otherwise dispose of

the property, assets or undertaking of the Authority or any part thereof

as the Authority may deem fit.

"(XXI) To adopt, alter, and use a corporate seal which shall be

judicially noticed, to sue and be sued; and otherwise to do and perform

any and all acts, and to exercise any and all powers as may be necessary

to carry into effect the provisions of this Act or as are essential to

the proper conduct of its operations.

"(XXII) In order to immediately implement the programs

envisioned in this Decree, an initial sum of ten million pesos

(P10,000,000) is hereby set aside from the Authority's corporate funds

and for this purpose, the Administrator is hereby authorized to dispose

the said amount as he may deem fit, subject to the usual accounting and

auditing requirements."

Section 4

SEC. 4. Any provision of Presidential Decree No. 4 and of any

law inconsistent with this Decree are hereby repealed, amended or

modified accordingly.

Section 5

SEC. 5. This Decree shall take

effect immediately.

Done in the City of Manila, this 12th day of May, in the year of

Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary