Presidential Decree No. 768 (PD 768) — Amending Presidential Decree No. 198 Entitled "Declaring a National Policy Favoring Local Operation and Control of Water Systems; Authorizing the Formation of Local Water Districts and Providing for the Government and Administration of Such District; Chartering a National Administration to Facilitate Improvement of Local Water Facilities; Granting Said Administration Such Powers as Are Necessary to Optimize Public Service from Water Utility Operations, and for Other Purposes."
WHEREAS, it is the primary concern of the government to
develop an orderly and effective system of local water utilities,
particularly in the area of water supply and sewerage services;
WHEREAS, under Presidential Decree No. 198, the Government
declared as a national policy the local operation and control of water
systems; authorized the formation of local water districts; provided for
the administration of such districts, and chartered a national
administration to facilitate improvement of local water utilities;
WHEREAS, there is need to amend certain provisions of
Presidential Decree No. 198 in order to hasten and make more effective
the implementation and administration of the program of total
development and expansion of domestic water systems;
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 the amendment of Presidential Decree No. 198,
as follows:
SECTION 1. Section 3, paragraph (b) of Presidential Decree
No. 198 is hereby amended to read as follows:
"(b) Appointing Authority.—The person empowered to
appoint the members of the Board of Directors of a local water district
depending upon the geographic coverage and population make-up of the
particular district. In the event that more than seventy-five percent of
the total active water service connections of a local water district
are within the boundary of any city or municipality, the appointing
authority shall be the mayor of the city or municipality, as the case
may be; otherwise, the appointing authority shall be the governor of the
province within which the district is located: Provided, That if
the existing waterworks system in the city or municipality established
as a water district under this Decree is operated and managed by the
province, initial appointment shall be extended by the governor of the
province. Subsequent appointments shall be as specified herein.
"If portions of more than one province are included within the
boundary of the district, and the appointing authority is to be the
governor, then the power to appoint shall rotate between the governors
involved with the initial appointments made by the governor in whose
province the greatest number of service connections exists.
SEC. 2. Paragraphs (b), (c), (e) and last paragraph of
SEC. 3. Section 7 of the same decree is hereby amended to
read as follows:
"SEC. 7. Filing of Resolution.—A certified copy of
the resolution or resolutions forming a district shall be forwarded to
the office of the Secretary of the Administration. If found by the
Administration to conform to the requirements of Section 6 and the
policy objectives in Section 22, the resolution shall be duly filed. The
district shall be deemed duly formed and existing upon the date of such
filing. A certified copy of said resolution showing the filing stamp of
the Administration shall be maintained in the office of the district.
Upon such filing, the local government or governments concerned shall
lose ownership, supervision and control or any right whatsoever over the
district except as provided herein."
SEC. 4. Section 8 of the same decree is hereby amended to
read as follows:
"SEC. 8. Number and Qualifications.—The Board of
Directors of a district shall be composed of five citizens of the
Philippines who are of voting age and residents within the district. One
member shall be a representative of civic-oriented service clubs, one
member a representative of professional associations, one member a
representative of business, commercial, or financial organizations one
member a representative of educational institutions and one member a
representative of women's organizations. No public officials shall serve
as director."
SEC. 5. Section 11 of the same decree is hereby amended to
read as follows:
"SEC. 11. Term of Office.—Of the five initial
directors of each newly-formed district, two shall be appointed for a
maximum term of two years, two for a maximum term of four years, and one
for a maximum term of six years. Terms of office of all directors in a
given district shall be such that the term of at least one director, but
not more than two, shall expire on December 31 of each even-numbered
year. Regular terms of office after the initial terms shall be for six
years commencing on January 1 of odd-numbered years. Directors may be
removed for cause only, subject to review and approval of the
Administration."
Section 6 of the same decree, are hereby amended to read as follows:
"* * *
"(b) A description of the boundary of the district. In the case
of a city or municipality, such boundary may include all lands within
the city or municipality. A district may include one or more
municipalities, cities or provinces, or portions thereof: Provided,
That such municipalities, cities and provinces, or portions thereof,
cover a contiguous area. "(c) A statement transferring any and all
waterworks and/or sewerage facilities managed, operated by or under the
control of such city, municipality or province to such district pursuant
to to a contract authorized by this Title.
"* * *
"(e) The names of the initial directors of the district with the
date of expiration of the term of office for each which shall be on the
31st of December of first, second, or third even-numbered year after
assuming office, as set forth in Section 11 hereof.
" * * *
"If two or more cities, municipalities or provinces, or any
combination thereof, desire to form a single district, a similar
resolution shall be adopted in each city, municipality and province; or
the city, municipality or province in which 75% of the total active
service connections are situated shall pass an initial resolution to be
concurred in by the other cities, municipalities or provinces."
SEC. 7. Section 13 of the same decree is hereby amended to
read as follows:
"SEC. 13. Compensation.—Each director shall
receive a per diem, to be determined by the board, for each
meeting of the board actually attended by him, but no director shall
receive per diems in any given month in excess of the equivalent of the
total per diem of four meetings in any given month. No director shall
receive other compensation for services to the district.
"Any per diem, in excess of P50 shall be subject to
approval of the Administration."
SEC. 8. Section 20 of the same decree is hereby amended to
read as follows:
"SEC. 20. System of Business Administration.—The
Board shall, as soon as practicable, prescribe and define by resolution a
system of business administration and accounting for the district,
which shall be patterned upon and conform to the standards established
by the Administration. Auditing shall be performed by a certified public
accountant not in the government service. The Administration may,
however, conduct annual audits of the fiscal operations of the district
to be performed by an auditor retained by the Administration. Expenses
incurred in connection therewith shall be borne equally by the water
district concerned and the Administration."
SEC. 9. Section 23 of the same decree is hereby amended to
read as follows:
"SEC. 23. The General Manager.—At the first
meeting of the board, or as soon thereafter as practicable, the board
shall appoint, by a majority vote, a general manager and shall define
his duties and fix his compensation. Said officer shall serve at the
pleasure of the board."
SEC. 10. Section 24 of the same decree is hereby amended to
read as follows:
"SEC. 24. Duties—The duties of the General Manager
and other officers' shall be determined and specified from time to time
by the board. The general manager, who shall not be a director, shall
have full supervision and control of the maintenance and operation of
water district facilities, with power and authority to appoint all
personnel of the district: Provided, That the appointment of
personnel in the supervisory level shall be subject to approval by the
Board."
SEC. 11. Paragraph (b) of Section 31 of the same decree is
hereby amended to read as follows:
"(b) In-lieu Share.—As an incident to the acquisition of
the existing water system of a city, municipality, or province, a
district may enter into a contract to pay in-lieu share for such utility
plant, an annual amount not exceeding three percent (3%) of the
district's gross receipts from water sales in any year: Provided,
however, That no contract of this nature shall be executed during
the first five years of the existence of the district; and Provided,
further, That the Board of Directors shall determine that such
contract will not adversely affect or impair the fiscal position and
operations of the district as verified by the Administration."
SEC. 12. Section 32 of the same decree is hereby amended by
adding four new subsections therein, which shall read as follows:
"SEC. 32. Protection of Waters and Facilities of
District.—A district shall have the right to:
"(a) Commence, maintain, intervene in, defend and compromise
actions or proceedings to prevent interference with or deterioration of
water quality or the natural flow of any surface, steam or ground water
supply which may be used or useful for any purpose of the district or be
a common benefit to the lands or its inhabitants. The ground water
within a district is necessary to the performance of the district's
powers and such district is hereby authorized to adopt rules and
regulations subject to the approval of the National Water Resources
Council governing the drilling, maintenance and operation of wells
within its boundaries for purposes other than a single family domestic
use on overlying land. Any well operated in violation of such
regulations shall be deemed in interference with the waters of the
district.
"(b) Require a developer or builder of any structure within the
service areas of the district to extend or connect its pipeline
facilities to the district facilities whenever such development or
structure is within one hundred meters of existing district facilities
or whenever the district is willing to extend its facilities within one
hundred meters of said development or structure. For the purpose of this
section, development shall include the subdivision of land for any
purpose other than agricultural purpose, and structure shall mean any
building or facility to be used for residential, commercial or
industrial purposes.
"(c) Prohibit any person, firm or corporation from
vending, selling, or otherwise disposing of water for public purposes
within the service area of the district where district
facilities are available to provide such service, or fix
terms and conditions by permit for such sale or disposition of
water.
"(d) Safeguard and protect the use of its waters. For this
purpose, any person who installs any water connection without the
previous authority from the water district established under this
Decree; tampers water meters or uses jumpers or other devices whereby
water is stolen; stealls or pilfers water or water meters; knowingly
possesses stolen or pilfered water or water meters shall, upon
conviction, be punished by prison correccional in its minimum
period or a fine ranging from two thousand pesos to six thousand pesos,
or both. If the violation is committed with the connivance or permission
of an employee or officer of the water district, an employee or officer
shall, upon conviction, be punished by a penalty one degree lower than
prision correccional in its minimum period and forthwith be
dismissed and perpetually disqualified from employment in any utility or
service company owned or controlled by the government."
SEC. 13. Section 34 of the same decree is hereby amended to
read as follows:
"SEC. 34. Receipt, Deposit and Payment of District
Funds.— The treasurer shall receive, to the credit of the district
and in trust for its use and benefit, all monies belonging to the
district. All monies belonging to the District shall, where practicable,
be deposited by the treasurer in the Philippine National Bank."
SEC. 14. Section 35 of the same decree is hereby repealed.
SEC. 15. Section 36 of the same decree is hereby amended
to be known as Section 35 to read as follows:
"SECTION 35. Bonds or Other Evidence of Indebtedness.—A
district may borrow money to raise funds to pay all cost of any public,
improvements authorized by this Title and may issue negotiable or
non-negotiable bonds, promissory notes or other evidence of indebtedness
to support such borrowings. These obligations may be secured by a
mortgage, pledge, deed of trust of or any other encumbrance upon any of
its then owned or after-acquired real or personal property, assets or
revenues and the same shall constitute a lien as to the principal and
interest thereon, on all such property, assets or revenues. The
interests on such bonds or notes are exempt from all taxes, duties,
fees, imposts, or other charges of the national or local
governments."
SEC. 16. Two new sections are hereby inserted to be known as
SEC. 17. Section 37 of the same decree is hereby amended to
read as Section 38 as follows:
"SECTION 38. Rates and Charges.—Water—A district
may sell water under its control, under schedules of rates and charges
as may be determined by the Board, to any and all water users within the
district. Said schedule may provide for differential rates for
different categories of use and different quantity blocks. The district,
as far as practicable, shall fix such rates and charges for water as
will result in revenues which will:
"(a) Provide for reimbursement from all new water customers
for the cost of installation of new services and meters;
"(b) Provide for revenue from all water deliveries and
services performed by the district;
"(c) Pay the operating expenses of the district;
"(d) Provide for the maintenance and repairs of the
works;
"(e) Provide a reasonable surplus for replacement, extension
and improvements; and
"(f) Pay the interest and principal and provide a sinking fund
for the payment of debts of the district as they become due and
establish fund for reasonable reserves."
SEC. 18. Section 38, 39, 40 41, 42 and 43 of the same
decree are hereby amended to read as Section 39, 40, 41, 42, 43 and 44,
respectively.
SEC. 19. Section 44 of the same decree is hereby
amended to read as Section 45 as follows:
"SECTION 45. Dissolution.—A district may be
dissolved by resolution of its board of directors filed in the manner of
filing the resolution forming the district: Provided, however,
That prior to the adoption of any such resolution: (1) another public
entity has acquired the assets of the districts and has assumed all
obligations and liabilities attached thereto; (2) all bondholders and
other creditors have been notified and they consent to said transfer and
dissolution; and (3) a court of competent jurisdiction has found that
said transfer and dissolution are in the best interest of the public."
SEC. 20. Section 45, 46 and 47 of the same decree are
hereby amended to read as Sections 46, 47 and 48, respectively.
SEC. 21. Section 48 of the same decree is hereby amended
to read as Section 49 as follows:
"SECTION 49. Charter.—There is hereby chartered,
created and formed a government corporation to be known as the 'Local
Water Utilities Administration' which is hereby attached to the Office
of the President. The provisions of this Title shall be and constitute
the charter of the Administration."
SEC. 22. Section 49 of the same decree is hereby
amended to read as Section 50 as follows:
"SECTION 50. Purposes.—The Administration shall
primarily be a specialized lending institution for the promotion,
development and financing of local water utilities. In the
implementation of its functions, the Administration shall, among others:
(1) prescribe minimum standards and regulations in order to assure
acceptable standards of construction materials and supplies,
maintenance. operation, personnel training, accounting and fiscal
practices for local water utilities; (2) furnish technical assistance
and personnel training programs for local water utilities; (3) monitor
and evaluate local water standards; and (4) effect systems integration,
joint investment and operations, district annexation and deannexation
whenever economically warranted."
SEC. 23. Section 50 of the same decree is hereby amended to
read as Section 51 as follows:
"SECTION 51. Composition.—The Board of Trustees of
the Administration shall be composed of a chairman and four other
member all of whom shall be citizens of the Philippines.
"One trustee at any time shall have at least ten years
experience in banking, finance or business. One trustee at any time
shall possess sufficient background in the field of economics; one
trustee at any time shall have experience in management or systems
operations. Two trustees at any time shall be civil or sanitary
engineers with experience related to water supply or wastewater
operations. Not more than one trustee may represent a private
investor-owned utility. No elected official shall be entitled to act as a
trustee. At least three of the trustees must be employees of the
National Government.
"The General Manager shall be ex-officio member of the Board."
SEC. 24. Section 51 of the same decree is hereby amended to
read as Section 52 as follows:
"SECTION 52. Appointment and Term of Office.—The
trustees, with exception of the ex-officio member, shall be appointed by
the President of the Philippines. They shall serve a term of five years
each: Provided, That of the first four initially appointed, one
shall serve a term of five years, another for four years, the third for
three years, and the fourth for two years. Trustees may be removed for
cause only.
"The incumbent trustees holding office as such upon the
effectivity of this amendment shall continue to hold such office until
the expiration of their original terms as defined in their
appointments."
SEC. 25. Section 52 and 53 of the same decree are hereby
amended to read as Section 53 and 54, respectively.
SEC. 26. Section 54 of the same decree is hereby amended
to read as Section 55 as follows:
"SECTION 55. Compensation.—The Trustees shall each
receive a per diem as may be fixed by the Board for each meeting
actually attended by them: Provided, That the total of such per
diem in any one month for each Trustee, shall not exceed the equivalent
of the per diems for four meetings; Provided, further,
That per diems in excess of three hundred pesos per meeting shall
be subject to approval of the Office of the President; and Provided,
finally, That, in addition, each Trustee shall be reimbursed his
expenses incurred in connection with the performance of his functions in
such amount as may be determined by the Board of Trustees."
SEC. 27. Section 55 and 56 of the same decree are hereby
amended to read as Section 56 as follows:
"SECTION 56. By-laws.—The Board of Trustees shall
adopt a code of by-laws for the conduct of the affairs of the
Administration which may be amended from time to time by the affirmative
vote of four Trustees.
"Except as otherwise provided herein, the organizational
structure and staffing pattern of the Administration, the qualification
of the appointive officers and employees, the powers and
responsibilities of the officers, the internal procedure of the
Administration, and such other matters relative to the organization,
management and conduct of the affairs of the Administration shall be as
provided in the by-laws; Provided, That, the appointment of and
disciplinary action against officers and employees of the Administration
shall be done and effected pursuant to guidelines established by the
Board of Trustees."
SEC. 28. Section 57 of the same decree is hereby amend-to
read as follows:
"SECTION 57. Officers.—The Board shall elect a
chairman from among its members. In addition, the Board shall select a
secretary and a corporate legal counsel, each of whom shall not be a
trustee."
SEC. 29. The first paragraph of Section 58 of the same
decree is hereby amended to read as follows:
"SECTION 58. The General Manager and Other Employees.—The
Trustees shall select a general manager who shall not come from the
appointed trustees. The general manager shall receive compensation in an
amount as may be fixed by the Board, subject to the approval of the
President of the Philippines, but to no case less than fifty-four
thousand pesos per annum. The general manager shall employ and
appoint all additional personnel; Provided, That the appointment
of personnel in the supervisory level shall be subject to confirmation
by the Board.
"The incumbent manager holding office as such upon the
effectivity of this amendment shall continue to hold such office unless
sooner terminated by competent authority."
SEC. 30. Section 60 of the same decree is hereby amended to
read as follows:
"SECTION 60. Borrowing and Security Therefor.—The
Administration may borrow funds as authorized in Section 72 of this
Title, and issue as security therefor debentures or other evidence of
indebtedness constituting a lien on any and all securities, covenants
and obligations of local water utilities held by the Administration as
security for loans made to such local water utilities."
SEC. 31. Paragraphs (b), (c) and (d) of Section 61 of the
same decree are hereby amended to read, and a new paragraph is hereby
inserted which shall read, as follows:
"SECTION 61. Loans—* * * *
"(a) * * * *
"(b) Feasibility Study.—A feasibility study which may be
required by the Administration for any proposed project for which loan
funds are sought may be undertaken by the water district, the
Administration or by a consultant prequalified by the Administration.
"(c) Security.—The Administration may take as security
for such loans the authorized bonds or other evidence of debt by the
water district and a mortage on its properties;
"(d) Loan Documents and Procedures.—The Board of Trustees
shall adopt rules, loan documents and procedures to be used in the
granting of loans. Such rules shall include provisions
for security, payment and default.
"(e) Default.—In the event of default by the local water
district in the payment of principal or interest on its outstanding
bonds or other obligations to the Administration, the latter may,
without the necessity of judicial process, take over and operate the
facilities or properties of the district. For this purpose, the
Administration may designate its employees or any person or organization
to assume both the policy-making authority and the powers of
management, including but not limited to the establishment of water
rates and service charges, the dismissal and hiring of personnel, the
purchase of equipment, supplies or materials and such other actions as
may be necessary to operate the water district efficiently. Such
policy-making and management prerogatives may be returned to the Board
of Directors and the general manager of the water district,
respectively, when all of its overdue accounts have been paid, all its
reserve requirements have been satisfied and all the causes of default
have been met."
SEC. 32. Paragraph (e) of Section 62 of the same decree is
hereby amended to read as follows:
"SECTION 62. Regulations.—* * * *
"(e) Personnel.—The training of personnel who operate or
manage local water utilities. For this purpose, at least a majority of
the personnel of a local water district must have satisfactorily
completed appropriate training courses, programs or seminars conducted
by the Administration, and must be holders of a certificate of
completion or competence, as the case may be, before a certificate of
conformance is issued to the water district.
"For certain positions which the Administration may specify,
only those persons possessing, or in the case of subsequent
appointments, only persons who will undergo training and shall have
obtained within six months, a certificate of completion or competence,
as the case may be, shall be appointed."
SEC. 33. Paragraph (f) of Section 63 of the same decree is
hereby amended to read as follows:
"SECTION 63. Rate Review. * * * *
"(f) Payment of the interest and principal and provide a sinking
fund for payment of debts of the district as they become due and
establish a fund for reasonable reserves.
"The rates or charges established by such local water district
shall be subject to review by the Administration to establish compliance
with the above-stated provisions. Said review of rates or any charges
therein shall be the Board of Trustees, and in writing."
SEC. 34. Sections 67, 68 and 69 of the same decree are
hereby repealed, and five new sections are hereby substituted therefor
to be known as Section 67, 68, 69 70 and 71, which shall be read as
follows:
"SECTION 67. Capital Stock.—The authorized capital
of the Local Water Utilities Administration is Five Hundred Million
Pesos divided into Five Million shares of stock with a par value of One
Hundred Pesos per share which shall be subscribed by the National
Government and opened to subscription by private investors or
government financial institutions.
"SECTION 68. Payment for National Government
Shares.—All amounts previously released by the National Government
to the Revolving Fund of the Administration shall be credited as payment
for subscriptions to shares of stock at par value. Thereafter, the
National Government shall for each year beginning with fiscal year
1975-76 subscribe and pay for the necessary capitalization as programmed
during the year; Provided, That the amount programmed for each
year shall not be less than Fifty Million Pesos.
"SECTION 69. Operational Expenses.—The Board of
Trustees is hereby authorized to appropriate out of any funds of the
Administration, such amounts as it may deem necessary for the
operational and other expenses of the Administration including the
purchase of necessary equipment.
"SECTION 70. Charges.—To the extent that the
Administration performs services for the benefit and at the request of a
local water district or utility or a number of water districts,
utilities or organizations, it may levy fees or charges for such service
rendered.
"Charges may include an assessment against water districts or
utilities to finance those functions of the Administration which are of
general benefit to water districts or utilities including, but not
limited to general administration and supervision.
"SECTION 71. Receipt and Investment of Funds.—Whenever
the Administration receives money whether as payment for subscriptions
to shares of stock, principal repayments, interest income, payment for
services rendered or for any purpose whatsoever, it shall issue its own
receipts and provide for their safe keeping and investment under policy
guidelines as may be established by the Board of Trustees in accordance
with Department of Finance regulations."
SEC. 35. Section 70 of the same decree is hereby repealed.
Section 36 and Section 37, respectively, which shall read as follows:
"SECTION 36. Authority for Subsequent Borrowings.—Where
a water district has borrowed money from the Administration, the
district shall not borrow money or incur further obligations from other
sources without the prior written consent of the Administration.
"SECTION 37. Default.—In the event of the default
by the district in the payment of principal or interest on its
outstanding bonds or other obligations, any bondholder or creditor shall
have the right to bring an action before the appropriate court to
compel the payment of such obligation. If the bondholder or creditor
concerned is the Administration, it may, without the necessity of
judicial process, take over and operate the entire facilities, systems
or properties of the district. For this purpose, the Administration may
designate its employees or any person or organization to assume all
powers of policy-decision and the powers of management and
administration, including but not limited to the establishment of water
rates and charges, the dismissal and hiring of personnel, the purchase
of supplies, equipment and materials and such other actions as may be
necessary to operate the utility efficiently."
SEC. 37. Section 72 of the same decree is hereby amended to
read as Section 74 as follows:
"SECTION 74. Depository for Reserves.—Any local
water utility which is accumulating reserves for capital improvement may
make specified time deposits of the same to the Administration in the
manner authorized for banks in handling trust funds. Such funds shall
not be used for operating purposes by the Administration."
SEC. 38. Two new sections are hereby inserted to be known as
SEC. 39. Sections 73 and 74 of the same decree are hereby
amended to read as Sections 77 and 78, respectively.
SEC. 40. This Decree shall take effect immediately.
Done in the City of Manila, this 15th day of August, 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
Section 75 and Section 76 which shall read as follows:
"SECTION 75. Control and Supervision over All Releases
of Appropriations for Waterworks and Sewerage Systems.—Since the
Administration is charged with the development of local water utilities,
funds from prior and future appropriations of the National Government
for waterworks and sewerage systems in cities, municipalities, and
provinces that are covered by duly formed water districts shall be
released directly to the Administration for the account of the water
districts concerned. The Administration may, however, draw from such
account fees and charges for services rendered to the water district
concerned as specified in Section 70 of this Title.
"SECTION 76. Exemption from All Taxes, Duties, Fees,
Imposts and Other Charges by the Government.—To enable the
Administration to pay its indebtedness and obligations; and in
furtherance and effective implementation of the policies and objectives
of this Decree, the Administration is hereby declared exempt:
"(a) From the payment of all taxes, fees, imposts, charges,
costs and restrictions by the Government of the Republic of the
Philippines, its provinces, cities, municipalities, and other government
agencies and instrumentalities, and filing and service fees and other
charges of courts in any court or administrative proceedings in which it
may be a party;
"(b) From all income taxes, franchise taxes and realty taxes to
be paid to the National Government, its provinces, cities,
municipalities and other government agencies and instrumentalities; and
"(c) From all import duties, compensating taxes, wharfage fees
on import of foreign goods and equipment required for its operations
and projects."
SEC. 6. Section 12 of the same decree is hereby amended to
read as follows:
"SEC. 12. Vacancies.—In the event of a vacancy in
the board of directors occurring more than six months before expiration
of any director's term, the remaining directors shall within 30 days,
serve notice to or request the secretary of the district for nominations
and within 30 days thereafter a list of nominees shall be submitted to
the appointing authority for his appointment of a replacement director
from the list of nominees. In the absence of such nominations, the
appointing authority shall make such appointment. If within 30 days
after submission to him of a list of nominees the appointing authority
fails to make an appointment, the vacancy shall be filled from such list
by a majority vote of the remaining members of the Board of Directors
constituting a quorum. Vacancies occurring within the last six months of
an unexpired term shall also be filled by the Board in the above
manner. The director thus appointed shall serve the unexpired term
only."
SEC. 36. Section 71 of the same decree is hereby
amended to read as Sections 72 and 73 as follows:
"SECTION 72. Domestic Borrowing Authority.—The
Administration shall have the authority to borrow money from all
domestic loan sources whether government or private; Provided,
That its loans outstanding from domestic sources at any one time shall
not exceed One Billion Pesos."
"SECTION 73. Authority to Contract Foreign Loan.—The
Administration is hereby authorized to contract loans, credits, in any
convertible foreign currency or capital goods, and to incur indebtedness
from time to time with foreign governments, or any international
financial institutions or fund sources, including suppliers credits or
deferred payment arrangements, the total outstanding amount of which,
excluding interests, shall not exceed five hundred million United States
dollars or the equivalent thereof in other currencies, on terms and
conditions promulgated by the Secretary of Finance and the Monetary
Board for the accomplishment of its objectives; and to enter into and
execute contracts and other documents specifying such terms and
conditions.
"The President of the Philippines, by himself, or through
is duly authorized representative, is hereby authorized to
negotiate and contract with foreign governments or any international
financial institution or fund sources in the name and on behalf of the
Administration, one or several loans, for the purpose implementing the
Administration's program for the promotion and development of local
water utilities through the Administration's financing or lending
operations.
"The President of the Philippines, by himself or through his
duly authorized representative, is hereby further authorized to
guarantee, absolutely and unconditionally, as primary obligor and not as
mere surety, in the name and on behalf of the Republic of the
Philippines, the payments of the loans, credits and indebtedness up to
the amount herein authorized, over and above the amounts which the
President of the Philippines pursuant to loan agreements entered into
with foreign governments or any international financial institution
or fund sources.
"The loans, credits and indebtedness contracted under this
section shall be in accord with the provisions of the Foreign Borrowing
Act as amended."
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
