Presidential Decree No. 790 (PD 790) — Further Amending Sections Six and Twelve of Republic Act Numbered Seventeen Hundred and Eighty-Nine, as Amended, Otherwise Known as the Reparations Law.
WHEREAS, Section 6 and 12 of Republic Act No. 1789, as
amended, require private end-users of reparations goods and services to
put up collaterals sufficient to cover the cost thereof and/or the
amount of their restructured accounts;
WHEREAS, said sections of the law further require private
end-users to pay an interest of 12% per annum on the cost of the goods
and services payable in installments and/or the amount of their
restructured accounts;
WHEREAS, said private end-users find it difficult to comply
with said requirements considering that they also have to obtain further
financing from other sources for the putting up and operation of their
projects;
WHEREAS, a relaxation of said requirements would greatly
help private end-users in the successful prosecution of their projects,
thus enabling them to contribute to the economic progress of the
country; and
WHEREAS, it is the policy of the Government to assist and
promote private industry to enable them to help in the building up of
the national economy.
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 the amendment of Sections 6 and 12 of
Republic Act No. 1789, as amended, as follows:
SECTION 1. The following portion of Paragraph (a-1) of
SEC. 2. The following portions of the various paragraphs of
SEC. 3. The paragraph inserted by Presidential Decree No.
746 after the third paragraph of Section 12 of the same law is hereby
repealed.
SEC. 4. The amendments contained in this Decree shall
have retroactive effect as of November 9, 1973, the date of effectivity
of Presidential Decree No. 332.
SEC. 5. All provisions of existing laws, decrees,
orders, rules and regulations, or parts thereof, inconsistent herewith
are hereby repealed or amended accordingly.
Section 6 of Republic Act No. 1789, as amended, relative to the putting
up of collaterals, is hereby amended to read as follows:
"SEC. 6. (a-1) To issue procurement orders for the
acquisition of reparations goods and/or services on the basis of the
agreed schedule. The procurement order shall specify, among others, the
following: (1) the name of the applicant end-users; (2) the item in the
agreed schedule; (3) the name of the project; (4) the amount of the
procurement order; and (5) the date of issuance of the procurement
order. The amount of each procurement order shall be strictly in
accordance with the allocation for each project as agreed upon between
the Philippine and Japanese Governments. The procurement orders for all
the projects shall be issued only after the conclusion of the agreed
schedule. No procurement order for the acquisition of goods and/or
services intended for government agencies shall be issued by the
Commission until after it shall have duly ascertained and verified that
the agencies concerned have (1) the capacity and have duly provided for
the payment of the 2% service fee and all incidental charges in
connection with procurement and delivery of the goods and/or services,
and (2) the technical capacity to take delivery and utilize efficiently
the goods applied for, and unless all the following conditions shall
have been previously complied with: (1) the government agency concerned
must have previously prepared and submitted to the satisfaction of the
Commission a financial, economic and technological study concerning the
feasibility of the project together with the complete plans and
specifications thereof; (2) the application must have been previously
approved by resolution of the Commission; (3) the project must be among
those specifically included in the reparations schedule agreed upon and
effective between the Philippine and Japanese Governments at the time of
the issuance of the procurement order; and (4) the agreed schedule
showing the names of the applicant end-users must have been published in
accordance with this Act. No procurement order for the acquisition of
reparations goods and/or services intended for private parties shall be
issued by the Commission until after it shall have duly ascertained and
verified that the applicant concerned (1) has enough financial
resources and capacity to pay, and (2) has the technical capacity to
take delivery and utilize efficiently the goods applied for, and unless
all the following conditions shall have been previously complied with:
(1) the private applicant end-users concerned must have previously
prepared and submitted to the satisfaction of the Commission a
financial, economic and technological study of the project together with
the complete plans and specifications thereof favorably endorsed as
prescribed in Section two of this Act, and a certification from the
Securities and Exchange Commission or the Bureau of Commerce, as the
case may be, attesting that the applicant end-user concerned is
qualified under this Act; (2) the application must have been previously
approved by resolution of the Commission; (3) the project concerned must
be among those specifically included in the reparations schedule agreed
upon and effective between the Philippine and Japanese Governments at
the time of issuance of the procurement order: Provided, That no
procurement order shall be issued until after the private applicant
end-user concerned shall have made a cash down payment for the project
applied for which shall be 5% of the value of the project computed at
the current rate of exchange of the peso to the U.S. dollar prevailing
at the time of payment; and (4) the agreed schedule showing the names of
the applicant end-users must have been published in accordance with
this Act. The private applicant shall be required to submit proof to
substantiate that both his financial resources and capacity to pay are
commensurate with the value of the goods and/or services applied for,
and that he has had experience or has contracted an appropriate number
of experts in the particular field. He shall also be required to
obligate himself to put up the performance bond specified in Section
12-A of this Act before the delivery of the goods and/or services:
Provided, further, That in the case of corporations, the principal
officers thereof shall be required to sign a guarantee contract whereby
they shall be jointly and severally liable with the corporation to
answer for the obligation so contracted. Notwithstanding the foregoing,
no procurement order shall take effect until after the lapse of one week
after its final publication indicating the name and address of the
applicant end-user, the name of the project subject of the procurement
order, and the specific item in the reparation schedule agreed upon and
effective between the Philippine and Japanese Governments at the time of
issuance of the procurement order, three successive times every other
day in two newspapers of general circulation, one in Tagalog and one in
English, in the Philippines, and both in English in Japan, by the
Commission and the Mission, respectively. As required herein, the
Commission shall publish each and every procurement order within one
week after its issuance, and the Mission, within one week after receipt
of the procurement order. Any procurement order which does not wholly
comply with all of the above requirements shall ipso facto be considered
null and void, if such non-compliance has been through the fault or
negligence of the applicant end-user. After the procurement order for
reparations intended for a specific end-user has been properly issued in
accordance with the foregoing, such procurement order may not be
revoked or suspended except when the end-user in whose favor the
procurement order has been issued is adjudged, after due investigation
wherein he has been given the opportunity to be heard and represented by
counsel, to be disqualified or found guilty of fraud in connection with
his application under this Act: Provided, That pending final
decision, the procurement of the goods, except actual
delivery thereof to the end-user concerned, shall not be suspended: Provided,
however, That an end-user who has been found disqualified by the
Commission may appeal to the President within thirty days from the
receipt of the Commission's decision. The decision of the President
which must be made not later than thirty days after the submission of
the appeal to him, shall be final, and shall become effective upon
receipt thereof by the end-user concerned. In case the end-user fails to
appeal, the decision of the Commission shall become final immediately
after the lapse of the period for appeal. A party who has been adjudged
disqualified shall forfeit the down payment without prejudice to any
action, criminal or otherwise, which may be taken against him by the
proper government agency. The Commission is hereby required to render a
decision on any complaint submitted to it regarding the qualification of
an end-user within ninety days from the date of the formal submission
of such complaint in writing."
Section 12 of the same law, as indicated hereunder, are hereby further
amended to read as follows:
"SEC. 12. Terms of Sale.—Capital goods and
complementary services intended for government projects, irrespective of
the classification of the project, shall be transferred to the agencies
concerned without cost; Provided, That said agencies shall pay
in cash a service fee of two (2) per cent of the cost of the goods
and/or services, and all incidental charges incurred in connection with
the procurement and delivery of such goods and/or services, computed at
the current rate of exchange of the peso to the U.S. dollar prevailing
at the time of payment. The government agencies concerned shall enter in
their books of accounts the peso F. O. B. value of the goods and/or
services received by them computed at the current rate of exchange of
the peso to the U.S. dollar prevailing at the time of delivery, as
follows:
National government offices, agencies, institutions
and/or instrumentalities depending solely on appropriations from the
National Assembly for their operating expenses shall enter the peso F.
O. B. value as additional appropriation for them.
National government offices, agencies, institutions
and/or instrumentalities with revolving funds provided by law shall
enter the peso F.O.B. value as additional appropriation for said
revolving fund.
National government offices, agencies, institutions and/or
instrumentalities with capital stock provided by law shall enter the
peso F.O.B. value as subscription of the Government to such capital
stock.
Government-owned or controlled corporations shall enter the
peso F.O.B. value as subscription of the Government to their capital
stock.
Provincial, city and municipal governments shall enter the
peso F.O.B. value as contribution of the National government to
their operating expenses.
The foregoing provisions shall also apply to all government
projects, irrespective of the classification of the projects, the
reparations goods and/or services of which have already been procured
and delivered to the government end-users concerned, and the contracts
for the transfer thereof shall be modified accordingly: Provided,
That whatever amount or amounts that may have already been paid by said
government end-users for service fee, incidental charges and/or the
peso F.O.B. value of the reparations goods and/or services, including
interest thereon, if any, shall not be refunded.
Capital goods and complementary services disposed of to private
parties as provided for in sub-section (a) of Section two hereof shall
be sold on cash or credit basis under rules and regulations as may be
determined by the Commission. All private end-users shall pay the peso
F.O.B. value of reparations goods and/or services received by them plus a
service fee of 2% of the value of such goods and/or services, and all
incidental charges in connection with the procurement and delivery
thereof, all computed at the current rate of exchange of the peso to the
U.S. dollar prevailing at time of delivery under the terms and
conditions provided herein. Sales on credit basis shall be payable on
installments: Provided, That the deposit or down payment required
to be paid under subsection (a-1) of Section 6 hereof shall be applied
as first payment without interest on the F.O.B. value on the date of
delivery of the reparations goods and/or services: Provided, further,
That in case of capital goods for the utilization of which an initial
investment before operation of not more than twenty per cent of the cost
of such goods is required, the first installment with interest shall be
paid on the third month after delivery of the goods, and in the case of
capital goods for the utilization of which an initial investment before
operation of more than twenty per cent of the cost of such goods is
required, and also in the case of ocean-going vessels, the first
installment with interest shall be paid on the twelfth month after
delivery of the goods, extendible when deemed to be justified by the
Commission not exceeding one year. The balance, in both cases, shall
be paid in equal annual installments within a period to be fixed by the
Commission considering the life expectancy of the goods but in no case
exceeding ten years from the date the first payment falls due, with
interest at 3% per annum and an additional interest of 1 ½% per month
for delinquency in the payment of installments: Provided, That in
the case of vessels, the procurement cost thereof shall be paid within
the period prorated for in Republic Act Numbered Fourteen Hundred and
Seven, as amended. Goods other than capital goods procured as
reparations shall be sold for cash only at prevailing prices for similar
goods.
* * * * * * *
"(a-1) The foregoing provisions of this Section, insofar as it
relates to the computation of the peso F.O.B. value of the reparations
goods and/or services, the execution of the sales contract and
corresponding schedule of payments, the time of application of the
deposit or down payment as first payment without interest and the due
date of the first installment with interest on the balance, and the
imposition of interest of 3% per annum on the balance and an additional
interest of 1½% per month for delinquency, shall also apply to all
projects of private end-users in the current 17th year reparations
schedule and to all other projects of private end-users where the
reparations goods and/or sendees have already been delivered but the
contracts and corresponding schedules of payment have not as yet been
executed at the time of the issuance of this decree, in which case, said
private end-users shall, within a period of three months from issuance
of this decree, execute the sales contracts and corresponding schedules
of payments, otherwise the sanction provided for under paragraph (a-2)
of this Section shall be taken against them.
"(a-2) All private end-users with pending accounts with the
Commission at the time of the Issuance of this Decree shall be allowed
to restructure their accounts beyond the maximum allowable period of
amortization as provided for under this Act: Provided, That said
end-users shall first be required to pay 10% of the total accrued
accounts at the time of the issuance of this Decree: Provided,
further, That interest at the rate of 3% per annum shall be imposed on
the restructured yearly amortization with an additional monthly interest
of 1½% for delinquency and said end-users shall be required to put up a
performance bond in an amount, equivalent to 10% of the value of the
restructured account, and in the case of corporations, the principal
officers thereof shall be required to sign the contract of
restructuring jointly and severally with the corporation: Provided,
finally, That all delinquent private end-users of reparations good
and/or services are hereby given a period of three (3) months within
which to restructure or update their accounts with the Commission
otherwise, the latter, with the assistance of the Armed Forces of the
Philippines, shall extrajudicially repossess said reparations goods and
attach all other assets of said private end-users and shall sell,
transfer, or otherwise dispose of the same in a manner as provided for
herein, without prejudice to such civil and/or criminal action that may
be taken against them under this Act and/or other existing laws. All
reparations goods so repossessed and/or to be repossessed shall be sold
through public bidding, or through negotiation if the public bidding
will fail, either by lot or by piece, at such price and under such terms
and conditions as may be determined reasonable by the Commission upon
the recommendation of an appraisal committee to be constituted! by the
Commission and in which at least one (1) member each must come from the
office of the Commission Auditor and the National Economic and
Development Authority: Provided, That government instrumentalities
will be given the first option to acquire the reparations goods which
they may need or can utilize, in which case said reparations goods shall
be transferred to them without cost and the peso book value thereof,
less depreciation if any, as determined by the Commission shall be
entered in their books of accounts in accordance with this Section. All
expenses incurred in connection with the transfer of said goods shall
be borne by the government agencies concerned.
* * * * * * *
SEC. 6. This Decree shall take effect immediately.
Done in the City of Manila, this 30th 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.)
ROBERTO V. REYES
Acting Executive Secretary
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
