AMENDING FURTHER SECTION TWELVE OR REPUBLIC ACT NUMBERED SEVENTEEN HUNDRED AND EIGHTY-NINE, AS AMENDED, OTHERWISE KNOWN AS THE REPARATIONS LAW.

• Number: Presidential Decree No. 934
• Sections: 4

Preamble

WHEREAS, under the present provisions of the Reparations Law

(Republic Act No. 1789, as amended), the acquisition and use of

reparations goods is limited to Filipino citizens or to entities at

least seventy per centum of the capital stock outstanding and entitled

to vote is owned and held by Filipino citizens;

WHEREAS, certain Filipino-owned vessels thus acquired have

passed their economic lives resulting in high operating costs and low

operating efficiency and in turn adversely affecting the viability of

the Philippine merchant fleet;

WHEREAS, the said vessels may be resold in the world market

at prices favorable to the owners, in particular; and the industry in

general;

WHEREAS, the sale of those vessels at the said advantageous

prices shall generate substantial funds needed for the acquisition of

more modern and efficient replacement vessel in line with the fleet

modernization program 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 decree and order, and make as part of the law of the land the

further amendment of Section 12 of Republic Act No. 1789, as

amended as follows:

Section 1

SECTION 1. The fifth paragraph of Section 12 of Re public

Act No. 1789, as amended, is hereby amended to read as follows:

"SECTION 12. x x x x

"The contract of sale shall bear the conditions that no

capital goods thus acquired shall be resold, leased or in any other

manner disposed of except to Filipino citizens or to entities wholly

owned by Filipino citizens who shall continue the utilization

thereof in the projects for which the goods were originally

intended or in similar projects included in the economic

development program of a similar priority, subject, however,

to the further condition that groups, associations and

corporations which are recipient of such goods shall not permit

any subsequent change in ownership or control as shall at any

time thereafter change the control or ownership wholly held

therein by Filipino citizens: Provided, however, that

subject to the approval of the President of the Philippines on a case to

case basis upon recommendation of the National Economic and

Development Authority, recipient corporations or associations

winch have fully paid for such goods may allow foreign

equity participation therein when the same is necessary

for further development and expansion, on condition that the

corporation or association shall maintain Filipino ownership

of at least seventy per centum of the capital stock

outstanding and entitled to vote, and that seventy per centum of

the members of the Board of Directors shall be Filipino citizens: Provided,

further that the corporation or association in which such foreign

investment has been made shall report the same to the Board of

Investments within thirty days after the investment is received by it,

and investments made in the form of foreign exchange or other

assets actually transferred to the Philippines shall also be registered

with the Central Bank of the Philippines pursuant to Section 2(2)

of Republic Act No. 5455, as amended. It shall further contain a

provision that any transfer of ownership, whether by virtue of a

private contract or through court proceedings shall be to Filipino

citizens or to entities wholly owned by Filipino citizens; Provided,

however, that subject to the approval of the

President of the Philippines on a case to case basis

upon recommendation of the National Economic and Development

Authority, transfer of ownership of such capital goods which

have already been fully paid for may be made to

corporations or associations organized and existing under

the laws of the Philippines of which at least seventy

per centum of the capital stock outstanding and entitled to

vote is owned and held by Filipino citizens, and at least seventy per

centum of the Board of Directors are Filipino citizens, who

shall begin utilizing them in such projects as the National Economic and

Development Authority shall determine within one year from notice

of the Authority's decision; Provided, finally, that, in case

the capital goods consist of vessels which have already been fully paid

for, transfer of ownership thereof to non-Filipino citizens or entities

may, subject to approval by the Maritime Industry Authority, be allowed

provided that the net proceeds therefrom shall be re-invested in the

acquisition of more modern vessels."

Section 2

SEC. 2. All provisions of existing laws, decrees, order,

rules and regulations, or parts thereof, in conflict or inconsistent

herewith, are hereby repealed or modified accordingly.

Section 3

SEC. 3. This Decree shall take effect immediately.

Done in the City of Manila this 14th day of May in the year of

our Lord, nineteen hundred and seventy-six.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

JUAN C. TUVERA

Presidential Assistant