Section 7
SEC. 7. Section 12 of the same Act is 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 pf 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: "(1) 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. "(2) 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 fur said revolving fund. "(3) 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. "(4) Government-owned or -controlled corporations shall enter the peso F.O.B. value as subscription of the Government to their capital stock. "(5) 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 subsection (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 percent 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 percent 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 percent 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 installment falls due, with interest at twelve percent (12%) per annum and an additional interest of one and one-hall percent (1 1/2%) 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 provided 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. "In all transactions involving the transfer of capital goods and services from reparations to the authorized private parties specified in this Act, the sale shall be directly to end-users and not through middlemen. The contract of sale and the corresponding schedule of payment shall be executed upon delivery of the reparations goods and/or services pertaining to each allocation in a particular agreed schedule irrespective of whether or not the project has been given a complete allocation, or needs an additional allocation for completion or expansion, or has an additional allocation in the succeeding annual reparations schedule or schedules. All reparations machinery and equipment in the possession of private end-users, whether utilized or not, shall be declared 'Completely delivered' unless within 30 days from date of receipt of instructions to end-users, they shall file with the Commission their respective written proofs justifying their alleged claims. "The contract of sale shall bear the conditions that no capital goods thus acquired shall be resold, leased or in any 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 recipients 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. 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 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."