Preamble
WHEREAS, the government financial institutions, particularly the Philippine National Bank and its subsidiary, the National Investment and Development Corporation, the Development Bank of the Philippines, the Government Service Insurance System, and the Social Security System, are the largest individual mobilizers of savings and investment capital in the country; WHEREAS, these institutions have a large and important role to play in the economic development of the country by reason of the magnitude of the resources they command for financing essential and high-priority programs and projects; WHEREAS, the loans and investments made by these institutions in favor of private projects and enterprises reflect the trust and confidence placed by these institutions in the ability and willingness of the recipients to use such funds efficiently and faithfully in pursuing the projects being financed and to manage their affairs in such a manner as to enable them to pay back their loans and investments to these institutions on due dates together with the income and charges thereon; WHEREAS, borrowing or obtaining investment funds from these government financial institutions is not a demandable right but is a privilege enjoyed by the recipients of such funds; WHEREAS, borrowers or recipients of investment funds from these financial institutions have a clear, legal and moral obligation to repay their obligations to these institutions on due dates; WHEREAS, a number of large borrowers from these institutions have long records of failure to pay their obligations when due; WHEREAS, said long-standing delinquencies deny said financial institutions of substantial cash inflow which could otherwise be used to finance other development projects for the benefit of the whole country; WHEREAS, borrowers who accumulate large arrearages have already received to the fullest extent the most lenient and patient consideration that government financial institutions can afford to give; WHEREAS, the government financial institutions prejudiced by such borrowers should not be unreasonably hampered in their efforts to recover their loans and investments in order to rechannel the same to new or additional projects that further enhance the development of the country; WHEREAS, it has been the experience of government financial institutions that their efforts to recover their large loans and investments are frequently prevented or delayed by action brought to the courts by such borrowers; WHEREAS, in many of foreclosure/collection cases brought to court, legal niceties and technicalities are invoked in their own favor by delinquent borrowers to cover and distract the court's attention away from the undeniable and compelling fact of their delinquencies with government financial institutions; WHEREAS, one of the grounds usually invoked by delinquent borrowers in seeking restraining orders and/or injunctions from the courts to block the foreclosure by government financial institutions on their loans are alleged discrepancies between the accounting records of the creditor and the debtor with respect to the amount of the outstanding obligations of the debtor, when as a matter of fact the arrearages have reached such proportions as to render said discrepancies insignificant; WHEREAS, it has been shown by the experience of government financial institutions that in instances where extrajudicial foreclosure on large loans is successfully pursued, the assets, aside from land, that form part of the foreclosed collaterals, including buildings, machinery, equipment, materials, furniture and fixtures, are usually pilfered or lost rendering it necessary that the foreclosing government creditor have a writ of possession issued in its favor without delay after the foreclosure auction sale; and WHEREAS, the accumulation of such large delinquencies by borrowers from government financial institutions are not in accord with the principle of discipline being instilled in the people and promoted by the New Society; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, as amended by Proclamation No. 1104, dated January 17, 1973, as amended, in order to effect the early collection of delinquent loans from government financial institutions and enable them to continue effectively financing the development needs of the country; and in accordance with desired policies of achieving changes and reforms in the social and economic structure of our society, hereby order and decree: