Section 12
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. * * * * * * *