EXECUTIVE ORDER NO. 1002 - DECLARING THE ACCRUED INCOME FROM AFP OPERATIONS AND EXERCISE OF REGULATORY FUNCTIONS AS TRUST RECEIPTS AND GRANTING THE CHIEF OF STAFF, AFP THE AUTHORITY IN THE USE THEREOF AS AN EXEMPTION FROM Sec. 50 OR PRESIDENTIAL DECREE 1177

WHEREAS, Sec. 50 of 1177 provides that all income from government instrumentalities shall accrue to the unappropriated surplus of the General Fund unless specifically provided by law;

WHEREAS, Sec. 50 of PD 1177 regulates the recording and application of special, fiduciary and trust funds;  

WHEREAS, Sec. 40 of PD 1177 defines the use of special budgets for lump sum appropriations;

WHEREAS, Sec. 2 of the General Provisions, Batas Pambansa Blg. 866 further reiterates the provisions of Sec. 40 and Sec. 51 of PD 1177;

WHEREAS, the AFP realizes revenue from certain operations and in the implementation of statutory and regulatory functions;

WHEREAS, the AFP appropriations must be augmented with additional funds from and within the AFP sources to meet the pressing demands or counter-insurgency.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:

Section 1. Authority to Use Income. — The accrued income of the AFP from its operations and exercise of various regulatory functions is declared as AFP Trust Receipts as an exemption from Sec. 50 of PD 1177. The full amount of the cited income shall be deposited in full to an authorized depository bank. Increments or the whole amount thereof shall be made available to the Chief of Staff, AFP to augment AFP Appropriations without complying with the requirements of a special budget per provisions of Sec. 5 of PD 1177.

Sec. 2. Authority to Collect Fees. — The AFP is authorized to collect payment for the direct cost of operation from the various government agencies requesting for the use of AFP equipment and facilities; the utilization of the income described thereof shall be in accordance with Section 1 above.

Sec. 3. Rules and Regulations. — The Minister of the Budget and the Minister of Defense shall issue such rules and regulations that will effectively carry out the provisions of the Executive Order subject to the concurrence of the Chairman, Commission on Audit.  

DONE in the City of Manila, this 25th day of January in the year of Our Lord, nineteen hundred and eighty-five.
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