EXECUTIVE ORDER NO. 32
EXECUTIVE ORDER NO. 32 - DIRECTING
THE ESTABLISHMENT OF A PROGRAM FOR THE CONVERSION OF PHILIPPINE
EXTERNAL DEBT INTO EQUITY INVESTMENTS
WHEREAS, it has come to the
attention of the Government that Philippine external debt obligations
owed to commercial banks or financial institutions are being traded in
the secondary market;
WHEREAS, long-term equity investments in Philippine enterprises are
essential to economic developments;
WHEREAS, the magnitude of the external debt of the Philippines is
imposing a heavy burden on the country’s resources.
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Section 1. Declaration of Policy. — It is hereby
declared to be the policy of the Government (a) to stimulate long-term
equity investments in Philippine enterprises by both foreign investors
and Filipinos; (b) to encourage the repatriation to the Philippines of
foreign currency holdings of Philippine residents held abroad for the
purpose of capitalizing equity investments in the Philippines; (c) to
provide additional incentives for investments in designated sectors of
the Philippine economy that require prompt revitalization; and (d) to
reduce the external debt burden of the Philippines.
Sec. 2. The Central Bank of the Philippines shall
establish a program to convert Philippine external debt obligations
owed to commercial banks or financial institutions into equity
investments in Philippine enterprises. Investors, whether Filipino or
foreign, who hold or purchase such obligations and have such
obligations redeemed or paid in pesos by the borrower or obligor in
pesos may invest the peso proceeds in the equity of Philippine
enterprises, under such terms and conditions as the Central Bank of the
Philippines may prescribe, consistent with the objectives stated in
Section 1 of this Executive Order.
Sec. 3. Incentives, such as more liberal terms of
repatriation of investments and remittance of earnings from
investments, may be provided to investments in preferred sectors or
areas of the Philippine economy made under the program establish
pursuant to this Executive Order, as may be determined by the Monetary
Board of the Central Bank, taking into consideration sectors of the
economy that require prompt revitalization and foreign exchange
earnings industries.
Sec. 4. The Central Bank of the Philippines may
provide limitations to the repatriation of investments and remittance
of earnings from investments made under the program established
pursuant to this Executive Order, taking into consideration the
monetary, credit and exchange conditions and the terms of the general
restructuring of Philippine external debt obligations.
Sec. 5. The Central Bank of the Philippines may
impose and collect a reasonable application fee for each application
for the conversion of external debt into equity investment. The Central
Bank may also impose and collect for the account of the Government an
additional fee on a conversion transaction, taking into consideration,
among other things, the prevailing rates at which Philippine external
debt obligations are being traded in the secondary market.
Sec. 6. The Central Bank of the Philippines may
under such terms and conditions as the Monetary Board of the Central
Bank may prescribe and taking into consideration, among other things,
the prevailing rates at which Philippine external debt obligations are
being traded in the secondary market, the availability of credit and
the level of money supply, extend peso credits through banking
institutions to a government-owned or controlled corporation to enable
such corporation to reduce or pay its external debt obligations in
pesos in connection with conversion transactions under the program
established pursuant to this Executive Order.
Sec. 7. The Monetary Board, in coordination with
the Minister of Finance, shall promulgate the rules and regulations to
implement the provisions of this Executive Order subject to the
approval of the President.
Sec. 8. Any provision of law, decree, executive
order or other issuances inconsistent with this Executive Order are
hereby repealed or modified accordingly.
Sec. 9. This Executive Order shall take effect
immediately.
DONE in the City of Manila,
this 24th day of July, in the year of Our Lord, nineteen hundred and
eighty-six.
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Since 19.07.98.