EXECUTIVE ORDER NO. 120
EXECUTIVE ORDER NO. 120 - DIRECTING
THE NATIONAL GOVERNMENT, ITS DEPARTMENTS, BUREAUS, AGENCIES AND
OFFICES, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, TO
ADOPT COUNTER-TRADE AS A SUPPLEMENTAL TRADE TOOL WITH RESPECT TO THE
IMPORTATION OR PROCUREMENT OF FOREIGN CAPITAL EQUIPMENT, MACHINERY,
PRODUCTS, GOODS AND SERVICES
WHEREAS, under Section 13, Article
XII of the 1987 Constitution, the State is mandated to pursue a trade
policy that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and
reciprocity;
WHEREAS, the adoption of a policy on countertrade is aimed at
compensating the foreign exchange expended for the importation or
procurement of foreign capital equipment, machinery, products, goods
and services by the national government, its agencies or offices
including government-owned or controlled corporations, as well as to
reciprocate for such importation or procurement through arranged
counter exports of Philippines traditional or non-traditional products
to the country of the supplier or any third country, or through product
buy back, offsets or investments.
WHEREAS, countertrade arrangements are expected to result in the
opening of new markets for Philippine products and services, overcome
quota and trade restrictions of other countries, and provide for
technology transfer and industrial growth, particularly in strategic
industries, such as energy, transport, infrastructure,
telecommunications, and defense, as well as those listed under the
Investments Priorities Plan and the Industrialization Modernization
Program; and
WHEREAS, the adoption of a policy on countertrade by the public sector
will spur economic development and help the country achieve
“newly-industrialized country” status by the year 2000.
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines by virtue of the powers vested in me by law do hereby
order:
Section 1. Coverage. — All departments, bureaus,
agencies, offices and instrumentalities, including government-owned or
controlled corporations, are hereby directed to adopt countertrade as a
supplemental trade tool in connection with transactions involving the
importation or procurement of foreign capital equipment, machinery,
products, goods, and services entailing the payment of at least United
States Dollars: One Million (US$1,000,000.00) or its equivalent in
other foreign currency, and to negotiate and conclude, on a
best-efforts basis, agreements or arrangements on countertrade with
respect to such importation.
Sec. 2. Definition of Terms. — For purposes of the
Executive Order, “Countertrade shall refer to any of the following
arrangements:
(a)
Counterpurchase — also known as counter exports, parallel transactions
or reciprocal trade, whereby the foreign supplier, reciprocally commits
to purchase Philippine goods or services, to be exported to the
supplier’s country or a third country:
(b) Product
Buy Back — whereby the foreign supplier of the equipment or machinery
is paid for with the resultant product (s) or good (s) made or
manufactured by such equipment or machinery;
(c) Offset —
whereby the foreign supplier commits to introduce investments or
technology transfer in the Philippines, or assist in establishing new
industries or improving existing industries to generate or save foreign
exchange or create increased employment, which may or may not be
related to the machinery, equipment, products or goods so imported or
services procured;
(d)
Trade-for-Debt Swap — whereby a loan or credit accommodation obtained
by a government agency or government-owned or controlled corporation
from a foreign government or creditor which has remained outstanding
and unpaid is arranged to be settled in full or partially by way of
sales of products, goods or services to be provided by a third party
rather than by payment in foreign currency; or
(e) Any form
of combination or variation of the above arrangements that results in
the inflow to the country of foreign exchange, or savings thereof,
investments, training and technology transfer, grants for educational,
scientific, technological, environmental and related research programs
or projects, which will enhance Philippine industrial or export
competitiveness or contribute to the creation of new competitive
industries, enhance existing industries or utilization of Philippine
services or expertise by foreign clients, or result in the reduction of
public debt.
Sec. 3. Implementing Agency. — The Department of
Trade and Industry, through the Philippine International Trading
Corporation, is hereby directed to coordinate with all government
agencies and government-owned or controlled corporations in formulating
and implementing particular strategies on countertrade or similar
arrangements for any planned importation or procurement of foreign
capital goods, equipment, machinery, products, goods and services, with
appropriate consultations to be made with the private sector.
Sec. 4. Coordination by Government Agencies. — The
government agency or government-owned or controlled corporation
concerned shall closely coordinate with, and provide information on any
planned importation or procurement as well as countertrade efforts
already undertaken to the Department of Trade and Industry and the
Philippine International Trading Corporation prior to actual
importation or procurement in order to assure the efficient
implementation of this Executive Order.
Sec. 5. Supply Base and Trading Network. — To
achieve maximum implementation and dispersion of the benefits of
countertrade arrangements which may be concluded by government agencies
or government-owned or controlled corporations, the Philippine
International Trading Corporation shall maintain and enhance its supply
base and trading network through constant and close coordination with
various industry and export sectors to ensure the availability of
adequate and acceptable products, goods and services which may be
required under such countertrade arrangements.
Sec. 6. Implementing Rules and Regulations. — The
Department of Trade and Industry, National Economic Development
Authority, Department of Finance, and the Philippine International
Trading Corporation shall jointly promulgate the appropriate
guidelines, rules and regulations to implement this Executive Order.
Sec. 7. Repealing Clause. — The provisions of
executive or administrative orders, rules, regulations and parts
thereof inconsistent with this Executive Order are hereby repealed,
amended or modified accordingly.
Sec. 8. Effectivity. — This Executive Order shall
take effect immediately.
DONE in the City of Manila,
this 19th day of August, in the year of Our Lord, nineteen Hundred and
Ninety-Three.
chanrobles virtual law library
Back to Main
chan
robles virtual law library
Since 19.07.98.