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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 1329 -
DIRECTING THE DESIGN AND IMPLEMENTATION OF MEASURES TO SEE TO A
COMPREHENSIVE GOVERNMENT EFFORT TO ATTAIN BALANCE OF PAYMENTS TARGETS |
The heads of Ministries and Government Owned or
Controlled Corporations
All Others Concerned
WHEREAS, the Philippine is engaged in a program of structural adjustment in order to ensure that the workings of the economy are fully appropriate to the more volatile and competitive international environment and to the realities of the world energy situation;
WHEREAS, the principal features of the adjustment program, among others, are to increase to efficiency and the export competitiveness of the Philippine industry, to improve energy self-reliance, to increase the efficiency of savings mobilization and investment project selection;
WHEREAS, various policy measures have already been adopted for the purpose, including the acceleration of the energy program, gradual relaxation of the few remaining foreign exchange controls on imports, simplification and reduction of tariff levels, lifting of interest rate ceilings, and greater flexibility in the foreign exchange rate to prevent the overvaluation of the peso;
WHEREAS, the Philippines had a high Balance of Payments deficit in 1982 and it is necessary to reduce it in 1983;
WHEREAS, it is necessary to carefully screen new foreign borrowings in view of the existing level of the country's international debt which is already more than $17 billion and in view of the debt service ratio which is close to the statutory limit of 20 percent;
WHEREAS, the measures adopted are acknowledged to mean a temporary slowdown in growth while the economy adjusts, preparatory to higher growth when the process is complete and as the world economy recovers;
WHEREAS, it is necessary for all agencies of government to adopt all possible measures to see to it that foreign exchange receipts are maximized and foreign exchange outflows are minimized and to keep international debt to a minimum, thus ensuring the attainment of structural adjustment program objectives and the preservation of the country's international credit standing;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, pursuant to the powers vested in me by Law, do hereby Order and Instruct the design and implementation of the following measures:
A.
Compliance
1.
The Prime Minister and the Executive Committee shall oversee the design
and implementation of the measures necessary to comply with this
Letter. In its work, the guidelines and the specific instructions
herein addressed to the various Ministries/Offices/Agencies shall be
specifically monitoring and amplified as necessary.
2. The
Committee shall identify other possible measures that will achieve the
same result and report same to the President with its recommendations.
3. Agencies of
Government, particularly those referred to herein, shall assist the
Executive Committee in its work.
1.
All projects of the national government, local government units,
government owned or controlled corporations including their
subsidiaries, and state universities and colleges (collectively
referred to herein as "government"), shall be reassessed with the
intention of:
a.
Limiting projects with significant imported components only to the most
urgent and essential and postponing to future years all other projects;
b. Financing
the import requirements of government only from official development
assistance sources or export credits; and
c. Postponing
the acquisition of equipment or other projects inputs which are
imported or which have significant imported components, whether these
are directly imported or procured locally from indentors of
manufacturers representatives;
2.
Government agencies shall limit demand for foreign financing of their
activities. The Central Bank shall strictly observe the existing
ceiling on new external debt and no government agency shall go to the
international capital markets for major new borrowings until further
notice;
3. Government
funds shall not be disbursed for any non-vital activities, whether
undertaken by government itself or by private or quasi-public groups
which would involve the purchase and disbursement of foreign exchange,
whether directly or indirectly. These shall include such activities as
cultural, sports, goodwill or other similar missions. Funds for these
shall be raised by sponsors preferably from foreign sources. The
Central Bank shall discourage private and public enterprises or
individuals from making contributions that will involve the
disbursement of foreign exchange;
4. The Central
Bank shall see to it that financial institutions, both government and
private, make no exceptions, even for government agencies, from
existing foreign exchange, including those for the importation of the
banned items, capital outflows, or gifts or donations.
C. Specific Measures
Office
of the President
1.
The Presidential Executive Assistant shall strictly control and limit
the overseas travels of government personnel, including travel of
non-government employees that are supported with government funds;
2. The Board
of Energy and the Ministry of Energy shall monitor and evaluate the
peso cost of energy imports, with particular emphasis on the status of
the Oil Stabilization Fund and the impact of the changing peso-dollar
rate;
3. The Office
of Budget and Management shall conduct a review of all overseas offices
of government agencies, including government owned or controlled
corporations and their subsidiaries. The review shall cover the
staffing patterns and expenditures of foreign missions, attache
offices, or subsidiaries as the case may be. It shall be done with the
aim of reducing or eliminating the personal component in places that
are unable to produce the necessary results. Trade and tourism related
offices shall be evaluated on the basis of results produced,
specifically exports or tourism receipts, as the case may be;
4. The Office
of Budget and Management shall study existing controls over the use of
government funds appropriated in the General Appropriations Act or the
Public Works and Highways Acts, for the purchase or foreign exchange
for imported commodities or other items, with the intention of
instituting a control mechanism that will see to compliance with this
Letter, LOI No. 1397, and other similar instructions;
Ministry
of Agriculture
5.
The Ministry of Agriculture shall review existing policy and procedure
governing the export of agriculture items, for the purpose of removing
unnecessary requirements and facilitating exports;
Ministry
of Energy
6.
The Ministry of Energy shall review existing oil inventories and supply
contracts, in order to reduce inventories to a minimum level and to
terminate the less critical supply contracts;
Ministry
of Finance
7.
The Bureau of Customs, working with the Central Bank, the Ministry of
National Defense, the Ministry of Foreign Affairs, the local government
units concerned, and all other appropriate agencies of government,
shall strictly enforce existing regulations on the export of logs. All
agencies shall see to it that full shipments and values are reflected
as exports and foreign exchange receipts.
Ministry
of Foreign Affairs
8.
The Ministry of Foreign Affairs shall assist the Office of Budget and
Management on the review of the staffing and expenditures of all
foreign offices of the government, including subsidiaries of government
corporations;
9.
The Ministry of Foreign Affairs shall review the membership of the
Philippine government and its instrumentalities, in international
organizations, for the purpose of limiting such memberships only to the
most beneficial ones, in order to save on dues and other requirements;
Ministry
of Human Settlements
10.
The KKK Secretariat shall establish export and foreign exchange
generation targets for the program;
Ministry
of Labor and Employment
11.
The Ministry of Labor and Employment shall expedite the formation of a
one-stop processing center for overseas workers and shall otherwise
adopt such measures as may be necessary to facilitate the employment of
Filipino workers overseas;
Ministry
of Natural Resources
12.
The Ministry of Natural Resources shall review regulations and
procedures governing the export of fisheries and aquatic resources and
of other products within its jurisdiction, with the aim of facilitating
such exports and maximizing the foreign exchange receipts from this
source;
Ministry
of Tourism
13.
The Ministry of Tourism shall analyze the actual foreign exchange
receipts from the tourism program that is received by the banking
system and shall identify and implement, in coordination with the
appropriate agencies, such measures as may be necessary to increase
same;
14. The
Ministry of Tourism shall study the feasibility of increasing the
travel tax, as a means of discouraging unnecessary foreign travel and
encouraging domestic tourism;
Ministry
of Trade and Industry
15.
The Ministry of Trade and Industry shall lead an aggressive export
drive, in order that domestic producers may be able to take full
advantage of the anticipated world recovery;
Fertilizer
and Pesticide Authority
1.
The Fertilizer and Pesticide Authority shall review domestic fertilizer
requirements, the capability of local industry to service same and
existing inventory levels, for the purpose of limiting inventory to the
minimum level and of reducing the level of current imports;
National
Food Authority
2.
The National Food Authority shall review domestic requirements,
manufacturing capability and inventory levels of food and feed products
and shall see to it that inventory levels and current imports are kept
to the minimum level;
3. The
National Food Authority shall establish export targets and shall set
maximum inventory levels on food items that it procures in order to
maximize exports and minimize the need for foreign or domestic
financing;
Philippine
Coconut Authority and Philippine Sugar Commission.
4.
The Philippine Coconut Authority and the Philippine sugar Commission
shall assist in the identification of such measures as may be necessary
to increase foreign exchange receipts from the exports of coconut and
sugar products as the case may be;
Done in the City of Manila, this 31st day of May, nineteen hundred and eighty-three.
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Since 19.07.98.