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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 1330 |
Governor Jaime C. Laya
WHEREAS, the Philippine Sugar Commission (PHILSUCOM), as regulatory body of the sugar industry pursuant to P.D. 388, as amended by P.D. 1192 organized the National Sugar Trading Corporation (NASUTRA) to be the sole sugar buying and selling agency;
WHEREAS, the Republic Planters Bank (RPBanks), owned and controlled by PHILSUCOM, was also mandated to be the financial arm of the sugar industry and the said entities jointly pursued, among other activities related to the sugar industry, the government's thrust of sugar production and procurement in order to assure adequate domestic supply of sugar, and meet our international commitments as contemplated under the international sugar agreement and long-term contract with various foreign sugar buyers;
WHEREAS, the sugar industry is decidedly coupled with public interest, and the delay or non-implementation of its sugar production and procurement program would be disastrous to the national interest since it will affect our foreign exchange earnings and will cause social unrest among the population in the affected areas;
WHEREAS, in pursuit of the government program, Republic Planters Bank incurred overdrafts in its clearing account with the Central Bank in view of the Latter's inability to effect substantial regular loan releases thru its rediscounting window due to certain constraints on domestic ceilings resulting in the deposit reserve deficiencies and corresponding imposition of penalties for reserve deficiencies;
WHEREAS, considering the magnitude of the amount of the reserve penalties which may affect its viability and in order to rationalize the situation, it is imperative that Republic Planters Bank be given appropriate relief from its present predicament brought about primarily by the implementation of the government's sugar production and procurement program and not by reason of any mismanagement or unsound banking practice on the operation of the bank;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, hereby direct that:
Republic Planters Bank shall be appropriately assisted by the Central Bank by way of full condonation of all penalties and other sanctions of whatever kind, nature and description, as of the date they became due, on its legal reserve deficiencies;
Whatever overdrafts incurred in the sugar production and procurement program of the government shall forthwith be considered and treated as loans and advances availed or released under the regular rediscounting window as of the date it was incurred at a rediscounting interest rate (8%) imposed by the Central Bank on transactions of this nature;
Central Bank shall take immediate appropriate measures to provide the sugar industry thru RPBank adequate and timely funding in furtherance of the sugar production and to meet the government's commitment under the international sugar agreement and existing long-term contracts with different foreign buyers.
Done in the City of Manila, this 6th day of June, in the year of Our Lord, Nineteen hundred and eighty three.
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