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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 768
PRESIDENTIAL DECREE NO. 768 -
AMENDING PRESIDENTIAL DECREE NO. 198 ENTITLED "DECLARING A NATIONAL
POLICY FAVORING LOCAL OPERATION AND CONTROL OF WATER SYSTEMS;
AUTHORIZING THE FORMATION OF LOCAL WATER DISTRICTS AND PROVIDING FOR
THE GOVERNMENT THE ADMINISTRATION OF SUCH DISTRICT; CHARTERING A
NATIONAL ADMINISTRATION TO FACILITATE IMPROVEMENT OF LOCAL WATER
FACILITIES; GRANTING SAID ADMINISTRATION SUCH POWERS AS ARE NECESSARY
TO OPTIMIZE PUBLIC SERVICE FROM WATER UTILITY OPERATIONS, AND FOR OTHER
PURPOSES
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chanroblesvirtualawlibrary
WHEREAS, it
is the primary concern of the government to develop an orderly and
effective system of local water utilities, particularly in the area of
water supply and sewerage services; chanroblesvirtualawlibrary
WHEREAS, under Presidential Decree No. 198, the Government declared as
a national policy the local operation and control of water systems;
authorized the formation of local water districts; provided for the
administration of such districts, and chartered a national
administration to facilitate improvement of local water utilities;chanroblesvirtualawlibrary
WHEREAS, there is need to amend certain provisions of Presidential
Decree No. 198 in order to hasten and make more effective the
implementation and administration of the program of total development
and expansion of domestic water systems;chanroblesvirtualawlibrary
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 the amendment of Presidential Decree No. 198, as
follows:cralaw:red
Section 1. Section 3, paragraph (b) of Presidential
Decree No. 198 is hereby amended to read as follows:cralaw:red
"(b) Appointing Authority. — The person empowered to
appoint the members of the board of Directors of a local water district
depending upon the geographic coverage and population make-up of the
particular district. In the event that more than seventy-five percent
of the total active water service connections of a local water
districts are within the boundary of any city or municipality, the
appointing authority shall be the mayor of the city or municipality, as
the case may be; otherwise, the appointing authority shall be the
governor of the province within which the district is located:
Provided, That if the existing waterworks system in the city or
municipality established as a water district under this Decree is
operated and managed by the province, initial appointment shall be
extended by the governor of the province. Subsequent appointments shall
be as specified herein.
"If portions of more than one province are included within the boundary
of the district, and the appointing authority is to be the governor,
then the power to appoint shall rotate between the governors involved
with the initial appointments made by the governor in whose province
the greatest number of service connections exists."
Section 2. Paragraphs (b), (c), (e) and last
paragraph of Section 6 of the same decree, are hereby amended to read
as follows:cralaw:red
xxx
xxx
xxx
"(b) A description of the boundary of the district.
In the case of a city or municipality, such boundary may include all
lands within the city or municipality. A district may include one or
more municipalities, cities or provinces, or portions thereof:
Provided, That such municipalities, cities or provinces, or portions
thereof, cover a contiguous area. chanroblesvirtualawlibrary
"(c) A statement transferring any and all waterworks
and/or sewerage facilities managed, operated by or under the control of
such city, municipality or province to such district pursuant to a
contract authorized by this Title.
xxx
xxx
xxx
"(e) The names of the initial directors of the
district with the date of expiration of the term of office for each
which shall be on the 31st of December of first, second, or third
even-numbered year after assuming office, as set forth in Section 11
hereof.
xxx
xxx
xxx
"If two or more cities, municipalities or provinces, or any combination
thereof, desire to form a single district, a similar resolution shall
be adopted in each city, municipality and province; or the city,
municipality or province in which 75% of the total active service
connections are situated shall pass an initial resolution to be
concurred in by the other cities, municipalities or provinces."
Section 3. Section 7 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 7. Filing of Resolution. — A certified copy of
the resolution or resolutions forming a district shall be forwarded to
the office of the Secretary of Administration. If found by the
Administration to conform to the requirements of Section 6 and the
policy objectives in Section 22, the resolution shall be duly filed.
The district shall be deemed duly formed and existing upon the date of
such filing. A certified copy of said resolution showing the filing
stamp of the Administration shall be maintained in the office of the
district. Upon such filing, the local government or governments
concerned shall lose ownership, supervision and control or any right
whatsoever over the district except as provided herein." chanroblesvirtualawlibrary
Section 4. Section 8 of the same decree is
hereby amended to read as follows:cralaw:red
"Sec. 8. Number and Qualifications. — The Board of
Directors of a district shall be composed of five citizens of the
Philippines who are of voting age and residents within the district.
One member shall be a representative of civic-oriented service clubs,
one member a representative of professional associations, one member a
representative of business, commercial, or financial organizations, one
member a representative of educational institutions and one member a
representative of women's organizations. No public official shall serve
as director."
Section 5. Section 11 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 11. Term of Office. — Of the five initial
directors of each newly-formed district, two shall be appointed for a
maximum term of two years, two for a maximum term of four years, and
one for a maximum term of six years. Terms of office of all directors
in a given district shall be such that the term of at least one
director, but not more than two, shall expire on December 31 of each
even-numbered year. Regular terms of office after the initial terms
shall be for six years commencing on January 1 of odd-numbered years.
Directors may be removed for cause only, subject to review and approval
of the Administration."
Section 6. Section 12 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 12. Vacancies. — In the event of a vacancy in
the board of directors occurring more than six months before expiration
of any director's term, the remaining directors shall within 30 days,
serve notice to or request the secretary of the district for
nominations and within 30 days thereafter a list of nominees shall be
submitted to the appointing authority for his appointment of a
replacement director from the list of nominees. In the absence of such
nominations, the appointing authority shall make such appointment. If
within 30 days after submission to him of a list of nominees the
appointing authority fails to make an appointment, the vacancy shall be
filled from such list by a majority vote of the remaining members of
the Board of Directors constituting a quorum. Vacancies occurring
within the last six months of an unexpired term shall also be filled by
the Board in the above manner. The director thus appointed shall serve
the unexpired term only."
Section 7. Section 13 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 13. Compensation. — Each director shall receive
a per diem, to be determined by the board, for each meeting of the
board actually attended by him, but no director shall receive per diems
in any given month in excess of the equivalent of the total per diems
of four meetings in any given month. No director shall receive other
compensation for services to the district."
"Any per diem in excess of P50 shall be subject to approval of the
Administration."
Section 8. Section 20 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 20. System of Business Administration. — The
Board shall, as soon as practicable, prescribe and define by resolution
a system of business administration and accounting for the district,
which shall be patterned upon and conform to the standards established
by the Administration. Auditing shall be performed by a certified
public accountant not in the government service. The Administration
may, however, conduct annual audits of the fiscal operations of the
district to be performed by an auditor retained by the Administration.
Expenses incurred in connection therewith shall be borne equally by the
water district concerned and the Administration."
Section 9. Section 23 of the same decree is hereby
further amended to read as follows:cralaw:red
"Sec. 23. The General Manager. — At the first meeting
of the board, or as soon thereafter as practicable, the board shall
appoint, by a majority vote, a general manager and shall define his
duties and fix his compensation. Said officer shall serve at the
pleasure of the board."
Section 10. Section 24 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 24. Duties. — The duties of the General Manager
and other officers shall be determined and specified from time to time
by the board. The general manager, who shall not be a director, shall
have full supervision and control of the maintenance and operation of
water district facilities, with power and authority to appoint all
personnel of the district: Provided, That the appointment of personnel
in the supervisory level shall be subject to approval by the board."
Section 11. Paragraph (b) of Section 31 of the same
decree is hereby amended to read as follows:cralaw:red
"(b) In-Lieu Share. — As an incident to the
acquisition of the existing water system of a city, municipality, or
province, a district may enter into a contract to pay in-lieu share for
such utility plant, an annual amount not exceeding three percent (3%)
of the district's gross receipts from water sales in any year:
Provided, however, That no contract of this nature shall be executed
during the first five years of the existence of the district; and
Provided, further, That the Board of Directors shall determine that
such contract will not adversely affect or impair the fiscal position
and operations of the district as verified by the
Administration." chanroblesvirtualawlibrary
Section 12. Section 32 of the same decree is hereby
amended by adding four new subsections therein, which shall read as
follows:cralaw:red
"Sec. 32. Protection of Waters and Facilities of
District. — A district shall have the right to:cralaw:red
"(a) Commence, maintain, intervene in, defend and
compromise actions or proceedings to prevent interference with or
deterioration of water quality or the natural flow of any surface,
steam or ground water supply which may be used or useful for any
purpose of the district or be a common benefit to the lands or its
inhabitants. The ground water within a district is necessary to the
performance of the district's powers and such district is hereby
authorized to adopt rules and regulations subject to the approval of
the National Water Resources Council governing the drilling,
maintenance and operation of wells within its boundaries for purposes
other than a singled family domestic use on overlying land. Any well
operated on violation of such regulations shall be deemed in
interference with the waters of the district.
"(b) Require a developer or builder of any structure
within the service areas of the district to extend or connect its
pipeline facilities to the district facilities whenever such
development or structure is within one hundred meters of existing
district facilities or whenever the district is willing to extend its
facilities within one hundred meters of said development or structure.
For the purpose of this section, development shall include the
subdivision of land for any purpose other than agricultural purpose,
and structure shall mean any building or facility to be used for
residential, commercial or industrial purposes.
"(c) Prohibit any person, firm or corporation from
vending, selling, or otherwise disposing of water for public purposes
within the service area of the district where district facilities are
available to provide such service, or fix terms and conditions by
permit for such sale or disposition of water.
"(d) Safeguard and protect the use of its waters.
For this purpose, any person who installs any water connection without
the previous authority from the water district established under this
Decree; tampers water meters or uses jumpers or other devices whereby
water is stolen; steals or pilfers water or water meters; knowingly
possesses stolen or pilfered water or water meters shall, upon
conviction, be punished by prision correccional in its minimum period
or a fine ranging from two thousand pesos to six thousand pesos, or
both. If the violation is committed with the connivance or permission
of an employee or officer of the water district, an employee or officer
shall, upon conviction, be punished by a penalty one degree lower than
prision correccional in its minimum period and forthwith be dismissed
and perpetually disqualified from employment in any utility or service
company owned or controlled by the government."
Section 13. Section 34 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 34. Receipt, Deposit and Payment of District
Funds. — The treasurer shall receive, to the credit of the district and
in trust for its use and benefit, all monies belonging to the district.
All monies belonging to the District shall, where practicable, be
deposited by the treasurer in the Philippine National Bank." chanroblesvirtualawlibrary
Section 14. Section 35 of the same decree is hereby
repealed.
Section 15. Section 36 of the same decree is hereby
amended to be known as Section 35 to read as follows:cralaw:red
"Sec. 35. Bonds or Other Evidence of Indebtedness. —
A district may borrow money to raise funds to pay all cost of any
public improvements authorized by this Title and may issue negotiable
and non-negotiable bonds, promissory notes or other evidence of
indebtedness to support such borrowings. These obligations may be
secured by a mortgage, pledge, deed of trust or of any other
encumbrance upon any of its then owned or after-acquired real or
personal property, assets or revenues and the same shall constitute a
lien as to the principal and interest thereon, on all such property,
assets or revenues. The interests on such bonds or notes are exempt
from all taxes, duties, fees, imposts, or other charges of the national
or local governments."
Section 16. Two new sections are hereby inserted to
be known as Section 36 and Section 37, respectively, which shall read
as follows:cralaw:red
"Sec. 36. Authority for Subsequent Borrowings. —
Where a water district has borrowed money from the Administration, the
district shall not borrow money or incur further obligations from other
sources without the prior written consent of the Administration.
"Sec. 37. Default. — In the event of the default by
the district in the payment of principal or interest on its outstanding
bonds or other obligations, any bondholder or creditor shall have the
right to bring an action before the appropriate court to compel the
payment of such obligation. If the bondholder or creditor concerned is
the Administration, it may, without the necessity of judicial process,
take over and operate the entire facilities, systems or properties of
the district. For this purpose, the Administration may designate its
employees or any person or organization to assume all powers of
policy-decision and the powers of management and administration,
including but not limited to the establishment of water rates and
charges, the dismissal and hiring of personnel, the purchase of
supplies, equipment and materials and such other actions as may be
necessary to operate the utility efficiently." chanroblesvirtualawlibrary
Section 17. Section 37 of the same decree is hereby
amended to read as Section 38 as follows:cralaw:red
"Sec. 38. Rates and Charges — Water. — A district may
sell water under its control under schedules of rates and charges as
may be determined by the Board, to any and all water users within the
district. Said schedule may provide for differential rates for
different categories of use and different quantity blocks. The
district, as far as practicable, shall fix such rates and charges for
water as will result in revenues which will:cralaw:red
"(a) Provide for reimbursement from all new water
customers for the cost of installation of new services and meters;chanroblesvirtualawlibrary
"(b) Provide for revenue from all water deliveries
and services performed by the district;chanroblesvirtualawlibrary
"(c) Pay the operating expenses of the
district; chanroblesvirtualawlibrary
"(d) Provide for the maintenance and repairs of the
works;chanroblesvirtualawlibrary
"(e) Provide a reasonable surplus for replacement,
extension and improvements; and
"(f) Pay the interest and principal and provide a
sinking fund for the payment of debts of the district as they become
due and establish a fund for reasonable reserves."
Section 18. Sections 38, 39, 40, 41, 42 and 43 of the
same decree are hereby amended to read as Section 39, 40, 41, 42, 43
and 44, respectively.
Section 19. Section 44 of the same decree is hereby
amended to read as Section 45 as follows:cralaw:red
"Sec. 45. Dissolution. — A district may be dissolved
by resolution of its board of directors filed in the manner of filing
the resolution forming the district: Provided, however, That prior to
the adoption of any such resolution: (1) another public entity has
acquired the assets of the district and has assumed all obligations and
liabilities attached thereto; (2) all bondholders and other creditors
have been notified and they consent to said transfer and dissolution;
and (3) a court of competent jurisdiction has found that said transfer
and dissolution are in the best interest of the public."
Section 20. Section 45, 46 and 47 of the same decree
are hereby amended to read as Sections 46, 47 and 48, respectively.
Section 21. Section 48 of the same decree is hereby
amended to read as Section 49 as follows: chanroblesvirtualawlibrary
"Sec. 49. Charter. — There is hereby chartered,
created and formed a government corporation to be known as the "Local
Water Utilities Administration" which is hereby attached to the Office
of the President. The provisions of this Title shall be and constitute
the charter of the Administration."
Section 22. Section 49 of the same decree is hereby
amended to read as Section 50 as follows:cralaw:red
"Sec. 50. Purposes. — The Administration shall
primarily be a specialized lending institution for the promotion,
development and financing of local water utilities. In the
implementation of its functions, the Administration shall, among
others: (1) prescribe minimum standards and regulations in order to
assure acceptable standards of construction materials and supplies,
maintenance, operation, personnel training, accounting and fiscal
practices for local water utilities; (2) furnish technical assistance
and personnel training programs for local water utilities; (3) monitor
and evaluate local water standards; and (4) effect systems integration,
joint investment and operations, district annexation and deannexation
whenever economically warranted."
Section 23. Section 50 of the same decree is hereby
amended to read as Section 51 as follows:cralaw:red
"Sec. 51. Composition. — The Board of Trustees of the
Administration shall be composed of a chairman and four other members,
all of whom shall be citizens of the Philippines."
"One trustee at any time shall have at least ten years experience in
banking, finance or business. One trustee at any time shall possess
sufficient background in the field of economics; one trustee at any
time shall have experience in management or systems operations. Two
trustees at any time shall be civil or sanitary engineers with
experience related to water supply or waste-water operations. Not more
than one trustee may represent a private investor-owned utility. No
elected official shall be entitled to act as a trustee. At least three
of the trustees must be employees of the National
Government." chanroblesvirtualawlibrary
"The General Manager shall be the ex-officio member of the Board."
Section 24. Section 51 of the same decree is hereby
amended to read as Section 52 as follows:cralaw:red
"Sec. 52. Appointment and Term of Office. — The
trustees, with exception to the ex-officio member, shall be appointed
by the President of the Philippines. They shall serve a term of five
years each: Provided, That of the first four initially appointed, one
shall serve a term of five years, another for four years, the third for
three years, and the fourth for two years. Trustees may be removed for
cause only."
"The incumbent trustees holding office as such upon the effectivity of
this amendment shall continue to hold such office until the expiration
of their original terms as defined in their appointments."
Section 25. Section 52 and 53 of the same decree are
hereby amended to read as Section 53 and 54, respectively.
Section 26. Section 54 of the same decree is hereby
amended to read as Section 55 as follows: chanroblesvirtualawlibrary
"Sec. 55. Compensation. — The Trustees shall each
receive a per diem as may be fixed by the Board for each meeting
actually attended by them: Provided, That the total of such per diem in
any one month for each Trustee, shall not exceed the equivalent of the
per diems for four meetings; Provided, further, That per diems is
excess of three hundred pesos per meeting shall be subject to approval
by the Office of the President; and Provided, finally, That, in
addition, each Trustee shall be reimbursed his expenses incurred in
connection with the performance of his functions in such amount as may
be determined by the Board of Trustees."
Section 27. Section 55 and 56 of the same decree are
hereby amended to read as Section 56 as follows:cralaw:red
"Sec. 56. By-laws. — The Board of Trustees shall
adopt a code of by-laws for the conduct of the affairs of the
Administration which may be amended from time to time by the
affirmative vote of four Trustees."
"Except as otherwise provided herein, the organizational structure and
staffing pattern of the Administration, the qualification of the
appointive officers and employees, the powers and responsibilities of
the officers, the internal procedure of the Administration, and such
other matters relative to the organization, management and conduct of
the affairs of the Administration shall be as provided in the by-laws;
Provided, That, the appointment of and disciplinary action against
officers and employees of the Administration shall be done and effected
pursuant to guidelines established by the Board of Trustees."
Section 28. Section 57 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 57. Officers. — The Board shall elect a
chairman from among its members. In addition, the Board shall select a
secretary and a corporate legal counsel, each of whom shall not be a
trustee."
Section 29. The first paragraph of Section 58 of the
same decree is hereby amended to read as follows:cralaw:red
"Sec. 58. The General Manager and Other Employees. —
The Trustees shall select a general manager who shall not come from the
appointed trustees. The general manager shall receive compensation in
an amount as may be fixed by the Board, subject to the approval of the
President of the Philippines, but in no case less than fifty-four
thousand pesos per annum. The general manager shall employ and appoint
all additional personnel; Provided, That the appointment of the
personnel in the supervisory level shall be subject to confirmation by
the Board." chanroblesvirtualawlibrary
"The incumbent manger holding office as such upon the effectivity of
this amendment shall continue to hold such office unless sooner
terminated by competent authority."
Section 30. Section 60 of the same decree is hereby
amended to read as follows:cralaw:red
"Sec. 60. Borrowing and Security Therefor. — The
Administration may borrow funds as authorized in Section 72 of this
Title, and issue as security therefor debentures or other evidence of
indebtedness constituting a lien on any and all securities, covenants
and obligations of local water utilities held by the Administration as
security for loans made to such local water facilities."
Section 31. Paragraphs (b), (c) and (d) of Section
61 of the same decree are hereby amended to read, and a new paragraph
is hereby inserted which shall read, as follows:cralaw:red
"Sec. 61. Loans. —.
"(a) .
"(b) Feasibility Study. — A feasibility study which
may be required by the Administration for any proposed project for
which loan funds are sought may be undertaken by the water district,
the Administration or by a consultant prequalified by the
Administration.
"(c) Security. — The Administration may take as
security for such loans the authorized bonds or other evidence of debt
by the water district and a mortgage on its properties; chanroblesvirtualawlibrary
"(d) Loan Documents and Procedures. — The Board of
Trustees shall adopt rules, loan documents and procedures to be used in
the granting of loans. Such rules shall include provisions for
security, payment and default.
"(e) Default. — In the event of default by the local
water district in the payment of principal or interest on its
outstanding bonds or other obligations to the Administration, the
latter may, without the necessity of judicial process, take over and
operate the facilities or properties of the district. For this purpose,
the Administration may designate its employees or any person or
organization to assume both the policy-making authority and the powers
of management, including but not limited to, the establishment of water
rates and service charges, the dismissal and hiring of personnel, the
purchase of equipment, supplies or materials and such other actions as
may be necessary to operate the water district efficiently. Such
policy-making and management prerogatives may be returned to the Board
of Directors and the general manager of the water district,
respectively, when all of its overdue accounts have been paid, all its
reserve requirements have been satisfied and all the causes of default
have been met." chanroblesvirtualawlibrary
Section 32. Paragraph (e) of Section 62 of the same
decree is hereby amended to read as follows:cralaw:red
"Sec. 62. Regulations. —.
"(e) Personnel. — The training of the personnel who
operate or manage local water utilities. For this purpose, at least a
majority of the personnel of a local water district must have
satisfactorily completed appropriate training courses, programs or
seminars conducted by the Administration, and must be holders of a
certificate of completion or competence, as the case may be, before a
certificate of conformance is issued to the water district.
"For certain positions which the Administration may specify, only those
persons possessing, or in the case of subsequent appointments, only
persons who will undergo training and shall have obtained within six
months, a certificate of completion or competence, as the case may be,
shall be appointed." chanroblesvirtualawlibrary
Section 33. Paragraph (f) of Section 83 of the same
decree is hereby amended to read as follows:cralaw:red
"Sec. 63. Rate Review. —.
"(f) Payment of the interest and principal and
provide a sinking fund for payment of debts of the district as they
become due and establish a fund for reasonable reserves. chanroblesvirtualawlibrary
"The rates of charges established by such local water district shall be
subject to review by the Administration to establish compliance with
the above-stated provisions. Said review of rates or any charges
therein shall be by the Board of Trustees, and in writing."
Section 34. Sections 67, 68 and 69 of the same
decree are hereby repealed, and five new sections are hereby
substituted therefor to be known as Section 67, 68, 69, 70 and 71,
which shall be read as follows:cralaw:red
"Sec. 67. Capital Stock. — The authorized capital of
the Local Waters Utilities Administration is Five Hundred Million Pesos
divided into Five Million shares of stock with a par value of One
Hundred Pesos per share which shall be subscribed by the National
Government and opened to subscription by private investors or
government financial institutions. chanroblesvirtualawlibrary
"Sec. 68. Payment for National Government Shares. —
All amounts previously released by the National Government to the
Revolving Fund of the Administration shall be credited as payment for
subscriptions to shares of stock at par value. Thereafter, the National
Government shall for each year beginning with fiscal year 1975-76
subscribe and pay for the necessary capitalization as programmed during
the year; Provided, That the amount programmed for each year shall not
be less than Fifty Million Pesos. chanroblesvirtualawlibrary
"Sec. 69. Operational Expenses. — The Board of
Trustees is hereby authorized to appropriate out of any funds of the
Administration, such amounts as it may deem necessary for the
operational and other expenses of the Administration including the
purchase of necessary equipment.
"Sec. 70. Charges. — To the extent that the
Administration performs services for the benefit and at the request of
a local water district or utility of a number of water districts,
utilities or organizations, it may levy fees or charges for such
service rendered.
"Charges may include an assessment against water districts or utilities
to finance those functions of the Administration which are of general
benefit to water districts or utilities including, but not limited to,
general administration and supervision.
"Sec. 71. Receipt and Investment of Funds. — Whenever
the Administration receives money whether as payment for subscriptions
to shares of stock, principal repayments, interest income, payment for
services rendered or for any purpose whatsoever, it shall issue its own
receipts and provide for their safekeeping and investment under policy
guidelines as may be established by the Board of Trustees in accordance
with the Department of Finance regulations."
Section 35. Section 70 of the same decree is hereby
repealed.
Section 36. Section 71 of the same decree is hereby
amended to read as Sections 72 and 73 as follows:cralaw:red
"Sec. 72. Domestic Borrowing Authority. — The
Administration shall have the authority to borrow money from all
domestic loan sources whether government or private; Provided, That its
loans outstanding from domestic sources at any one time shall not
exceed One Billion Pesos.
"Sec. 73. Authority to Contract Foreign Loan. — The
Administration is hereby authorized to contract loans, credits, in any
convertible foreign currency or capital goods, and to incur
indebtedness from time to time with foreign governments, or any
international financial institutions or fund sources, including
suppliers credits or deferred payment arrangements, the total
outstanding amount of which, excluding interests, shall not exceed five
hundred million United States dollars or the equivalent thereof in
other currencies, on terms and conditions promulgated by the Secretary
of Finance and the Monetary Board for the accomplishment of its
objectives; and to enter into and execute contracts and other documents
specifying such terms and conditions.
"The President of the Philippines, by himself or through his duly
authorized representative, is hereby authorized to negotiate and
contract with foreign governments or any international financial
institution or fund sources in the name and on behalf of the
Administration, one or several, loans, for the purpose implementing the
Administration's program for the promotion and development of local
water utilities through the Administration's financing or lending
operations.
"The President of the Philippines, by himself or through his duly
authorized representative, is hereby further authorized to guarantee,
absolutely and unconditionally, as primary obligor and not as mere
surety, in the name and behalf of the Republic of the Philippines, the
payments of the loans, credits and indebtedness up to the amounts which
the President of the Philippines pursuant to loan agreements entered
into with foreign governments or any international financial
institution or fund sources.
"The loans, credits and indebtedness contracted under this section
shall be in accord with the provisions of the Foreign Borrowing Act as
amended."
Section 37. Section 72 of the same decree is hereby
amended to read as Section 74 as follows:cralaw:red
"Sec. 74. Depository for Reserves. — Any local water
utility which is accumulating reserves for capital improvement may make
specified time deposits of the same to the Administration in the manner
authorized for banks in handling trust funds. Such funds shall not be
used for operating purposes by the Administration."
Section 38. Two new sections are hereby inserted to
be known as Section 75 and Section 76 which shall read as follows:cralaw:red
"Sec. 75. Control and Supervision over All Releases
of Appropriations for Waterworks and Sewerage Systems. — Since the
Administration is charged with the development of local water
utilities, funds from prior and future appropriations of the National
Government for waterworks and sewerage systems in cities,
municipalities and provinces that are covered by duly formed water
districts shall be released directly to the Administration for the
account of the water district concerned. The Administration may,
however, draw from such account fees and charges for services rendered
to the water district concerned as specified in Section 70 of this
Title.
"Sec. 76. Exemption from all Taxes, Duties, Fees,
Imposts and Other Charges by the Government. — To enable the
Administration to pay its indebtedness and obligations, and in
furtherance and effective implementation of the policies and objectives
of this Decree, the Administration is hereby declared to exempt:cralaw:red
"(a) From the payment of all taxes, fees, imposts,
charges, costs and restrictions by the Government of the Republic of
the Philippines, its provinces, cities, municipalities, and other
government agencies and instrumentalities, and filing and service fees
and other charges of courts in any court of administrative proceedings
in which it may be a party;chanroblesvirtualawlibrary
"(b) From all income taxes, franchise taxes and
realty taxes to be paid to the National Government, its provinces,
cities, municipalities and other government agencies and
instrumentalities; and
"(c) From all import duties, compensating taxes,
wharfage fees on import or foreign goods and equipment required for its
operations and projects."
Section 39. Sections 73 and 74 of the same decree are
hereby amended to read as Section 77 and 78, respectively.
Section 40. This Decree shall take effect
immediately.
Done in the City of Manila,
this 15th day of August, in the year of Our Lord, nineteen hundred and
seventy-five.
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