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PRESIDENTIAL DECREE NO. 790
PRESIDENTIAL DECREE NO. 790
- FURTHER AMENDING SectionS SIX AND TWELVE OF REPUBLIC ACT NUMBERED
SEVENTEEN HUNDRED AND EIGHTY-NINE, AS AMENDED, OTHERWISE KNOWN AS THE
REPARATIONS LAW
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WHEREAS,
Sections 6 and 12 of Republic Act No. 1789, as amended, require private
and users of reparations goods and services to put up collaterals
sufficient to cover the cost thereof and/or the amount of their
restructured accounts;chanroblesvirtualawlibrary
WHEREAS, said sections of the law further require private end-users to
pay an interest of 12% per annum on the cost of the goods and services
payable in installments and/or the amount of their restructured
accounts; chanroblesvirtualawlibrary
WHEREAS, said private end-users find it difficult to comply with said
requirements considering that they also have to obtain further
financing from other sources for the putting up and operation of their
projects;chanroblesvirtualawlibrary
WHEREAS, a relaxation of said requirements would greatly help said
private end-users in the successful prosecution of their projects, thus
enabling them to contribute to the economic progress of the country;
and
WHEREAS, it is the policy of the Government to assist and promote
private industry to enable them to help in the building up of the
national economy.
NOW, THEREFORE, I, FERDINAND E, MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and order the amendment of Sections 6 and 12 of Republic Act No.
1789, as amended, as follows:cralaw:red
Section 1. The following portion of Paragraph (a-1)
of Section 6 of Republic Act No. 1789, as amended, relative to the
putting of collaterals, is hereby amended to read as
follows: chanroblesvirtualawlibrary
"Sec. 6. (a-1) To issue procurement orders for the
acquisition of reparations goods and/or services on the basis of the
agreed and schedule. The procurement order shall specify, among others,
the following: (1) the name of the applicant end-user; (2) the item in
the agreed schedule; (3) the name of the project; (4) the amount of the
procurement order; and (5) the date of issuance of the procurement
order; The amount of each procurement order shall be strictly in
accordance with the allocation for each project as agreed upon between
the Philippine and Japanese Governments. The procurement orders for all
the projects shall be issued only after the conclusion of the agreed
schedule. No procurement order for the acquisition of goods and/or
services intended for government agencies shall be issued by the
Commission until after it shall have duly ascertained and verified that
the agencies concerned have (1) the capacity and have duly provided for
the payment of the 2% service fee and all incidental charges in
connection with procurement and delivery of the goods and/or services,
and (2) the technical capacity to take delivery and utilize efficiency
the goods applied for, and unless all the following conditions shall
have been previously complied with; (1) the government agency concerned
must have previously prepared and submitted to the satisfaction of the
Commission a financial, economic and technological study concerning the
feasibility of the project together with the complete plans and
specifications thereof; (2) the application must have been previously
approved by resolution of the Commission; (3) the project must be among
those specifically included in the preparations schedule agreed upon
and effective between the Philippine and Japanese Governments at the
time of the issuance of the procurement order; and (4) the agreed
schedule showing the names of the applicant end-users must have been
published in accordance with this Act. No procurement order for the
acquisition of reparations goods and/or services intended for private
parties shall be issued by the Commission until after it shall have
duly ascertained and verified that the applicant concerned (1) has
enough financial resources and capacity to pay; and (2) has the
technical capacity to take delivery and utilize efficiently the goods
applied for, and unless all the following conditions shall have been
previously complied with: (1) the private applicant end-user concerned
must have previously prepared and submitted to the satisfaction of the
Commission a financial, economic and technological study of the project
together with the complete plans and specifications thereof favorably
enforced as prescribed in Section two of this Act, and a certification
from the Securities and Exchange Commission or the Bureau of Commerce,
as the case may be, attesting that the applicant end-user concerned is
qualified under this Act; (2) the application must have been previously
approved by resolution of the Commission; (3) the project must be among
those specifically included in the reparations schedule agreed upon and
effective between the Philippine and Japanese Governments at the time
of issuance of the procurement order: Provided, That no procurement
order shall be issued until after the private applicant end-user
concerned shall have made a cash down payment for the project applied
for which shall be 5% of the value of the project computed at the
current rate of exchange of the peso to the U.S. dollar prevailing at
the time of payment; and (4) the agreed schedule showing the names of
the applicant end-users must have been published in accordance with
this Act. The private applicant shall be required to submit proof to
substantiate that both his financial resources and capacity to pay are
commensurate with the value of the goods and/or services applied for,
and that he has had experience or has contracted an appropriate number
of experts in the particular field. He shall also be required to
obligate himself to put up the performance bond specified in Section
12-A of this Act before the delivery of the goods and/or services:
Provided, further, That in the case corporations, the principal
officers thereof shall be required to sign a guarantee contract whereby
they shall be jointly and severally liable with the corporation to
answer for the obligation so contracted. Notwithstanding the foregoing,
no procurement order shall take effect until after the lapse of one
week after its final publication indicating the name and address of the
applicant end-user, the name of the project subject of the procurement
order and the specific item in the reparation schedule agreed upon and
effective between the Philippine and Japanese Governments at the time
of issuance of the procurement order, three successive times every
other day in two newspapers of general circulation, one in Tagalog and
one in English, in the Philippines, and both in English in Japan, by
the Commission and the Mission, respectively. As required herein, the
Commission shall publish each and every procurement order within one
week after its issuance, and the Mission, within one week after receipt
of the procurement order. Any procurement order which does not wholly
comply with all of the above requirements shall ipso facto be
considered null and void, if such non-compliance has been through the
fault or negligence of the applicant end- user. After the procurement
order for reparations intended for a specific end-user has been
properly issued in accordance with the foregoing, such procurement
order may not be revoked or suspended except when the end-user in whose
favor the procurement order has been issued is adjudged, after due
investigation wherein he has been given the opportunity to be heard and
represented by counsel, to be disqualified or found guilty of fraud in
connection with his application under this Act: Provided, That pending
final decision, the procurement of the goods, except actual delivery
thereof to the end-user concerned, shall not be suspended: Provided,
however, That an end-user who has been found disqualified by the
Commission may appeal to the President within thirty days from the
receipt of the Commission's decision. The decision of the President
which must be made not later than thirty days after the submission of
the appeal to him, shall be final, and shall become effective upon
receipt thereof by the end-user concerned. In case the end-user fails
to appeal the decision of the Commission shall become final immediately
after the lapse of the period for appeal. A party who has been adjudged
disqualified shall forfeit the down payment without prejudice to any
action, criminal or otherwise, which may be taken against him by the
proper government agency. the Commission is hereby required to render a
decision on any complaint submitted to it regarding the qualification
of an end-user within ninety-days from the date of the formal
submission of such complaint in writing."
Section 2. The following portions of the various
paragraphs of Section 12 of the same law, as indicated hereunder, are
hereby further amended to read as follows:cralaw:red
"Sec. 12. Terms of Sale. — Capital goods and
complementary services intended for government projects, irrespective
of the classification of the project, shall be transferred to the
agencies concerned without cost; Provided, That said agencies shall pay
in cash a service fee of two (2) per cent of the cost of the goods
and/or service, and all incidental charges incurred in connection with
the procurement and delivery of such goods and/or services, computed at
the current rate of exchange of the peso to the U.S. dollar prevailing
at the time of payment. The government agencies concerned shall enter
in their books of accounts the peso F.O.B. value of the goods and/or
services received by them computed at the current rate of exchange of
the peso to the U.S. dollar prevailing at the time of delivery, as
follows: chanroblesvirtualawlibrary
(1) National government offices, agencies,
institutions and/or instrumentalities depending solely on
appropriations from the National Assembly for their operating expenses
shall enter the peso F.O.B. value as additional appropriation for them.
(2) National government offices, agencies,
institution and/or instrumentalities with revolving funds provided by
law shall enter the peso F.O.B. value as additional appropriation for
said revolving fund.
(3) National government offices, agencies,
institutions and/or instrumentalities with capital stock provided by
law shall enter the peso F.O.B. values as subscription of the
Government to such capital stock.
(4) Government-owned or controlled corporations shall
enter the peso F.O.B. value as subscription of the Government to their
capital stock.
(5) Provincial, city and municipal governments shall
enter the peso F.O.B. value as contribution of the National government
to their operating expenses.
The foregoing provisions shall also apply to all government projects,
irrespective of the classification of the projects, the reparations
goods and/or services of which have already been procured and delivered
to the government end-users concerned, and the contracts for the
transfer thereof shall be modified accordingly: Provided, That whatever
amount or amounts may have already been paid by said government
end-users for service fee, incidental charges and/or the peso F.O.B.
value of the reparations goods and/or services, including interest
thereon, if and, shall not be refunded. chanroblesvirtualawlibrary
Capital goods and complementary services disposed of to private parties
as provided for in sub-section (a) of Section two hereof shall be sold
on cash or credit basis under rules and regulations as may be
determined by the Commission. All private end-users shall pay the peso
F.O.B. value of reparations goods and/or services received by them plus
a service fee of 2% of the value of such goods and/or services, and all
incidental charges in connection with the procurement and delivery
thereof, all computed at the current rate of exchange of the peso to
the U.S. dollar prevailing at time of delivery under the terms and
conditions provided herein. Sales on credit basis shall be payable on
installments: Provided, That the deposit or down payment required to be
paid under subsection (a-1) of Section 6 hereof shall be applied as
first payment without interest on the F.O.B. value on the date of
delivery of the reparations goods and/or services: Provided, further,
That in case of capital goods for the utilization of which an initial
investment before operation of not more then twenty per cent of the
cost of such goods is required, the first installment with interest
shall be paid on the third month after delivery of the goods, and in
the case of capital goods for the utilization of which an initial
investment before operation of more than twenty per cent of the cost of
such goods is required, and also in the case of ocean-going vessel, the
first installment with interest shall be paid on the twelfth month
after delivery of the goods, extendible when deemed to be justified by
the Commission not exceeding one year. The balance, in both cases,
shall be paid in equal annual installments within a period to be fixed
by the Commission considering the life expectancy of the goods but in
no case exceeding ten years from the date the first payment falls due,
with interest at 3% per annum and an additional interest of 1-1/2% per
month for delinquency in the payment of installments: Provided, That in
the case of vessels, the procurement cost thereof shall be paid within
the period provided for in Republic Act Numbered Fourteen Hundred and
Seven, as amended. Goods other than capital goods procured as
reparations shall be sold for cash only at prevailing prices for
similar goods.
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xxx
"(a-1) The foregoing provisions of this Section,
insofar as it relates to the computation of the peso F.O.B. value of
the reparations goods and/or services, the execution of the sales
contract and corresponding schedule of payments, the time of
application of the deposit or down payment as first payment without
interest and due date of the first installment with interest on the
balance, and imposition of interest of 3% per annum on the balance and
an additional interest of 1 ½ per month for delinquency, shall
also apply to all projects of private end-users in the current 17th
year reparations schedule and to all other projects of private
end-users where the reparations goods and/or services have already been
delivered but the contracts and corresponding schedules of payment have
not as yet been executed at the time of the issuance of this decree, in
which case, said private end-users shall, within a period of three
months from issuance of this decree, execute the sales contracts and
corresponding schedules of payments, otherwise the sanction provided
for under paragraph (a-2) of this Section shall be taken against them.
"(a-2) All private end-users with pending accounts
with the Commission at the time of the issuance of this Decree shall be
allowed to restructure their accounts beyond the maximum allowable
period of amortization as provided for under this Act: Provided That
said end-users shall first be required to pay 10% of the total accrued
accounts at the time of the issuance of this Decree: Provided, further,
That interest at the rate of 3% per annum shall be imposed on the
restructured yearly amortization with an additional monthly interest of
1 ½ for delinquency and said end-users shall be required to put
up a performance bond in an amount, equivalent to 10% of the value of
the restructured account, and in the case of corporations, the
principal officers thereof shall be required to sign the contract of
restructuring jointly and severally with the corporation: Provided,
finally, That all delinquent private end-users of reparations goods
and/or services are hereby given a period of three(3) months within
which to restructure or update their accounts with the Commission
otherwise, the latter, with the assistance of the Armed Forces of the
Philippines, shall extrajudicially repossess said reparations goods and
attach all other assets of said private end-users and shall sell,
transfer, or otherwise dispose of the same in a manner as provided for
herein, without prejudice to such civil and/or criminal action that may
be taken against them under this Act and/or other existing laws. All
reparations goods so repossessed and/or to be repossessed shall be sold
through public bidding, or through negotiation if the public bidding
will fail, either by lot or by piece, at such price and under such
terms and conditions as may be determined reasonable by the Commission
upon the recommendation of an appraisal committee to be constituted by
the Commission and in which at least one (1) member each must come from
the office of the Commission Auditor and the National Economic and
Development Authority: Provided, That government instrumentalities will
be given the first option to acquire the reparations goods which they
may need or can utilize, in which case said reparations goods shall be
transferred to them without cost and the peso book value thereof; less
depreciation if any, as determined by the Commission shall be entered
in their books of accounts in accordance with this Section. All
expenses incurred in connection with the transfer of said goods shall
be borne by the government agencies concerned. chanroblesvirtualawlibrary
xxx
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xxx
Section 3. The paragraph inserted by Presidential
Decree No. 746 after the third paragraph of Section 12 of the same law
is hereby repealed.
Section 4. The amendments contained in this Decree
shall have retroactive effect as of November 9, 1973, the date of
effectivity of Presidential Decree No. 332.
Section 5. All provisions of existing laws, decrees,
orders, rules and regulations, or parts thereof, inconsistent herewith
are hereby repealed or amended accordingly. chanroblesvirtualawlibrary
Section 6. This Decree shall take effect immediately.
Done in the City of Manila,
this 30th day of August, in the year of Our Lord, nineteen hundred and
seventy-five.
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