M a n i l a



WHEREAS, under the provisions of Presidential Decree No. 752, local governments have been provided access to other credit facilities in order that they may raise additional funds for priority community projects;

WHEREAS, local governments have amply demonstrated the technical capability to undertake self-liquidating and/or income producing development projects;

WHEREAS, with the implementation of Presidential Decree No. 752, most local governments have demonstrated the capacity to regularly and promptly meet loan payments to various government lending institutions such that in most cases, the mandatory provisions requiring the guarantee of the National Government for domestic loans have not been found to be necessary;

WHEREAS, to enable the local governments to meet the capital requirements of development projects which may be funded from the proceeds of bonds and other long-term securities, there is also an immediate need to increase the ceiling of one-half of one percent of the total assessed value of taxable properties prescribed under Presidential Decree No. 752 which delimits the aggregate amount of such bonds and securities that the local governments may issue at any one time;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby decree and order:

Section 1. Section 4(a) of PD 752 is hereby amended to read as follows:

"Sec. 4. Domestic Loans, Credits, and Other Forms of Indebtedness. (a) Provincial, city and municipal governments may upon recommendation of the Secretary of Finance contract loans, credits, and other forms of indebtedness with the Philippine National Bank, the Development Bank of the Philippines, the Government Service Insurance System, and or any other national lending institution to finance the construction, installation, improvement, expansion, operation, or maintenance of electric light and power plants, public markets and slaughterhouses, waterworks and irrigation systems, telephone and radio communications systems, government housing projects, the purchase of rural and urban estates and other capital investment projects, subject to such terms and conditions as may be prescribed by law and the provisions of the respective characters of the aforesaid banks and lending institutions: Provided, however, That whenever the said banks and other lending institutions consider other guarantee or collaterals offered by local governments as sufficient to cover the loan repayment, the guarantee of the National Government may be dispensed with."

x x x           x x x          x x x

Section 2. Section 6(a) of PD 752 is also hereby amended to read as follows:

"Sec. 6. Bonds and Other Long-Term Securities. (a) Provinces and cities are hereby authorized to issue bonds, debentures, securities, collaterals, notes and other obligations to finance self-liquidating and/or income-producing development projects pursuant to the priorities established in the development program as certified to by the National Economic and Development Authority, but in no case to exceed at any time an aggregate amount equivalent to FIVE per cent of the total assessed value of taxable real property within the territorial jurisdiction of the local government unit. . . .

x x x           x x x          x x x

Section 3. All laws or parts of laws contrary to, or inconsistent with this Decree are hereby repealed, amended, or modified accordingly.

Section 4. This Decree shall take effect upon approval.

Done in the City of Manila, this 8th day of September, in the year of Our Lord, Nineteen Hundred and Seventy-Seven.

The Lawphil Project - Arellano Law Foundation