Tenth Congress
First Regular Session

Begun and held in Metro Manila, on Monday, the twenty-fourth day of
July, nineteen hundred and ninety-five.

(Republic Act No. 8182)

AN ACT EXCLUDING OFFICIAL DEVELOPMENT ASSISTANCE (ODA) FROM THE FOREIGN DEBT LIMIT IN ORDER TO FACILITATE THE ABSORPTION AND OPTIMIZE THE UTILIZATION OF ODA RESOURCES, AMENDING FOR THE PURPOSE PARAGRAPH 1, SECTION 2 OF REPUBLIC ACT NO. 4860, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Title. This Act shall be known as the Official Development Assistance Act of 1996.

SEC. 2. Official Development Assistance (ODA). For purposes of this Act, ODA is a loan or loan and grant which meets all of the following criteria:
(a) It must be administered with the objective of promoting sustainable social and economic development and welfare of the Philippines;
(b) It must be contracted with governments of foreign countries with whom the Philippines has diplomatic, trade relations or bilateral agreements or which are members of the United Nations, their agencies and international or multilateral lending institutions;
(c) There are no available comparable financial institutions;
(d) It must contain a grant element of at least twenty-five percent (25%). Grant element under this Act is the reduction enjoyed by the borrower whenever the debt service payments which shall include both principal and interest and expressed at their present values discounted at ten percent (10%) are less than the face value of the loan or loan and grant. The grant element of a loan or loan and grant is computed as the ratio of (i) the difference between the face value of the loan or loan and grant and the debt service payments to (ii) the face value of the loan or loan and grant.

SEC. 3. Amendatory Clause. Official Development Assistance, as defined in this Act, is hereby excluded from the application of Paragraph1, Section 2 of Republic Act No. 4860, as amended: Provided, That the weighted average grant element of all ODA at anytime shall not be less than forty percent (40%): Provided, further; That in no case shall the interest rate on the loan or loan component exceed seven percent (7%).

SEC. 4. Use of ODA for Equitable Development. The proceeds of ODA shall be used to achieve equitable growth and development in all provinces through priority development projects for the improvement of economic and social service facilities taking into account such factors as land area, population, scarcity of resources, low literacy rate, infant mortality and poverty incidence in the area: Provided, That rural infrastructure, countryside development and economic zones established under the PEZA law shall be given preference in the utilization of ODA funds. Towards this end, the National Economic and Development Authority (NEDA) shall endeavor to obtain ODA funds from donor countries, which shall approximately be five percent (5%) of the total ODA loan from the immediately preceding year. Said funds shall be administered by the NEDA for project identification, feasibility studies, master planning at local and regional levels, and monitoring and evaluation: Provided, further; That ODA shall not be availed of or utilized directly or indirectly for the following:
(a) Telephone programs contracted as of 1 January 1996 except basic telephone programs and projects for rural areas not adequately serviced and/or currently developed by private enterprises shall be entitled to ODA loan availments;
(b) Projects mandated primarily by law to be served by the private sector; and
(c) Financing for private corporations with access to commercial credit.
The NEDA shall ensure that the ODA obtained shall be for previously identified national priority projects which are urgent or necessary. ODA shall not be accepted or utilized solely because of its availability, convenience, or accessibility.
Provided, finally, That the expressed approval of Congress shall be obtained by the Executive Department prior to the negotiation and implementation of projects funded from ODA on or after 1 January 1995 as well as those that have not been finalized.

SEC. 5. Counterpart Funds. The counterpart funds necessary to implement each ODA project must be included in the Annual Expenditure Program submitted by the President to Congress within thirty (30) days from the opening of every regular session. Any request for funds to cover cost overruns must be submitted to Congress for appropriation.

SEC. 6. Mechanisms for the Distribution and Utilization of ODA Funds. The President of the Republic of the Philippines, upon recommendation of the NEDA, shall develop and formulate the mechanism for the equitable distribution and utilization of ODA funds to all provinces consistent with the provisions of this Act.

SEC. 7. Applicability. This Act shall apply to ODA loans and loans and grants contracted on or after 1 January 1995.
Notwithstanding the exclusion of ODA loans as prescribed in Section 3 hereof from the debt ceiling of Ten billion US dollars (US$10B) prescribed in Section 2 of Republic Act No. 4860, as amended by Presidential Decree No. 1939, nothing contained in this Act shall be interpreted to mean that whatever ODA loans that are within the debt ceiling of Ten billion US dollars (US$10B) can be substituted or replaced by non-ODA loans.

SEC. 8. Oversight. Pursuant to its constitutional duties, the Executive Department, particularly NEDA, the Commission on Audit and Congress shall discharge Oversight functions, to wit:
(a) The NEDA shall conduct an annual review of the status of all projects financed by ODA, identify causes of delays, reasons for bottlenecks, cost overruns, both actual and prospective, and continued viability, and report to Congress not later than June 30 of each year;
(b) The Commission on Audit shall conduct an audit on each ongoing and completed project and report to Congress not later than June 30 of each year; and
(c) There shall be a Congressional Oversight Committee composed of the Chairmen of the Committee on Ways and Means of both the Senate and the House of Representatives, five (5) members each from the Senate and the House representing the majority and two (2) members each from the Senate and the House representing the minority to be designated by the leaders of the majority and minority in the respective chambers.

SEC. 9. Continuous Monitoring. All concerned implementing and oversight agencies shall submit to the NEDA all information and reports as may be required by it to review draft contracts and to assess the performance of individual ongoing projects as well as the overall performance of all projects which are funded in whole or in part by ODA.

SEC. 10. Report. It shall be the duty of the President of the Republic of the Philippines to submit, within thirty (30) days after the opening of every regular session, a separate report to each member of Congress on the amount of ODA loans and grants incurred under this Act.

SEC. 11. Implementation, Restrictions, Rules and Regulations. In the implementation of the projects: (a) Consultants for the feasibility and design aspects of the project may not participate, directly or indirectly, in any subsequent phase of project implementation; (b) Project execution shall not be delegated by the implementing agency except where the latter does not have the capacity to implement such project; (c) In the hiring of consultants, contractors, architects, engineers, and other professionals necessary for a project's implementation, Filipinos shall be given preference; (d) In the purchase of supplies and materials, preference shall be given to Filipino suppliers and manufacturers, so long as the same shall not adversely alter or affect the project, and such supplies and materials are to the standards specified by the consultants, contractors, architects, engineers, and other professionals connected with the projects; and (e) ODA projects shall not be exempt from the requirement of first obtaining an Environmental Compliance Certificate (ECC), or other such certificates and clearances necessary or required by law for the purpose of environmental protection, from the Department of Environment and Natural Resources (DENR) or proper government agency, as the case may be.
The NEDA shall promulgate the Implementing Rules and Regulations (IRR) to implement this Act within thirty (30) days from its approval.
The Implementing Rules and Regulations shall take effect five (5) days after publication in a newspaper of general circulation.

SEC. 12. Separability Clause. Provisions herein which may be declared unconstitutional shall not revoke the effectivity and enforcement of other provisions of this Act.

SEC. 13. Repealing Clause. All laws, decrees, executive orders, rules and regulations and other issuances inconsistent with this Act are hereby repealed or amended accordingly.

SEC. 14. Effectivity. This Act shall take effect after five (5) days from its publication in the Official Gazette or in at least two (2) national newspapers of general circulation whichever date comes earlier.

Approved,

(Sgd.) NEPTALI A. GONZALES (Sgd.) JOSE C. DE VENECIA, JR.
President of the Senate Speaker of the House of
Representatives

This Act which is a consolidation of House Bill No. 7137 and Senate Bill No. 1548 was finally passed by the House of Representatives and the Senate on June 6, 1996.

(Sgd.) HEZEL P. GACUTAN (Sgd.) CAMILO L. SABIO
Secretary of the Senate Secretary General
House of Representatives

Approved: June 11, 1996

(Sgd.) FIDEL V. RAMOS
President of the Philippines

Implementing Rules and Regulations (IRR) for
Republic Act (R.A.) 8182, Otherwise Known as
"The Official Development Assistance (ODA)
Act of 1996"

Approved by the
National Economic and Development Authority (NEDA) Board
On 23 July 1996

RULE 1. PRELIMINARY PROVISION

These Implementing Rules and Regulations (IRR) shall cover all official development assistance loans or loans and grants as hereunder defined, contracted by the President on behalf of the National Government on or after 1 January 1995 under Republic Act (R.A.) 8182 amending Paragraph 1, Section 2 of R.A. 4860, as amended.

RULE 2. GENERAL PROVISIONS

SECTION 2.1 Definition of Terms. For purposes of these Implementing Rules and Regulations, the terms and phrases hereunder shall be understood as follows:
a. Act - Refers to R.A. 8182, amending Paragraph 1, Section 2 of R.A. 4860.
b. Implementing Agency/Agencies - Refers to any department, bureau, office, commission, authority or agency of the national government, including government-owned or -controlled corporations (GOCCs), authorized by law or their respective charters, and local government units (LGUs) likewise authorized by law to undertake development projects.
c. Weighted Average Grant Element - Refers to the sum of the products of: (i) the grant element of the ODA loan or loan and grant and (ii) the proportion of the loan or loan and grant to the total outstanding loans and loans and grants.
d. Interest Rate -The interest rate of the loan or the loan component of the loan and grant is the nominal interest rate at the time the loan is contracted.
e. ODA-Assisted Project - Refers to a project that is funded partly or wholly by an ODA loan or loan and grant.
f. Counterpart Funds - Refers to the component of the project cost to be financed from government-appropriated funds, as part of the government's commitment in the implementation of the project. In the case of government-owned and -controlled corporations, the total peso counterpart may be the equity contribution of the national government and/or internally generated cash.
g. Head of Agency - Refers to the authorized approving authority of the Agency, local government unit, and, in the case of a GOCC, the GOCC Governing Board.
h. Local Government Units (LGUs) - Refers to provincial, city and/or municipal government entities.
i. IRR - Refers to the Implementing Rules and Regulations of R.A. 8182, unless otherwise specified.
j. Cost Overruns - Refers to additional costs over and above the ICC-approved project cost.
k. Project Cost - Shall include construction cost, price, administrative and physical contingencies and interest during construction.
l. Loan and Grant - Refers to a financing facility that combines a loan and grant, neither of which can be offered independently to the borrower.
m. Loan Proceeds - Refers to loan or loan and grant disbursements for ODA-assisted projects.
n. Supplies - Shall include both goods and equipment.

RULE 3. FUNDS FOR PROJECT DEVELOPMENT

SEC. 3.1 Funds Sourcing and Administration. The NEDA shall aim to obtain ODA funds worth approximately five (5) percent of total ODA loans and loans and grants committed in the immediately preceding year for project identification, preparation of feasibility studies, including environmental impact assessment, master planning, and monitoring and evaluation of projects. The NEDA Secretariat shall coordinate the efforts in obtaining ODA funds for the said activities. Should portions of the funds be sourced from ODA lending institutions, NEDA and DBM shall establish a mechanism for securing appropriations cover for the utilization of such portions of the fund. The guidelines for the administration of the funds shall be submitted by the NEDA Secretariat for approval by the NEDA Board.

SEC. 3.2 Forms of Assistance. ODA resources to be channeled to the said activities may, among others, take the following forms of assistance:
a. Technical assistance projects designed to conduct any of the abovementioned project development/master planning activities in support of local/regional or sectoral investment priorities;
b. Conduct of project development/master planning activities as a component of a larger investment package to be financed by an ODA donor/creditor;
c. Technical Assistance facilities designed to accommodate multiple project proposals for project development/master planning activities;
d. Conduct of and/or technical assistance for the monitoring
e. Conduct of post-evaluation and impact assessment of completed ODA-assisted projects.

SEC. 3.3 Counterpart Funds. Government counterpart funds for ODA projects for the activities enumerated in this rule shall be imputed within the regular budgets of the agencies.

RULE 4. ICC PROCESSING AND APPROVAL

Processing of projects proposed to be financed by ODA loans or loans and grants shall be in accordance with the Investment Coordination Committee's (ICC) (i) Guidelines and Procedures and (ii) Project Evaluation Guidelines and Procedures. These guidelines and procedures shall be updated as may be necessary to reflect the developments in government policies, procedures and methodologies regarding investment programming and project evaluation.

RULE 5. COUNTERPART AND PROCEEDS OF LOANS AND LOANS AND GRANTS

SEC. 5.1 General Principles on Budget. All expenditures, inclusive of counterpart and proceeds of loans and loans and grants funds, must be included in the annual national expenditure program to be submitted to Congress for approval.

SEC. 5.2 Budget Requirement. The budgetary requirements for the two succeeding years, inclusive of local counterpart and proceeds of loans and loans and grants of ODA-assisted projects shall be determined during the annual ODA Portfolio Review conduct by NEDA during the second semester of the year. The heads of all concerned implementing agencies, or their authorized representatives, shall certify and approve the budget estimates submitted for this exercise. NEDA and DBM shall work closely to ensure that the projected budgets are consistent with the Work and Financial Plans and Programs of Work for the projects.
The budget requirements of projects that are meant to cover cost overruns shall only be included in the national expenditure program to be submitted to Congress with the prior approval of the ICC.

SEC. 5.3 Agency Submission of Budget Documents. All implementing agencies shall submit to the NEDA Secretariat, for the purpose of conducting the annual ODA Portfolio Review, the following project information:
a. Status of project implementation to include:
i. cumulative physical targets and actual accomplishments expressed in output indicators and relative percentage accomplishments;
ii. corresponding budget support and funds utilization; and
iii. schedule of implementation, indicating whether the project would be completed on schedule, or when slippage is expected, the extent of and factors causing such slippage;
b. Projected annual physical targets, by component, and the corresponding budget requirements for the remaining years of project implementation;
c. Explanations for implementation delays encountered, if any, and actions taken;
d. Magnitude of and explanations for cost overruns incurred, if any, and prospective cost overruns to be incurred for the remaining years of project implementation;
e. Summary of expenditures for land/right-of-way acquisition, capital outlays, consulting services and project management office operations; and
f. Other information which may be relevant in assessing the progress of implementation of the project.
Implementing agencies may use existing forms that provide the required information and shall adopt additional reporting forms as may be prescribed by NEDA in providing other relevant information.

Sec. 5.4 Projects with Cost Overruns. Projects with cost overruns, regardless of cause, shall be remanded to the ICC for reappraisal.
The reappraisal will determine the continued viability of the projects and the reasonable levels of cost overruns that shall be the basis for recommending additional appropriations to be included in the annual national expenditure program to be submitted to Congress.
A quarterly report on projects with cost overruns shall be submitted by the NEDA Secretariat to ICC for inclusion in the annual report to Congress.

RULE 6. GOVERNMENT PROCUREMENT

SEC. 6.1 Project Execution. As a general rule, all government projects funded partly or wholly through ODA shall be administered by the concerned implementing agencies. In case a government project is of such magnitude or scope as would require a level of expertise or attention beyond the capability of the agency concerned, the head of agency may delegate project execution subject to the submission of a report indicating the reasons and justifications therefore for approval by the ICC and confirmation by the NEDA Board.

SEC. 6.2 Filipino Preference/Association by Foreign Firms with Local Firms/ Practitioners. In order to develop/upgrade a pool of Filipino experts and managers, the role of technology transfer in the implementation of development projects shall be ensured. To effect technology transfer to local firms/individuals, foreign consulting and/or construction firms wishing to participate in development projects in the Philippines shall be required to associate themselves with local firms and/or shall be required to engage Filipinos in carrying out the projects which they have selected to undertake. Such preference shall not adversely affect the project and shall meet the minimum standards/specifications required thereof.
The foregoing paragraph shall be without prejudice to existing laws including but not limited to R.A. 4860 (Foreign Borrowings Act), Presidential Decree (P.D.) 1594 (for procurement of civil works), Executive Orders (E.O.s) 164 (for the procurement of consulting services) and 302 (for procurement of goods/equipment).

SEC. 6.3 Competitive Procurement. All procurement shall be conducted in an open, fair, transparent and competitive manner in accordance with the provisions of P.D. 1594, E.O. 164 and E.O. 302 and their respective IRRs.

SEC. 6.4 Limitations on Consultants and Consultancy Firms. Consultants and consulting firms engaged in the feasibility studies and design aspects of the project may not participate directly or indirectly in any subsequent phase of project implementation.

SEC. 6.5 Costs of Consultant Services. For consulting services contracts, no increase in costs shall be allowed beyond and above the contract amount indicated in the agreement for consulting services except for the following:
a. Adjustment in rates in accordance with the pertinent provisions of E.O. 164 IRR on procurement of consulting services;
b. Additional works not covered under the scope of works contained in the consulting services agreement; and
c. Additional costs that may be incurred due to reasonable delays (greater than 15% of approved contract duration) in project implementation due to acts undeniably attributable to government and/or force majeure.
Such increase in costs shall be covered by a supplemental agreement and subject to the approval of the concerned head of agency or governing boards of government-owned and -controlled corporations (GOCCs) and government financing institutions (GFIs), but in no case shall the total costs, including such increase, exceed the limits of the percentage fees set forth under the pertinent provisions of E.O. 164 and its IRR on procurement of consulting services.

RULE 7. CONTINUOUS AND EFFECTIVE MONITORING

SEC. 7.1 Monitoring of Ongoing ODA-Assisted Projects. The NEDA shall conduct the continuous and effective monitoring of all ongoing ODA-assisted projects. For this purpose, all concerned implementing agencies with ODA-assisted projects shall submit to the NEDA Secretariat not later than four (4) weeks after the end of every quarter, reports containing the following information:
a. Physical targets and actual accomplishments;
b. Budget allocation, project expenditures and loan and loan and grant disbursements;
c. Statement of expenses submitted to funding agencies per month during the quarter;
d. Implementation delays experienced and actions taken;
e. Recommended actions or action plan to resolve implementation problems; and
f. Other information which may be relevant in assessing the progress of implementation of the project.
The implementing agencies shall also provide the abovecited information to the Project Monitoring Committees (PMCs) of the regions, provinces, cities and municipalities established under E.O. 93 (s.1993) amending E.O. 376 (s.1989) creating the Regional Project Monitoring and Evaluation System (RPMES); at the regional level, these may be forwarded to the NEDA Regional Offices (NROs) which serve as the secretariats of the Regional Project Monitoring Committees (RPMCs).
The NEDA shall report to the President within six (6) weeks after the end of each semester the overall performance of all ongoing ODA-assisted projects.

SEC. 7.2 Monitoring Officers. Heads of agencies shall be responsible for the monitoring of projects and the submission of appropriate reports to the NEDA Secretariat. Each concerned agency shall designate a senior official as Monitoring Officer or his alternate to serve as agency liaison for purposes of monitoring.

SEC. 7.3 Reporting on Contracts. All implementing agencies shall submit copies of contracts costing P1 million and above for consultancy and P10 million and above for civil works and supplies in accordance with pertinent provisions of existing laws such as P.D. 1594, E.O.s 164 and 302, among others, and their respective rules and regulations for purposes of NEDA's monitoring of project execution. These shall include implementation schedules using project management tools showing quarterly programmed physical outputs. Quarterly projected payments to contractors, quarterly reports on approved claims due to price escalation and variation orders of previously awarded contracts as well as other pertinent information regarding contract administration shall likewise be submitted.
The implementing agencies have the sole responsibility for determining the technical, financial, legal and moral soundness of each contract. The ICC-approved project cost shall serve as basis for NEDA's monitoring of cost overruns.

SEC. 7.4 Disaggregation of Reporting Data. To facilitate the monitoring of the equitable allocation and use of ODA among provinces, all implementing agencies shall include the provincial breakdown of physical accomplishments and funds utilization in reports to be submitted to the NEDA Secretariat.

RULE 8. REPORTING

NEDA shall report to Congress the outcome of the annual ODA Portfolio Review including the performance of projects financed by ODA, cause of delays, reasons for bottlenecks, cost overruns, both actual and prospective, not later than June 30 of every year.

RULE 9. FINAL PROVISIONS

SEC. 9.1 Existing Laws. The rules contained herein are without prejudice to the application of existing laws not expressly amended under R.A. 8182.

SEC. 9.2 Effectivity of the IRR and Amendments. These IRR, including any subsequent amendments thereto, shall take effect five (5) days after their publication in a newspaper of general circulation. No amendments to these IRR may be adopted and prescribed without due public consultations.

Attested by:

(Sgd.) CIELITO F. HABITO
Secretary of Socioeconomic Planning
Director-General, NEDA
Vice-Chairman, NEDA Board and
Chairman, IRR Committee

Foreign Borrowings Act of 1966

Sixth Congress of the Republic
of the Philippines
Third Special Session

Tenth Congress
First Regular Session

(Republic Act No. 4860)

AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO OBTAIN SUCH FOREIGN LOANS AND CREDITS, OR TO INCUR SUCH FOREIGN INDEBEDNESS, AS MAY BE NECESSARY TO FINANCE APPROVED ECONOMIC DEVELOPMENT PURPOSE OR PROJECTS, AND TO GUARANTEE, IN BEHALF OF THE REPUBLIC OF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLED BY THE GOVERNMENT OF THE PHILIPPINES FOR ECONOMIC DEVELOPMENT PURPOSES INCLUDING THOSE INCURRED FOR PURPOSES OF RELENDING TO THE PRIVATE SECTOR, APPROPRIATING THE NECESSARY FUNDS THEREFOR, AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. The President of the Philippines is hereby authorized in behalf of the Republic of the Philippines to contract such loans, credits and indebtedness with foreign governments, agencies or instrumentalities of such foreign governments, foreign financial institutions, or other international organizations, with whom, or belonging to countries with which, the Philippines has diplomatic relations, as may be necessary and upon such terms and conditions as may be agreed upon, to enable the Government of the Republic of the Philippines to finance, either directly or through any government office, agency or instrumentality or any government-owned or controlled corporation, industrial, agricultural or other economic development purposes or projects authorized by law: Provided, That at least seventy-five (75%) percent shall be spent for purposes or projects which are revenue-producing and self-liquidating, such as electrification, irrigation, river control and drainage, telecommunication, housing, construction and improvement of highways and bridges, airports, ports and harbors, school buildings, waterworks and artesian wells, air navigation facilities, development of fishing industry, and others: Provided, That such foreign loans shall be used to meet the foreign exchange requirements or liabilities incurred in connection with said development projects to cover the cost of equipment, related technical services and supplies, where the same are not obtainable within the Philippines at competitive prices as well as part of the peso costs, other than working capital and operational expenses not exceeding twenty percent (20%) of the loan: Provided, further, That in the case of roads, bridges, irrigation, portworks, river control, airports, and power, the amount shall not exceed seventy percent (70%) of the loan.
The authority of the President of the Philippines as herein provided shall include the power to issue, for the purposes hereinbefore stated, bonds for sale in the international markets the income from which shall be fully tax-exempt in the Philippines.

SEC. 2. The total amount of loans, credits and indebtedness, excluding interests, which the President of the Philippines is authorized to incur under this Act shall not exceed one (1) billion United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits and indebtedness are incurred: Provided, however, That the total loans, credits and indebtedness incurred under this Act shall not exceed two hundred fifty (250) million in the fiscal year of the approval of this Act, and two hundred fifty (250) million every fiscal ear thereafter, all in United States dollars or its equivalent in other currencies.
All loans, credits and indebtedness under the preceding section shall be incurred only for particular projects in accordance with the approved economic program of the Government and after the plans for such projects shall have been prepared by the offices or agencies concerned, recommended by the National Economic Council and the Monetary Board of the Central Bank of the Philippines, and approved by the President of the Philippines.

SEC. 3. The President of the Philippines is, likewise, hereby authorized, in behalf of the Republic of the Philippines, to guarantee, upon such terms and conditions as may be agreed upon, foreign loans extended directly to, or bonds for sale in international markets issued by, corporations owned or controlled by the Government of the Philippines for industrial, agricultural or other economic development purposes or projects authorized by law, such as those mentioned in Section one of this Act, including the rehabilitation and modernization of the Philippine National Railways, the cash capital requirements of the Land Bank, electrification, irrigation, river control and drainage, telecommunication, housing, construction and/or improvement of highways, airports, ports and harbors, school buildings, waterworks and artesian wells, air navigation, development of the fishing industry, iron and nickel exploitation and development, and others: Provided, That at least seventy-five percent (75%) shall be spent for purposes or projects which are revenue-producing and self-liquidating. The loans and/or bonded indebtedness of government-owned or controlled corporations which may be guaranteed by the President under this Act shall include those incurred by government-owned or controlled financial institutions for the purpose of relending to the private sector and the total amount thereof shall not be more than five hundred (500) million United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the guarantee is made: Provided, That the government-owned or controlled financial institutions shall relend the proceeds of such loans and/or bonded indebtedness to Filipinos or to Filipino-owned or controlled corporations and partnerships, at least sixty-six (66) and two-thirds (2/3) per centum of the outstanding and paid-up capital of which is held by Filipinos at the time the loan is incurred, such proportion to be maintained until such time as the loan is fully paid: Provided, however, That during anytime that any amount of the loan remains outstanding, failure to meet with the capital ownership requirement shall make the entire loan immediately due and demandable, together with all penalties and interests, plus an additional special penalty of two per centum on the total amount due.

SEC. 4. The implementation of this Act shall be subject to, and governed by, the provisions of Executive Order (E.O.) No. 236, dated February 13, 1957, prescribing procedures for the planning of development finances, the issuance of government securities, and the disbursement of proceeds, and creating the Fiscal Policy Council an the Technical Committee on Development Finance, as amended by E.O. No. 26, dated May 26, 1966, not inconsistent with this Act, which are hereby adopted by reference and made an integral part of this Act.

SEC. 5. It shall be the duty of the President, within thirty days after the opening of every regular session, to report to the Congress the amount of loans, credits and indebtedness contracted, as well as the guarantees extended, and the purposes and projects for which the loans, credits and indebtedness were incurred, and the guarantees extended, as well as such loans which may be reloaned to Filipino-owned or controlled corporations and similar purposes.

SEC. 6. The Congress shall appropriate the necessary amount out of any funds in the National Treasury not otherwise appropriated, to cover the payment of the principal and interest on such loans, credits or indebtedness as and when they shall become due.

SEC. 7. This Act shall take effect upon its approval.

Approved: September 8, 1966.

REPUBLIC ACT NO. 8555
AN ACT AMENDING REPUBLIC ACT NO. 8182,
AND FOR OTHER PURPOSES
 
SECTION 1. Republic Act No. 8182 is hereby amended to include a new Section 11-A to read as follows:
"SEC. 11-A. In the contracting of any loan, credit or indebtedness under this Act or any law, the President of the Philippines may, when necessary, agree to waive or modify the application of any provision of law granting preferences in connection with, or imposing restrictions on, the procurement of goods or services: Provided, however, That as far as practicable, utilization of the services of qualified Filipino citizens or corporations or associations owned by such citizens in the prosecution of projects financed under this Act shall be prepared on the basis of the standards set for a particular project: Provided, further, That the matter of preference in favor of articles, materials, or supplies of the growth, production or manufacture of the Philippines, including the method or procedure in the comparison of bids for purposes therefor, shall be the subject of agreement between the Philippine Government and the lending institution."
SECTION 2. Section 4 of Republic Act No. 8182 is hereby amended to read as follows:
"SEC. 4. Use of ODA for equitable development. — The proceeds of ODA shall be used to achieve equitable growth and development in all provinces through priority development projects for the improvement of economic and social service facilities taking into account such factors as land area, population, scarcity of resources, low literacy rate, infant mortality and poverty incidence in the area: Provided, That rural infrastructure, countryside development and economic zones established under the PEZA law shall be given preference in the utilization of ODA funds. Towards this end, the National Economic and Development Authority (NEDA) shall endeavor to obtain ODA funds from donor countries, which shall approximately be five percent (5%) of the total ODA loan from the immediately preceding year. Said funds shall be administered by the NEDA for project identification, feasibility studies, master planning at local and regional levels, and monitoring and evaluation: Provided, further, That ODA shall not be availed of or utilized directly or indirectly for the following:
 
"(a) Telephone programs contracted as of 1 January 1996 except basic telephone programs and projects for rural areas not adequately serviced and/or currently developed by private enterprises shall be entitled to ODA loan availments;
 
"(b) Projects mandated primarily by law to be served by the private sector; and
 
"(c) Financing for private corporations with access to commercial credit.
 
"The NEDA shall ensure that the ODA obtained shall be for previously identified national priority projects which are urgent or necessary. ODA shall not be accepted or utilized solely because of its availability, convenience, or accessibility."
SECTION 3. Effectivity. — This Act shall take effect after five (5) days from its publication in the Official Gazette or in at least two (2) national newspapers of general circulation whichever date comes first.
 
Approved: February 26, 1998