Amending Certain Sections Of Republic Act Numbered Seventeen Hundred And Eighty-Nine, As Amended, Otherwise Known As The Reparations Law

Case Overview and Summary

Summary of Presidential Decree No. 332

Policy and Implementation of Reparations from Japan
- Utilize reparations payments from Japan to assure maximum economic benefit to Filipinos (Section 1)
- Reparations goods/services to be procured, disposed, and utilized according to criteria and priorities set by National Economic and Development Authority (NEDA) (Section 2a)

Capital Goods and Services
- Available only to approved government projects and Filipino citizens/entities for economic development (Section 2a)
- Private recipients limited to one application, max $1.5M value, except for vital projects approved by President after NEDA consultation (Section 2a)
- Priority given to electrification, education, cottage industries, telecommunications, mining, manufacturing, logging, shipping (Section 2a)

Non-Capital Goods
- Limited to goods not obtainable from normal imports and essential consumer/construction goods (Section 2b)
- Procured and sold through selected agency to Filipino retailers for resale to consumers (Section 2b)

Cash Payment
- $20M cash payment accrues to trust fund for WWII veterans, widows, orphans (Section 2d)
- Consumer goods procurement for trust fund done by Commission with NEDA consultation (Section 2d)
- Cash payments of $4M annually for 5 years from Special Economic Development Fund (Section 2d)

Reparations Commission
- Prepare tentative schedule of goods/services for procurement, approved by President and NEDA (Section 6a)
- Issue procurement orders specifying end-user, project, amount after schedule agreed with Japan (Section 6a-1)
- Verify end-user capacity, feasibility studies, cash down payment for private parties (Section 6a-1)
- Publish procurement orders, schedules in newspapers for transparency (Section 6a-1)

Sales Terms
- Government projects receive goods/services without cost, pay 2% service fee and incidental charges (Section 12)
- Private parties pay F.O.B. value, 2% service fee, incidental charges; cash or credit basis (Section 12)
- Credit terms: 10% down payment, 12% interest, 1.5% monthly penalty for delinquency (Section 12)
- Restructuring of delinquent accounts allowed with conditions (Section 8a-2)
- Repossession and sale of goods from delinquent private parties (Section 8a-2)

Special Economic Development Fund
- Constituted from reparations proceeds and interest (Section 4)
- Appropriated for loans by DBP, PNB for economic/industrial projects, public school buildings (Section 4)
- Allocations: 50% industrial, 30% agricultural, 20% public school buildings (Section 4)
- ₨20M for rural bank establishment, ₨50M for land purchase (Section 4)

Operating Funds
- Commission's budget from annual General Appropriation Acts (Section 10)
- Service fees, charges collected by Commission form part of operating funds (Section 10)