Amending Further Section Twelve Of Republic Act Numbered Seventeen Hundred And Eighty-Nine, As Amended, Otherwise Known As The Reparations Law

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PRESIDENTIAL DECREE No. 618 December 20, 1974

AMENDING FURTHER SECTION TWELVE OF REPUBLIC ACT NUMBERED SEVENTEEN HUNDRED AND EIGHTY-NINE, AS AMENDED, OTHERWISE KNOWN AS THE REPARATIONS LAW

WHEREAS, under the present provisions of the Reparations Law (Republic Act No. 1789, as amended), the acquisition and use of reparations goods is limited to Filipino citizens and entities wholly owned by the Filipino citizens;

WHEREAS, the same law provides that groups, associations and corporations which are recipient of reparations goods shall not permit a subsequent change in ownership or control as shall at any time thereafter, change the control or ownership wholly held therein by Filipino citizens;

WHEREAS, entities that have fully paid for their reparations goods are included in, and subject to the above restriction, and cannot, therefore, avail of foreign investments for purposes of expansion and development;

WHEREAS, due to the scarcity or non-availability of financing from local sources, and in line with the declared policy of the State to encourage foreign investments in certain areas of...

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Summary of Presidential Decree No. 618

Amending Section 12 of Republic Act No. 1789 (Reparations Law)

- Allows foreign equity participation in recipient corporations or associations that have fully paid for reparations goods, subject to the following conditions:
• Approval of the President of the Philippines on a case-to-case basis upon recommendation of the National Economic and Development Authority (NEDA)
• The corporation or association shall maintain Filipino ownership of at least 70% of the capital stock outstanding and entitled to vote (Section 1)
• At least 70% of the members of the Board of Directors shall be Filipino citizens (Section 1)
• The corporation or association shall report the foreign investment to the Board of Investments within 30 days after receiving the investment (Section 1)
• Foreign investments in the form of foreign exchange or other assets transferred to the Philippines shall be registered with the Central Bank of the Philippines pursuant to Section 2(2) of Republic Act No. 5455, as amended (Section 1)

- Transfer of ownership of fully paid reparations goods may be made to corporations or associations organized under Philippine laws, subject to the following conditions:
• Approval of the President of the Philippines on a case-to-case basis upon recommendation of NEDA
• At least 70% of the capital stock outstanding and entitled to vote is owned and held by Filipino citizens (Section 1)
• At least 70% of the Board of Directors are Filipino citizens (Section 1)
• The corporation or association shall begin utilizing the reparations goods in projects determined by NEDA within one year from notice of NEDA's decision (Section 1)

- Repeals or modifies provisions of existing laws, decrees, orders, rules, and regulations that are in conflict or inconsistent with this Decree (Section 2)

- Takes effect immediately (Section 3)