Authorizing The Central Bank Of The Philippines To Engage In Special Borrowing And Lending Operations

MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 1309

AUTHORIZING THE CENTRAL BANK OF THE PHILIPPINES TO ENGAGE IN SPECIAL BORROWING AND LENDING OPERATIONS

WHEREAS, setting the foundation for long-term growth has been and still continues to be the main thrust of the country's development effort;

WHEREAS, substantial foreign financing at the least possible cost has to be continuously provided to maintain the momentum of economic growth that has already been established;

WHEREAS, this objective can best be realized through an integrated approach, rather than individual uncoordinated approaches, to the international capital markets;

WHEREAS, because of its unique position in the economy and its credit standing in the international capital markets, the Central possesses the negotiating leverage essential to this borrowing strategy;

WHEREAS, it is necessary to afford the Central Bank greater flexibility in its actions to enable it to undertake the borrowing and lending operations required to achieve this objective;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the...

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Summary of Presidential Decree No. 1309

Authorizing the Central Bank of the Philippines to Engage in Special Borrowing and Lending Operations

- Objective: To provide substantial foreign financing at the least possible cost to maintain economic growth momentum. (Preamble)
- The Central Bank is authorized to borrow from foreign banks, agencies, and international organizations for financing special credit operations. (Section 1)
- Under special circumstances deemed in the national interest by the Monetary Board, the Central Bank may grant loans from foreign loan proceeds for the following purposes:
    - To lend to banking institutions for relending to approved projects. (Section 2a)
    - To finance government development projects where official development assistance (ODA) cannot be obtained. (Section 2b)
    - To refinance existing foreign obligations obtained at relatively more onerous terms. (Section 2c)
- The Monetary Board shall establish safeguards to prevent undue inflationary effects and issue rules for a rational and coordinated approach to international capital markets. (Section 2)
- The Decree took effect immediately upon issuance on March 3, 1978. (Section 3)