EXECUTIVE ORDER NO. 32 July 24, 1986
DIRECTING THE ESTABLISHMENT OF A PROGRAM FOR THE CONVERSION OF PHILIPPINE EXTERNAL DEBT INTO EQUITY INVESTMENTS
WHEREAS, it has come to the attention of the Government that Philippine external debt obligations owed to commercial banks or financial institutions are being traded in the secondary market;
WHEREAS, long-term equity investments in Philippine enterprises are essential to economic developments;
WHEREAS, the magnitude of the external debt of the Philippines is imposing a heavy burden on the country's resources.
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order:
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the Government (a) to stimulate long-term equity investments in Philippine enterprises by both foreign investors and Filipinos; (b) to encourage the repatriation to the Philippines of foreign currency holdings of Philippine residents held abroad for the purpose of capitalizing equity investments in the Philippines; (c) to provide additional incentives for investments in designated sectors of the Philippine economy...
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Executive Orders
Directing The Establishment Of A Program For The Conversion Of Philippine External Debt Into Equity Investments
Executive Order No. 32
Declaration of Policy
- Stimulate long-term equity investments in Philippine enterprises by foreign investors and Filipinos. (Section 1)
- Encourage repatriation of foreign currency holdings of Philippine residents for capitalizing equity investments in the Philippines. (Section 1)
- Provide incentives for investments in designated sectors of the Philippine economy that require revitalization. (Section 1)
- Reduce the external debt burden of the Philippines. (Section 1)
Conversion Program
- The Central Bank of the Philippines shall establish a program to convert Philippine external debt obligations owed to commercial banks or financial institutions into equity investments in Philippine enterprises. (Section 2)
- Investors, whether Filipino or foreign, who hold or purchase such obligations and have them redeemed or paid in pesos by the borrower or obligor, may invest the peso proceeds in the equity of Philippine enterprises, under terms and conditions prescribed by the Central Bank. (Section 2)
Incentives
- Incentives, such as more liberal terms of repatriation of investments and remittance of earnings, may be provided to investments in preferred sectors or areas of the Philippine economy made under the program, as determined by the Monetary Board of the Central Bank, considering sectors that require revitalization and foreign exchange earnings industries. (Section 3)
Limitations
- The Central Bank may provide limitations to the repatriation of investments and remittance of earnings from investments made under the program, considering monetary, credit, exchange conditions, and the terms of the general restructuring of Philippine external debt obligations. (Section 4)
Fees
- The Central Bank may impose and collect a reasonable application fee for each application for the conversion of external debt into equity investment. (Section 5)
- The Central Bank may also impose and collect for the account of the Government an additional fee on a conversion transaction, considering the prevailing rates at which Philippine external debt obligations are being traded in the secondary market. (Section 5)
Peso Credits
- The Central Bank may extend peso credits through banking institutions to a government-owned or controlled corporation to enable such corporation to reduce or pay its external debt obligations in pesos in connection with conversion transactions under the program, under terms and conditions prescribed by the Monetary Board, considering the prevailing rates at which Philippine external debt obligations are being traded in the secondary market, the availability of credit, and the level of money supply. (Section 6)
Implementation
- The Monetary Board, in coordination with the Minister of Finance, shall promulgate the rules and regulations to implement the provisions of this Executive Order, subject to the approval of the President. (Section 7)
Repealing Clause
- Any provision of law, decree, executive order, or other issuances inconsistent with this Executive Order are hereby repealed or modified accordingly. (Section 8)
Effectivity
- This Executive Order shall take effect immediately. (Section 9)
- Stimulate long-term equity investments in Philippine enterprises by foreign investors and Filipinos. (Section 1)
- Encourage repatriation of foreign currency holdings of Philippine residents for capitalizing equity investments in the Philippines. (Section 1)
- Provide incentives for investments in designated sectors of the Philippine economy that require revitalization. (Section 1)
- Reduce the external debt burden of the Philippines. (Section 1)
Conversion Program
- The Central Bank of the Philippines shall establish a program to convert Philippine external debt obligations owed to commercial banks or financial institutions into equity investments in Philippine enterprises. (Section 2)
- Investors, whether Filipino or foreign, who hold or purchase such obligations and have them redeemed or paid in pesos by the borrower or obligor, may invest the peso proceeds in the equity of Philippine enterprises, under terms and conditions prescribed by the Central Bank. (Section 2)
Incentives
- Incentives, such as more liberal terms of repatriation of investments and remittance of earnings, may be provided to investments in preferred sectors or areas of the Philippine economy made under the program, as determined by the Monetary Board of the Central Bank, considering sectors that require revitalization and foreign exchange earnings industries. (Section 3)
Limitations
- The Central Bank may provide limitations to the repatriation of investments and remittance of earnings from investments made under the program, considering monetary, credit, exchange conditions, and the terms of the general restructuring of Philippine external debt obligations. (Section 4)
Fees
- The Central Bank may impose and collect a reasonable application fee for each application for the conversion of external debt into equity investment. (Section 5)
- The Central Bank may also impose and collect for the account of the Government an additional fee on a conversion transaction, considering the prevailing rates at which Philippine external debt obligations are being traded in the secondary market. (Section 5)
Peso Credits
- The Central Bank may extend peso credits through banking institutions to a government-owned or controlled corporation to enable such corporation to reduce or pay its external debt obligations in pesos in connection with conversion transactions under the program, under terms and conditions prescribed by the Monetary Board, considering the prevailing rates at which Philippine external debt obligations are being traded in the secondary market, the availability of credit, and the level of money supply. (Section 6)
Implementation
- The Monetary Board, in coordination with the Minister of Finance, shall promulgate the rules and regulations to implement the provisions of this Executive Order, subject to the approval of the President. (Section 7)
Repealing Clause
- Any provision of law, decree, executive order, or other issuances inconsistent with this Executive Order are hereby repealed or modified accordingly. (Section 8)
Effectivity
- This Executive Order shall take effect immediately. (Section 9)