QuestionsQuestions (PRESIDENTIAL DECREE NO. 1387)
It further amends Republic Act No. 1000 to increase and adjust the ceiling for bond issuance by the President to finance public works and projects for economic and social development, and to address domestic borrowing needs for foreign-assisted projects’ peso counterpart funds.
PD 1387 amends paragraph 1 of Section 1 of RA 1000, as amended.
No. Bonds are to be issued preferably in the Philippines, but abroad if necessary.
Bonds, including lottery bonds.
To finance public works and projects for economic and social development that have high economic or social rates of return and are authorized by law, including certain land expropriation-related activities.
Expropriation of lands for subdivision and resale to individuals.
To repay or service bonded obligations of the Government incurred for such projects.
Such investments must be limited by the paying capacity of the local government unit, certified by the Secretary of Finance; and the probable income from the projects must be taken into consideration.
Government obligations, loans, and advances whether secured or unsecured, that are: (1) guaranteed by the National Government; (2) made by government-owned or controlled financial institutions other than the Central Bank to government political subdivisions, offices, and instrumentalities; (3) loans committed by government-owned and/or controlled financial institutions other than the Central Bank, guaranteed by the Government, that cannot be met on maturity.
To explain the need for expanded domestic borrowing capacity because existing bond issuance ceilings were considered insufficient to sustain the government’s development plans.
It restricts bond-financed projects to those that meet high economic or social return standards and are authorized by law, thereby shaping which projects qualify for funding.
Recommendation by the Secretary of Finance, Monetary Board, and NEDA; certification of LGU paying capacity by the Secretary of Finance; consideration of probable project income; the 80% prior-issue sale condition; and the 5% cap on certain obligations not payable on maturity.