Question & AnswerQ&A (EXECUTIVE ORDER NO. 353)
The Department of Foreign Affairs (DFA) is the government agency obligated and guaranteed the loan with the Philippine National Bank (PNB).
The loan, amounting to US$9,589,000, was entered into for the purpose of purchasing three properties located in Madrid, Rome, and Los Angeles to upgrade embassy chanceries and residences of the Philippine foreign service.
The loan is payable within five years, with the 1996 annual appropriations of the DFA for chancery rentals initially paying for the interest, and the subsequent budget appropriations from 1997 to 2001 for the purchase of properties paying for the amortization and payoff of the loan.
The properties identified for acquisition are located in the cities of Madrid, Rome, and Los Angeles.
Upgrading embassy chanceries and residences is significant because these embassies serve as showcases and centers for activities during the celebration of the Philippine Centennial in 1998 and represent the country abroad.
The Secretary of Budget and Management is ordered to include in the DFA annual budget appropriation the necessary amounts to amortize and pay off the loan.
The properties were assessed as adequate for the use of the foreign service, located in prominent and decent areas, and easily accessible by public transport.
The Executive Order authorizes the purchase of the properties through financing by entering into a loan agreement with the Philippine National Bank, which serves as bridge financing for the acquisition.