Establishment of Conversion Program
- The Central Bank of the Philippines is mandated to establish a program allowing the conversion of Philippine external debt obligations held by commercial banks or financial institutions into equity investments.
- Investors with external debt obligations redeemed or paid in pesos can invest the peso proceeds in Philippine enterprises under terms prescribed by the Central Bank.
- The program aims to align with the policy objectives stated.
Incentives for Investments
- The Central Bank may grant incentives, including more liberal terms on repatriation and remittance of investment earnings.
- Incentives target investments in preferred sectors or areas, especially those requiring prompt economic revitalization and foreign exchange earning industries.
- The Monetary Board of the Central Bank determines these incentives.
Limitations on Repatriation and Remittance
- The Central Bank may impose limitations on repatriation of investments and remittance of earnings under the conversion program.
- Considerations for limitations include monetary, credit, and exchange conditions, as well as terms of general restructuring of external debt.
Fees and Charges
- The Central Bank may impose and collect reasonable application fees for conversion applications.
- Additional fees may be collected on conversion transactions for government account, influenced by prevailing secondary market rates of external debt obligations.
Extension of Peso Credits
- The Central Bank, through banking institutions, may extend peso credits to government-owned or controlled corporations.
- These credits are for enabling these corporations to reduce or pay external debt obligations in pesos related to conversion transactions.
- Terms consider secondary market conditions, credit availability, and money supply levels.
Rulemaking Authority
- The Monetary Board, coordinating with the Finance Minister, is empowered to promulgate implementing rules and regulations.
- Such rules require the President's approval.
Repeal of Inconsistent Laws
- Any laws, decrees, executive orders, or issuances inconsistent with this Executive Order are repealed or modified accordingly.
Effectivity
- The Executive Order takes effect immediately upon issuance.