Guarantee of DFA Loan for Property Purchase

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EXECUTIVE ORDER NO. 353: Guarantee of DFA Loan for Property Purchase

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Title Supreme Court: Guarantee of DFA Loan for Property Purchase

Law: Executive Order No. 353

Decision Date: Jun 28, 1996

Fidel V. Ramos mandates the Department of Foreign Affairs to secure a $9.6 million loan from the Philippine National Bank for acquiring properties in Madrid, Rome, and Los Angeles, ensuring budget allocations for loan amortization from 1997 to 2001 to enhance the Philippine foreign service's facilities ahead of the 1998 Centennial celebrations.

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Identification and Evaluation of Properties for Acquisition

The Department of Foreign Affairs (DFA) identified three properties suitable for purchase located in Madrid, Rome, and Los Angeles.
These properties were evaluated and deemed adequate for foreign service use.
The locations were noted as prominent, respectable, and easily accessible by public transportation.

Loan Agreement with Philippine National Bank (PNB)

After consultations, DFA and PNB agreed to a loan of US$9,589,000 to finance the property acquisition.
The loan functions as bridge financing to enable immediate purchase of the three identified properties.
The loan is repayable over a period of five years.

Financing and Payment Scheme

Interest payments on the loan for 1996 were to be covered by the DFA's existing chancery rental budget for the three posts.
Annual budget appropriations for the purchase of properties from 1997 to 2001 were mandated to cover amortization and pay off the principal loan.

Executive Order Directives

President Fidel V. Ramos exercised his lawful authority to obligate and guarantee this loan agreement between DFA and PNB.
The Secretary of Budget and Management was ordered to include necessary amounts in the DFA's annual budget for property purchase amortization and loan repayment for the years 1997 to 2001.
This ensured financial sustainability and legal safeguard for the loan repayment scheme.

Legal and Administrative Implications

The Executive Order establishes a binding obligation on the government to guarantee DFA's loan.
It integrates the loan repayment as a part of the DFA's official budgetary process.
The measure reflects a systematic approach to government financing for foreign service infrastructure upgrading, ensuring compliance and accountability in loan servicing.

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