Legal basis and policy rationale
- The decree is premised on the national need for the Republic of the Philippines to enter into contracts or transactions with international banking, financial, and other foreign enterprises.
- The decree recognizes existing laws that authorize the Republic to contract foreign obligations, including borrowings in foreign currency.
- The decree recognizes existing laws that authorize the Republic to guarantee foreign obligations of government-owned or government-controlled corporations and other entities.
- The decree directs that a specific procedure be established for express waivers of sovereign immunity related to international contracts or transactions.
Who may waive sovereign immunity
- When the law expressly authorizes the Republic of the Philippines to contract or incur a foreign obligation, the Republic may consent to be sued in connection with that foreign obligation.
- The President of the Philippines or his duly designated representative may act on behalf of the Republic.
- The President or designated representative may contractually agree to waive claims of sovereign immunity in connection with the foreign obligation.
When a waiver applies
- A waiver may be made in connection with a foreign obligation that is contracted or incurred by the Republic of the Philippines pursuant to a legal authorization.
- The waiver must be made contractually by the President or his duly designated representative acting for the Republic.
What sovereign immunity is waived
- The waiver may cover any claim to sovereign immunity from suit or legal proceedings.
- The waiver may cover sovereign immunity from set-off.
- The waiver may cover sovereign immunity from attachment.
- The waiver may cover sovereign immunity from execution with respect to the Republic’s property.
- The Republic may be sued in any appropriate jurisdiction regarding the foreign obligation.
Definition of “foreign obligation”
- A foreign obligation means any direct, indirect, or contingent obligation or liability that:
- is capable of pecuniary estimation; and
- is payable in a currency other than Philippine currency.
Conditions preserving prior waivers
- Nothing in Presidential Decree No. 1807 revokes or repeals any waiver of sovereign immunity from suit or legal proceedings.
- Nothing in Presidential Decree No. 1807 revokes or repeals any waiver of sovereign immunity from set-off, attachment or execution granted under or pursuant to other provisions of law.