Law Summary

Introduction

This Executive Order No. 298, issued on January 30, 1996, by President Fidel V. Ramos, establishes guidelines for the Asset Privatization Trust (APT) to adopt alternative and intermediate modes of privatization of assets designated for privatization under Proclamation No. 50 (s. 1986).

Background and Purpose

• Legal Principle: The APT was created to manage and dispose of certain assets for the benefit of the National Government.
• Objective: To restore and make the transferred assets viable and productive under private management, contributing to national economic recovery.
• Authority: The APT has been granted autonomy in various operational areas, including accounting, procurement, and asset management.

Section 1: Alternative and/or Intermediate Modes of Privatization

• Legal Principle: The APT is authorized to utilize specific alternative and intermediate modes of privatization before final asset disposal.

• Key Modes Defined:

  • Joint Venture: Collaboration with another entity to operate a business using APT assets.
  • Build-Operate-Transfer (B-O-T) Schemes: Proposals for infrastructure projects using APT assets.
  • Management Contract: Agreements where a corporation manages APT assets.
  • Lease-Purchase: A lease agreement that includes an option for the lessee to purchase the asset.
  • Securitization: Modification of the asset's form, such as converting it into equities.

• Important Requirements:

  • Each mode must not impede the swift disposition of assets.
  • The APT must ensure marketability and minimize operational costs.

Section 2: Applicability of Laws and Regulations

• Legal Principle: The APT's exercise of these privatization modes must comply with relevant laws.

• Key Definitions:

  • Special Committee: A committee established by the President to handle contracts and obligations after the APT's term ends.

• Important Requirements:

  • All contracts formed through these privatization modes will be managed by the special committee as per Republic Act No. 7886.

Section 3: Effectivity

• Legal Principle: The Executive Order is effective immediately upon adoption.
• Important Detail: This provision does not outline penalties or liabilities but emphasizes the immediate implementation of the order.

Key Takeaways

• The Executive Order No. 298 empowers the APT to engage in various privatization strategies to facilitate the effective management and disposal of assets.
• It establishes specific procedures and modes of privatization while ensuring compliance with existing laws.
• The order is designed to enhance asset value and promote economic recovery, with provisions for timely implementation and oversight by a special committee.