Ownership of Reclaimed Lands and New Foreshore
- All lands reclaimed under this authorization shall belong to the respective municipality or chartered city.
- However, the newly created foreshore along the reclaimed areas remains the property of the National Government.
Authority to Incur Indebtedness and Issue Bonds for Reclamation Projects
- Municipalities and chartered cities are authorized to incur debts with individuals, associations, corporations, or lending institutions to finance reclamation and harbor facility projects.
- They may issue bonds subject to approval by the Secretary of Finance.
- The bonds issued will be guaranteed by the Government of the Philippines.
- The Central Bank of the Philippines is tasked with the issuance, servicing, and liquidation of these bonds.
Disposition and Management of Reclaimed Lands and Funds
- Except for lands used for specific public purposes (wharves, piers, embankments, roads, parks, other public improvements), reclaimed lands may be sold or leased under rules prescribed by the municipality or city.
- Revenues from sales, leases, berthing fees, and other earnings tied to port facilities must be credited to a special fund.
- Surplus funds after meeting sinking fund obligations may be used for other permanent public improvements.
Bond Issuance Procedures and Terms
- The Secretary of Finance will assess the borrowing and repayment capacity of applicants wishing to issue bonds.
- In consultation with the Monetary Board of the Central Bank, he will determine allowable bond amounts, form, interest rate, and redemption terms.
- Bond redemptions may incorporate a lottery principle allowing early redemption by lot rather than maturity date.
Payment and Taxation of Bonds and Loans
- All bonds and loans must be payable in Philippine currency or the currency in which the loan was originally received.
- Such financial instruments shall be free from any tax or public impost related to currency conversion.
- The exemption from tax must be indicated clearly on the face of the notes or certificates.
Tax Exemption of Bonds
- Bonds issued under this Act are exempt from all taxes.
- This exemption must be stated on the certificates issued.
Sinking Fund Management and Deficiency Coverage
- If revenues collected under the special fund are insufficient to cover bond obligations, the local government must cover the deficiency from its general funds.
- Annual contributions must be sufficient to redeem bonds at maturity.
- The Central Bank of the Philippines has custody of the sinking fund and invests it as directed by the Monetary Board.
Execution and Supervision of Reclamation Works
- Municipalities and cities may directly undertake reclamation and construction works through their administration.
- All work must comply with plans and specifications approved by the Director of Public Works.
- The respective District or City Engineer must certify that completed work meets approved standards.
Effectivity
- The Act takes effect immediately upon approval.