AMENDING THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED, BY ADDING NEW SECTIONS TO TITLE VII AND TITLE VIII THEREOF.

WHEREAS, mineral and forest products have been greatly
affected by changes in international market conditions, and

WHEREAS, in order to provide a mechanism which is responsive
to such changes in international market conditions, and which could also be a
tool for economic and industrial policies, it is necessary that the National
Internal Revenue Code of 1977, as amended, be further amended accordingly.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
decree and order:

SECTION 1. A new Section 259-A is hereby added to Title VII
of the National Internal Revenue Code of 1977, as amended, which shall read as
follows:

“SEC. 259 (a). Flexibility Clause. — In the
interest of the national economy and general welfare, the President, upon
recommendation of the Minister of both the Ministries of Finance and Natural
Resources, is hereby empowered to revise the rates of tax on and classification
of mineral products, as well as to prescribe the rates of tax in cases of
marginal mines requiring protection, assistance or incentives.

“The foregoing authority may be exercised by the President if any of the
following conditions exist:

“(a) Where, in the interest of economic development, it is necessary to
redirect expenditures or consumption patterns;

“(b) Whenever by reason of fluctuation of currency values and/or inflation or
deflation, the existing taxable base and rate levels are no longer realistic or
consistent with the current price levels;

“(c) When it is necessary to counter adverse action on the part of another
country or adverse international market conditions; or

“(d) When there is need to obviate unemployment and economic and social
dislocation.

“Before any recommendation is submitted to the President of the Minister of
finance and the Minister of Natural Resources pursuant to the provisions of this
section, a public hearing shall, whenever practicable, be held and interested
parties afforded a reasonable opportunity to be heard.”

SEC. 2. A new Section 28l-A is hereby added to Title VIII of
the same Code which shall read as follows:

“SEC. 281 (a) Flexibility Clause. — In the interest
of the national economy and general welfare, the President, upon recommendation
of the Minister of both the Ministries of finance and Natural Resources is
hereby empowered to revise the rates of tax on and classification of forest
products.

“The foregoing authorities may be exercised by the President if any of the
following conditions exist:

“(a) Where, in the interest of economic development, it is necessary to
redirect expenditures or consumption patterns;

“(b) Whenever by reason of fluctuation of currency values and/or inflation or
deflation, the existing taxable base and rate levels are no longer realistic or
consistent with the current price levels;

“(c) When it is necessary to counter adverse action on the part of another
country or adverse international market conditions; or

“(d) When there is need to obviate unemployment and economic and social
dislocation.

“Before any recommendation is submitted to the President by the Minister of
Finance and the Minister of Natural Resources pursuant to the provision of this
section, a public hearing shall, whenever practicable, be held and interested
parties afforded a reasonable opportunity to be heard.”

SEC. 3. This Decree shall take effect immediately.

Done in the City of Manila, this 18th day of September, in the year of Our
Lord, nineteen hundred and eighty.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JUAN C. TUVERA
		Senior Presidential Assistant