AMENDING PRESIDENTIAL DECREE NO. 618 WHICH AMENDED REPUBLIC ACT NO. 1789, OTHERWISE KNOWN AS THE REPARATIONS LAW

WHEREAS, Presidential Decree No. (618) amended Section 12 of
Republic Act No. 1789, as amended, otherwise known as the Reparation Law, to
allow foreign equity not exceeding 30% in recipient corporations or associations
which have fully paid for the machinery and equipment granted under the said
Act, subject to the approval of the President upon recommendation of the
National Economic and Development Authority;

WHEREAS, the minimum requirement of seventy per cent (70%)
Filipino capitalization or stock ownership in said corporation had to be imposed
because the benefit of using said machinery and equipment should accrue to
Filipinos;

WHEREAS, after continued use, said machinery and equipment
have depreciated considerably since the bulk of these equipment were acquired in
the early days of the reparations grant which started in 1956 and ended in
1976;

WHEREAS, at present time, these equipment may no longer have
any meaningful value; and

WHEREAS, in order to facilitate the entry of foreign
investments in the said recipient corporations or associations in line with the
government policy of encouraging foreign equity participation in certain areas
of economic activity, the above limitation should be lifted since it serves no
useful purpose.

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, and make as part of the law of the land, the amendment of
Section 12 of Republic Act No. 1769, as amended, as follows:

SECTION 1. The fifth paragraph of Section 12 of Republic No.
1789, as amended, is hereby amended to read as follows:

“The contract of sale shall bear the conditions that no capital goods thus
acquired shall be resold, leased or in any other manner disposed of except to
Filipino citizens or to entities wholly owned by Filipino citizens who shall
continue the utilization thereof in the projects for which the goods were
originally intended or in similar projects included in the economic development
program of a similar priority, subject, however to the further, condition that
groups, associations and corporations which are recipient of such goods shall
not permit any subsequent change in ownership or control as shall at any time
thereafter change the control or ownership wholly held therein by Filipino
citizens: Provided, however, That, subject to the approval of the Board
of Investments, taking into account the condition of the equipment involved and
criteria for the entry of foreign investment under Republic Act No. 5455,
recipient corporations or associations which have fully paid for such goods may
allow foreign equity participation therein when the same is necessary for
further development and expansion.

SEC. 2. All provisions of existing laws, decrees, orders,
rules and regulations, or parts thereof, in conflict or inconsistent herewith,
are repealed or modified accordingly.

SEC. 3. This Decree shall take effect immediately.

DONE in the City of Manila, this 21st day of August, in the year of Our Lord,
nineteen hundred and eighty.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JOAQUIN. T. VENUS, JR.
		Presidential Assistant