AUTHORIZING THE NATIONAL DEVELOPMENT COMPANY (NDC) TO ISSUE BONDS FOR INFRASTRUCTURE PROJECTS

WHEREAS, there are infrastructure projects identified in the Medium
Term Public Investment Program (MTPIP) which need financial support;

WHEREAS, the National Development Company (NDC), pursuant to
Presidential Decree No. 1648, as amended, (otherwise known as the
“Revised Charter of the National Development Company”), is the corporate
vehicle of the government, designed to pursue commercial, industrial,
agricultural, mining and other enterprises which may be necessary or
contributory to the economic development of the country;

WHEREAS, Section 9 of P.D. No. 1648 authorizes NDC to issue, upon
recommendation of the Secretary of Finance and approval of the
President, tax exempt bonds and securities guaranteed by the Government;

WHEREAS, the Department of Finance supports NDC’s initiative to issue
Infrastructure bonds of up to P50 billion to finance the implementation
of infrastructure projects to stimulate the growth and further enhance
the country’s competitiveness.

WHEREAS, there is a need to authorize the issuance of bonds by NDC to support such infrastructure projects of the Government;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, do
hereby order:

SECTION 1. Authorizing NDC to Issue Bonds for Infrastructure Projects
– NDC is hereby authorized to issue bonds in the total amount of up to
PESOS: FIFTY BILLION (P50,000,000,000.00) (hereinafter referred to as
“NDC Infrastructure Bonds”).

Th e proceeds of the NDC Infrastructure Bonds shall be used to
fund, by way of loan or equity investment, the infrastructure projects
identified in the MTPIP; Provided, that:

a. the previously approved implementation of these infrastructure
projects does not prohibit financing or equity investment by the
Government;

b. that the loan or equity is in accordance with the declaration
of policy under Section 2 of P.D. 1648, as amended and all other
relevant laws on financing of infrastructure projects;

SECTION 2. Features of the NDC Infrastructure Bonds – The NDC Infrastructure Bonds shall be tax exempt and guaranteed by the Republic of the Philippines.

The Monetary Board (MB), in close coordination with the Department
of Finance (DOF) and NDC, shall promulgate such rules and regulations
regarding the eligibility features of the NDC Infrastructure Bonds.

SECTION 3. Utilization of the Proceeds of the Development Bonds
– The National Economic and Development Authority (NEDA) and NDC are
hereby directed to select which among the infrastructure projects in the
MTPIP shall be funded from the proceeds of the NDC Infrastructure
Bonds, subject to the provisions of the second paragraph of Section 1
hereof.

NDC shall issue the NDC Infrastructure Bonds based on the amount
required for the funding of each and every project, and only upon
determination by NEDA and the appropriate implementing agency for such
infrastructure project that the project is already ready for
implementation.

SECTION 4. Rules and Regulations – The DOF, the
Department of Budget and Management (DBM) and NDC shall promulgate such
rules and regulations and execute any and all documents necessary to
ensure repayment to NDC of the funds it will lend to the selected
infrastructure projects and the eventual retirement of the bonds it will
issue under this Executive Order.

SECTION 5. Repealing Clause – All executive issuances,
rules and regulations or parts thereof which are inconsistent with this
Executive Order are hereby revoked, amended, or modified accordingly.

SECTION 6. Effectivity – This Executive Order shall take effect immediately.

Adopted: 06 Aug. 2009

(SGD.) GLORIA M. ARROYO
President of the Philippines   

BY THE PRESIDENT:

(SGD.) EDUARDO R. ERMITA
Executive Secretary