PROVIDING FOR ALTERNATIVE AND/OR INTERMEDIATE MODES OF PRIVATIZATION PURSUANT TO PROCLAMATION NO. 50 (s. 1986)

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WHEREAS, the Asset Privatization Trust (APT) was created to take, for the
benefit of the National Government, title to and possession of, conserve,
provisionally manage and dispose of assets which have been identified for
privatization and transferred to the APT;

WHEREAS, the APT, in its divestment program, should seek to restore, as soon
as possible, existing physical facilities of the transferred assets into viable
and productive operations under private sector management and ownership, and
thus to contribute towards national economic recovery within the context of a private
enterprise system and thereby generate maximum cash recovery for the National
Government;

WHEREAS, the APT is authorized to conserve the transferred assets and to
rehabilitate such assets if necessary to conserve their value or permit their
sale, including, without limitation, to oversee the management and operation of
corporations or other businesses constituting such assets, and to enter into
such service agreements as may be necessary for such purpose;

WHEREAS, the APT has been accorded the widest latitude of flexibility and
autonomy in its operations, particularly in the areas of accounting, auditing,
procurement, contracting, asset management, disposition and personnel;

WHEREAS, the APT, after more than eight (8) years of existence, is left with
assets which by their physical nature, technical obsolescence, legal
impediments, or business prospects, are considered very difficult to dispose of
by final sale;

NOW, THEREFORE, I FIDEL
V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby order:

Section 1. Alternative
and/or Intermediate Modes of Privatization. To enhance the assets
transferred to the APT pursuant to Proclamation No. 50 (s. 1986)
and/or maximize recovery therefrom, but without in any way impending the speedy
disposition of these assets, the APT is hereby authorized to enter into the
following alternative modes of privatization and/or intermediate modes of
privatization prior to the final disposal of the asset, particularly, but not limited
to cases, where the asset is deemed marketable and shutdown or mothball costs
approximate costs of operation, or where preservation of factor inputs, such as
technical skills or contractual relations including franchises, is deemed
necessary:

1.1 Joint Venture – whereby the
APT arranges for the APT-held asset to carry on a specific business enterprise
with another person/entity for their mutual benefit, using their combined
funds, land resources, facilities and services, either through a joint venture
corporation or as separate personalities. Thereafter, the joint venture project
is privatized or referred to the proper government agency for implementation in
accordance with Section 23, paragraph 2 of Proclamation No. 50 (s.
1986);

1.2 B-O-T Schemes – whereby the
APT finds proponents who will undertake infrastructure and/or development
projects using the APT-held asset, under any of the arrangements provided for
under Republic Act No. 6957, as amended, which project is then referred to the
proper government agency for implementation in accordance with Section 23,
paragraph 2 of Proclamation No. 50 (s. 1986)

1.3 Management Contract –
whereby a corporation undertakes to manage or operate all or substantially all
of the business of an APT-held asset. This contract may also be designated as a
service contract or operating agreement;

1.4 Lease-Purchase – whereby the
lessee of an APT-held asset would have the right to purchase the same. The
price and terms of the purchase must be set forth for the option to be valid,
which option may run for the length of the lease period; and

1.5 Securitization – whereby the
form of the APT-held asset is changed or modified, such as from physical form
to equities or certificate of participation, subject to Section 2 of Republic Act
No. 7886.

Section 2. Applicability
of Laws and Regulations. The exercise by the APT of its authority to
enter into the foregoing alternative and/or intermediate modes of privatization
shall be subject to the pertinent laws and regulations.

At the expiration of the term of
the APT, all contracts and other obligations created through the foregoing
alternative and/or intermediate modes of privatization shall be handled by the
special committee to be created by the President pursuant to Republic Act No. 7886.

Section 3. Effectivity.
This Executive Order shall take effect immediately

DONE in the City of Manila, this 30th day of January in the year of Our
Lord, Nineteen Hundred and Ninety-Six.

(Sgd.) FIDEL
V. RAMOS
President of the Philippines

By the President:

(Sgd.) RUBEN D. TORRES
Executive Secretary

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