FACILITATING THE MERGER OR CONSOLIDATION OF PUBLIC UTILITIES IN TELECOMMUNICATIONS.

WHEREAS, the Government is currently engaged in instituting
vital reforms in the telecommunications industry to enable the system to play a
more effective role in the socio-economic development of the country;

WHEREAS, it is necessary that incentives be
provided to encourage the merger or consolidation of public utilities,
especially in the field of telecommunications, as a means of further promoting
the financial stability and capacity of the public utility operators;

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

SECTION 1. For the purpose of facilitating mergers or
consolidations of public utilities engaged in the operation of
telecommunications facilities, any such public utility corporation may be
increased to the extent necessary to effect such merger or consolidation by the
affirmative vote of the stockholders representing at least a majority of the
subscribed capital stock in a stockholders’ meeting called for that purpose,
notwithstanding procisions of existing laws to the contrary.

SEC. 2. The proceeds from the sale of stocks and/or the
consolidation of assets, resulting from any corporate merger of consolidation,
upon the approval of the President, shall be free from all taxes on capital
gains and income tax, notwithstanding provisions of existing laws to the
contrary.

SEC. 3. This Decree shall take effect immediately and shall
remain in force for a period of five (5) years from date hereof.

Done in the City of Manila, this 1st day of January, in the year of Our Lord,
nineteen hundred and eighty-one.

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