DOJ Opinion No. 009, s. 1986

DOJ OPINION NO. 009 , s. 1986 January 17, 1986 The International Bank for Reconstruction and Development 1818 H. Street, N.W. Washington, D.C. 20433 U.S.A. Gentlemen: This has reference to the increase in the authorized capital stock of the International Bank for Reconstruction and Development ("IBRD") in accordance with Resolution No. 395 adopted by the Board of Governors of IBRD on August 30, 1984, in view of which steps are being taken by the Republic of the Philippines to comply with the conditions required for the subscription to 243 additional shares allowed the Philippines under the said resolution. Pursuant to paragraph 5 (e) (i) of the IBRD resolution abovementioned, opinion is requested setting forth (a) the requirements under Philippine law for subscribing to the additional shares of the capital stock of IBRD; (b) the manner in which the requirements under Philippine law have been fulfilled; and (c) the requirements under Philippine law making payments on the capital subscribed, including the portions of such subscriptions which are left subject to call and any amounts required to be paid in order to maintain the value of the national currency portion of the capital subscription. The statutory authority for the Philippine subscription to additional shares in the capital stock of IBRD is found in Republic Act No. 2052, as amended by Republic Act Nos. 2628 and 4682 and Presidential Decree No. 1194, entitled "An Act Authorizing the President of the Philippines to increase the Participation of the Republic of the Philippines in the International Monetary Fund and the International Bank for Reconstruction and Development, and Providing for the Procedure to Meet the Financial Requirements therefor." prcd Section 1 of the aforesaid Republic Act reads: "The President of the Philippines is hereby authorized to negotiate for the increase in the subscription of the Republic of the Philippines to the capital stock of the International Bank for Reconstruction and Development and its quota in the International Monetary Fund, in such amounts as may be required by the Articles of Agreement of the Fund and the rules that may be duly promulgated thereunder." By the foregoing provision of law, the President of the Philippines is the official authorized to act, on behalf of the Philippines, in effecting increases in the subscription of the capital stock of IBRD. This authority conferred upon the President includes the formal act of signing necessary documents to effect subscription increases. The President may execute the subscription document in person or he may designate a representative and invest such representative with power and authority to act in his behalf. This Office has consistently held that a ministerial act may be done by the President himself or through a deputy duly appointed. (See Ops., Secretary of Justice, No. 86, s. 1977; No. 178, s. 1955; No. 280, s. 1958; Nos. 99 and 206, s. 1948; and Ops. dated October 8, 1976 and July 25, 1977). On September 6, 1985, the President of the Philippines invested Prime Minister and Minister of Finance Cesar Virata with full authority to "sign and execute, for and in behalf of the Government of the Republic of the Philippines all documents pertaining to the full subscription by the Republic of the Philippines of 243 additional shares, as well as those shares that may accrue from the exercise of pre-emptive rights in the International Bank for Reconstruction and Development, pursuant to the provisions of Republic Act No. 2052, as amended." (Annex "A") Thus, the signature of Prime Minister Virata on the subscription document and all other acts performed by him in connection therewith is in pursuance of the authority duly conferred upon him by the President of the Philippines and the Philippine Government will be fully bound and obligated as subscriber under the document thus signed. With respect to the legal requirements for making payments to the capital subscribed, Sections 2 and 3 of R.A. No. 2052, as amended, supra , certain provisions for securing funds to meet the financial requirements for the subject subscription, to wit: prcd "SEC. 2. (a) To cover the initial payments on the increase in quota in the fund and subscription to the capital stock of the Bank as required under Articles of Agreements of the International Monetary Fund and the International Bank for Reconstruction and Development, the Secretary of Finance is authorized to secure for and in behalf of the Republic of the Philippines, advances from the Central Bank of the Philippines, the necessary funds against which he shall issue five-year non-interest bearing and non-negotiable promissory notes of the Republic of the Philippines: Provided , however, That said promissory notes may be renewed for another period of five years. (b) For the balance of the increase in quota and subscription payable to the Fund and the Bank, the Secretary of Finance is likewise authorized to issue special notes of the Republic of the Philippines at par which shall be non-interest bearing, and non-negotiable and shall be payable on demand by the Fund and the Bank. In the event such demand is made by the Fund or the Bank, including any call for payment on the remaining eighty per cent of the subscription to the Bank, the Central Bank of the Philippines shall advance the necessary amount, under the same arrangements provided for in paragraph (a) of this section. "SEC. 3. There is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, such sums as may be needed to reimburse the Central Bank of the Philippines for all advances that may have been made by its pursuant to Section 2 of this Act." prcd Upon the foregoing premises, the undersigned is of the opinion that the steps being taken by the Republic of the Philippines necessary to carry out its obligations under the Articles of Agreement of the IBRD with respect to the 243 additional shares of the capital stock subscribed are in compliance with the requirements under Philippine law. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice