DOJ Opinion No. 105, s. 1983

DOJ OPINION NO. 105 , s. 1983 June 11, 1983 The Export-Import Bank of Japan 4-1 Ohtomachi 1 Chome Chiyoda-ku Tokyo, Japan Gentlemen : This has reference to the letter of Guarantee, dated April 26, 1983 issued by the Republic of the Philippines (the "Guarantor") in connection with the Loan Agreement, dated the same date, among the National Power Corporation, as borrower (the "Borrower") the Export-Import Bank of Japan ("Eximbank") and several banking institutions, as lenders (the "Lenders") whereby the Lenders agreed to lend to the Borrower an aggregate amount of the principal not exceeding Y10,455,000,000 (Art, I. Loan Agreement), the proceeds of which will be used to finance eighty-five per cent of the cost of Japanese goods and services which may be required for the implementation of the Project described in Annex "A" of the said Agreement. (Art. II, Loan Agreement) In accordance with Article XVII (2) of the aforesaid Loan Agreement, opinion is requested certifying: "(a) that the Guarantor has full power and authority to issue the Guarantee provided for in Article XVI of this Loan Agreement; "(b) that all authorizations and procedures necessary for the issuance of the said Guarantee have been effected or completed; "(c) that the said Guarantee has been duly executed and delivered by the duly authorized representative of the Guarantor; and "(d) that the said Guarantee constitutes a valid and binding obligation upon the Guarantor in accordance with the terms and conditions of the Guarantee". LexLib The Legal authority for the Republic of the Philippines to issue the guarantee for the instant loan of the Borrower is found in Section 8 (b) of the Revised Charter of the Borrower (R.A. 6395. as amended), which reads, insofar as pertinent, as follows: "Section 8. Authority to Incur Indebtedness and Issue Bonds: Their Conditions, Privileges and Exemptions; Sinking Funds; Guarantee ," xxx xxx xxx "(b) Foreign Loans The Corporation is hereby authorized to contract loans, credits, in any convertible foreign currency, or capital goods, and indebtedness from time to time from foreign governments, or any international financial institution or fund source, or to issue bonds, in such amount and in any foreign currency, on such terms and conditions as it shall deem appropriate for the accomplishment of its purposes and to enter into and execute agreements and other documents specifying such terms and conditions," The President of the Philippines by himself, or through his duly authorized representative, is hereby authorized to negotiate and contract with foreign governments or any international financial institutions or fund sources, in the name and on behalf of the Corporation, one or several loans, for the purpose of assisting in the reconstruction, or promoting the development of the economy of the country." "The President of the Philippines, by himself, or through his duly authorized representative, is hereby further authorized to guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, in the name and on behalf of the Republic of the Philippines, the payment of the loans, credits, indebtedness and bonds issued up to the amount herein authorized which shall be over and above the amount which the President of the Philippines is authorized to guarantee under Republic Act Numbered Sixty-one Hundred Forty-Two, as amended, as well as the performance of all or any of the obligations undertaken by the Corporation in the territory of the Republic of the Philippines pursuant to loan agreements entered into with foreign governments or any international financial institutions or fund source ." (Emphasis supplied). xxx xxx xxx While the President of the Philippines, under the foregoing provision of law, is the official authorized by law to execute the guarantee on behalf of the Republic of the Philippines, he may designate a representative and clothe him with authority to do the formal act of signing the document of guarantee. (See Ops., Secretary of Justice, dated Nov. 22, 1966, May 26, 1969, Feb. 22, 1972, Aug. 2, 1974, May 26, 1976, Sept. 6, 1978 and April 30, 1980) In the instant case, he has, by Full Powers dated June 23, 1982, "named, designated and authorized" Minister of Finance Cesar Virata, "or, in his absence", Ambassador Carlos Valdes, Philippines Ambassador to Japan, to "sign, execute and deliver for and in behalf of the Republic of the Philippines" the subject guarantee and has vested them "with full and all manner of power and authority for this purpose". (Annex "A") Thus the execution and delivery by Ambassador Valdes of the guarantee of the Republic of the Philippines is in pursuance of the authority conferred upon him by the President of the Philippines. LexLib It is noted, in this connection, that the Central Bank of the Philippines has extended "final approval to and authorized the registration of" the herein loan, as evidenced by its letter to the Borrower, dated June 14, 1983 (Annex "B") Upon the foregoing premises, the undersigned is of the opinion that a. the Republic of the Philippines has full power and authority to issue the Guarantee provided for in Article XVI of the Loan Agreement; b. all authorizations and procedures necessary for the issuance of the said Guarantee have been effected or completed; LexLib c. the said Guarantee has been duly executed and delivered by the duly authorized representative of the Republic of the Philippines; and d. the said Guarantee constitutes a valid and binding obligation upon the Republic of the Philippines in accordance with the terms and conditions of the Guarantee. Very truly yours, For the Minister of Justice (SGD.) JESUS N. BORROMEO Deputy Minister of Justice