Ensuring the Viability of the Operation of the Cellophil Resources Corporation

May 20, 1981

LETTER OF INSTRUCTIONS NO. 1132

WHEREAS, it is the declared policy of the Government to encourage the establishment and continued viability of pioneer industries in order to further national economic development; acd

WHEREAS, Cellophil Resources Corporation is an enterprise engaged in a pioneer industry, deserving of government assistance;

WHEREAS, under the provisions of LOI No. 658 and No. 658-A, the National Development Company has been designated to hold in trust the outstanding capital stock of Cellophil Resources Corporation;

WHEREAS, Cellophil Resources Corporation is at its initial stages of operation and reasonable measures are required to ensure the viability of the corporation's operations, to protect the government's substantial exposure to said corporation, and to prevent massive layoffs in the areas where it operates;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order that:

1. The Development Bank of the Philippines shall convert its outstanding exposure, whether in the form of advances and/or foreign loans guaranteed to Cellophil, into common stocks of the corporation.

2. The Ministry of the Budget shall release to NDC P111 million in 1981 and P20 million in 1982 to support the operations of Cellophil.

3. The Bureau of Forest Development, and all other government agencies concerned, shall permit Cellophil to harvest on a selective basis Almaciga, Philippine Mahogany, and other commercial species found within concessions owned or operated by Cellophil.

4. The Bureau of Forest Development, and all other government agencies concerned, shall permit Cellophil to selectively log in the Balbalasan, and Pasil areas in accordance with wood and logging programs which Cellophil, with the assistance of the forestry and logging experts and consultants of international repute, shall draw up and implement, existing regulations to the contrary notwithstanding. Said programs should assure proper environmental protection and safety within the areas affected by its operations, particularly insofar as such operations may affect national parks, tourist resorts, watersheds and communal pasture areas.

5. The Bureau of Forest Development, and all other government agencies concerned, shall immediately issue industrial tree plantation licenses and permits upon application by Cellophil covering such areas outside the existing concessions of Cellophil but not to exceed 30,000 hectares.

6. The Ministry of Public Highways shall accelerate and undertake the construction, maintenance, repair and improvement of national highways and other feeder and barangay roads, including but not limited to the following:

a) San Juan — Agsimao (Abra) Provincial Road

b) Lagangilang (Abra) — Cervantes (Ilocos Sur) National Road

(c) Highways 5 — Abra to Kalinga National Road

7. The Ministry of National Defense shall provide all security measures to Cellophil, including its plant, plantation and logging operations, to enable it to operate efficiently.

DONE in the City of Manila, this 20th day of May, 1981. cd