Purchases and Sales of Government Securities to Be Done with Central Bank of the Phil. or with GFIs

March 25, 1983

LETTER OF INSTRUCTIONS NO. 1302

 

WHEREAS, there is a need to bring depth and order to the government securities market;

WHEREAS, the Central Bank of the Philippines is the fiscal agent of the national government; cd

WHEREAS, there are government financial institutions that are able to service the requirements of other government owned or controlled corporations with respect to purchases and sales of securities for liquidity management purposes;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby Order and Instruct that any purchases and sales of government securities made by the National Treasury and by government owned or controlled corporations shall be done with the Central Bank of the Philippines or with government financial institutions as described herein: aisa dc

Primary Issues

1. Primary issues of debt or equity instruments made by government owned or controlled corporations shall be conducted by the Central Bank of the Philippines, except as may be otherwise approved by the Monetary Board. Such primary issues shall be sold by the Central Bank at auctions to be conducted with accredited government securities dealers or using other acceptable channels of distribution, with the concurrence of the issuing corporation as to terms and conditions, following such guidelines as may be approved by the Monetary Board.

Secondary Market Transactions

2. Government owned or controlled corporations shall endeavor to keep their liquidity at such minimum level as may be necessary to ensure smooth operations. Any temporary excess liquidity shall be held in regular deposits with government banks or such government-related banks as may be authorized by the Monetary Board or in a portfolio of government securities. casia

3. The National Treasury and government owned or controlled corporations shall transact their purchases or sales of government securities only with (a) the Central Bank of the Philippines, (b) the Philippine National Bank, the Development Bank of the Philippines, the Land Bank of the Philippines, the Social Security System, the Government Service Insurance System, the Philippine Amanah Bank or banks that are wholly owned or controlled by these institutions, or (c) the Philippine Veterans Bank. Transactions handled through the institutions in (b) and (c) above shall be done with the bank proper and not through their Trust departments or equivalent units.

Qualifications

4. The Central Bank of the Philippines shall issue daily task and bid quotations for marketable government securities, which shall be made available to all interested parties, including government owned or controlled corporations. casia

Enforcement

5. The Chairman, Commission on Audit, shall see to the enforcement of this Letter and shall see to it that any transactions in government securities shall be within the quotations of the Central Bank of the Philippines.

Definition

6. The term "government owned or controlled corporation" shall refer to those corporations which are created by special laws and shall exclude government financial institutions such as the Philippine National Bank, Development Bank of the Philippines and the Philippine Amanah Bank, corporations which are organized as subsidiaries of government owned or controlled corporations under the provisions of Act 1459 or the Corporation Code and private corporations taken over by government owned or controlled corporations.

DONE in the City of Manila, this 25th day of March, Nineteen Hundred and Eighty-Three.