Business Day Special Report (March 27, 1974)

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Part of Business Day Special Report

Title: Business Day Special Report (March 27, 1974)
Issue Date: March 27, 1974
Year: 1974
Language: English
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extracted text: Famed rallyist Dodo Ayuyao and well-known drivers Jun Almario and Rene Palma prove in Manila-Dagupan economy run: The Torana 1900 combines small car gas economy and big car performance! To prove that the Torana 1900 is a unique car concept that combines small car gas eco nomy and big car performance, we- gave it an economy test-drive. Two Torana SLs and a Torana S were given a gruelling economy run from Manila to Dagupan by three well-known drivers. Result: fuel consumption averaged as much as 14.5 kms/liter. Concrete proof that the Torana is your best buy in these fuel-scarce times. When it comes to big car performance, the Torana speaks for itself. With its rugged 102 hp, 4-cylinder engine. A big trunk. Power-assisted front disc brakes. And other big car features. So if you want a unique car that combines small car gas economy and big car performance, visit your GM dealer today. Ask for a test-drive. And prove to yourself how practical it is to own a Torana 1900 — the great new way to drive — and save gas! i i i Torana 1900. The family man’s sports car. March 27, 1974 Page 3 What is the Board of Investments? lhe Board ot Investments, being the first government agency with both planning and implementing functions, is charged with the task of accelerating the economic development of the country by restructuring its industrial pattern. This is sought to be achieved by implementing three investment laws, namely: R.A. 5186 or the Investment Incentives Act, R.A. 6135 or the Export Incentives Act and R.A. 5455 or the Foreign Business Regulation Act. These acts were designed to improve the pace of industrialization, and aim to raise the living standards of the people through increased economic opportunities and a more equitable distribution of the benefits of development. Programs Thus, BO I formulates plans and programs shaped along a number of policies that reflect its desire to institute and maintain balance in the country's industrial pattern. Through a package of incentives, it encourages projects that will effect dispersal of industries among the rural areas, generate employment opportunities, promote labor-intensive manufactured goods for export, develop small and medium-scale industries and increase the utilization of indigenous raw materials. These policies are calculated to r bring about long-run benefits to the economy in the form of foreign exchange savings or earnings, increased export opportunities, progressive increases in domestic content, fuller utilization of existing facilities aqd development and improvement of management methods, technical know-how and marketing strategies. Incentives The Investment Incentives Act grants incentives to firms which undertake projects in declared preferred areas of investment. The Investment Priorities Plan (IPP) which is prepared annually by the Board, lists the preferred areas of economic activity considered essential to the development of the economy. Projects with high linkage effects are developed or expanded to lessen the gaps in the industrial structure. The law expressly welcomes and encourages foreign capital to establish pioneer enterprises which would utilize substantial amounts of domestic raw materials in joint venture with Filipino capital, whenever available. Exports The Export Incentives Act encourages the utilization of excess manufacturing capacities for export, particularly those that are labor-intensive. It also grants incentives to export trading houses which collect and export the products of fragmented and dispersed existing capacities. Similarly, service exporters like cargo transport, legal consultancy and motion pictures as well as facilities that cater primarily to foreign tourists are given support by the Board. Exportable products that are entitled to incentives are listed in the Annual Export Priorities Plan prepared by the Board. The third law, Foreign Business Regulation Act, covers the entry of foreign investments in the areas of business activity not listed in either the Investment Priorities Plan or the Export Priorities Plan. Through this, the BO I is able to channel foreign investments away from areas which are already adequately exploited by Filipino nationals into areas which will contribute to the sound and balanced development of the economy. RAUL L. LOCSIN ecrttor/publisher EXEQUlELS. MOLINA managing editor LETICIA M. LOCSIN associate editor ROSARIO HI LARIO features editor MERCEDITA C. OLPOC head, research staff Day BUSINESS DAY is published Monday through Friday by Enterprise Publications, Inc. with offices and plant at No. 113 West Ave., Q.C., Philip pines. Tels. 99-15-46 to 49 connecting all departments. All rights reserved. The con tents of this publication may be reproduced in whole or in part provided due credit is given. RE-ENTERED AS SECOND CLASS MAIL MATTER AT THE MANILA POST OFFICE ON APRIL 13, 1973. SUBSCRIPTION RATES: P75.00 one (1) year US $150’one year for all I P45.00 six (6) months subscriptions outside RP. -Page 4 Business Day March 27, 1974 Economies of_ Scale THE CASE FOR ASEAN REGIONAL COOPERATION By MIGUEL Z. PATOLOT VS $ millions at 1967 prices Estimates of production and apparent consumption of certain manufactures, 1967 Gross value of production (1) Exports (2) Imports of manufactures Import shares in total sales (%) (4) + (5) (6) (7) Domestic sales (1) - (2) (3) finished (4) intermediate products (5) Total sales of finished products (3) + (4) (6) Textiles Indonesia 119-7 0-5 119-2 881 10-8 207-3 47-8 Malaysia 16-7 4-8 11-9 38-2 4-9 501 861 Philippines 195-3 4-4 190-9 27-0 10-2 217-9 17-1 Singapore 2-7 4-3 -1-6 76-7 15-3 75-1 122-5 Thailand 151-2 5-1 146-1 750 13-6 221-1 40-3 ASEAN .. 485-6 191 466-5 305-0 54-8 771-5 46-6 Chemicals and chemical products Indonesia 69-3 36-5 32-8 24-9 30-7 57-7 96-4 Malaysia ............................ 126-8 59-3 67-5 47-6 28-9 115-1 66-5 Philippines ............................ 395-9 64-0 331-9 65-5 57-5 397-4 31-0 Singapore ............................ 38-1 19-0 19-1 47-7 16-3 66-8 95-8 Thailand ............................ 104-7 1-2 103-5 77-6 44-2 181-1 67-3 ASEAN............................ 734-8 180-0 554-8 263-3 177-6 818-1 53-9 Machinery, except electrical Indonesia ............................ 8-3 8-3 760 — 84-3 90-2 Malaysia ............................ 12-6 1-4 11-2 73-3 — 84-5 86-7 PhilippHes.......................... 22-8 01 22-7 262-7 — 285-4 92-0 c ’ 11-9 1-0 10-9 47-0 — 57-9 81-2 Tl-0 188 2 88-8 ‘ ^76-7 ; 1 Elect, icai machinery arid and supplies Indonesia .......................... 3-5 0-4 3-1 46-9 — 50-0 93-8 Malaysia ............................ 13-7 2-8 10-9 48-8 — 59-7 81-7 Philippines 78-0 — 78-0 59-3 — 137-3 43-2 Singapore 14-3 5-7 8-6 580 —» 66-6 87-1 Thailand ............................ 19-9 0-4 19-5 69-6 — 89-1 78-1 ASEAN .. -.. 129-4 9-3 120-1 282-6 — 402-7 70-2 Transport equipment Indonesia^ 22-0 0-5 21-5 55-2 8-5 76-7 83-1 Malaysia 25-0 0-2 24-8 47-1 21-9 71-9 96-0 Philippines ............................ 108-9 0-6 108-3 128-4 34-5 236-7 68-8 Singapore ............................ 31-4 120 19-4 17-4 15-6 36-8 89-7 Thailand ............................ 120-8 0-1 120-7 119-8 21-6 240-5 58-8 ASEAN............................ 308-1 13-4 294-7 367-9 102-1 662-6 70-9 DELGADO DROTHERS HOTEL CORPORATION a BO I-registered service exporter The Progressive Car Manufacturing Program Is only gng of the basic approaches towards the realization of an ASEAN industrial complement ation program. Other regional orient ed projects being deve loped by the Board under a local content formula are: appliances and apparatus, including tel ecommunications, rubber products, phar maceuticals, electric power generating and distributing equipment, qhemicals and petro chemicals, agricultural machinery, building materials, processed foodstuffs and dry cell batteries. The Board is current ly working on a Prog ressive Truck Manu facturing Program and a Progressive Electronic Manufacturing Program. Last year, the Board also launched the Progressive Motorcycle Manu facturing Program. All these three prog rams have their res pective regional linkages. The Board is working on the assumption that each of the other countries will contribute their share in setting up facil ities for the complete manufacture of trucks, motorcycles, r.nd elecEconomic se- se "It makes economic sense to establish within the region various indus trial plants which would be economically sized and internationally com petitive,” BO I Chairman Vicente T. Paterno said. If each of these plants were to serve the market requirements of two or more countries of the region, produc tion costs could be reasonably in line with international prices, in contrast to a plant which, even if serving the requirements of the largest of the individual markets, would have internationally uncom petitive costs of pro duction, Paterno pointed out. "There are enough items mentioned in the United Nations report (on the areas for eco nomic cooperation among the ASEAN countries) to form a regional shopping list of package deal projects," the BO I chairman said. These are: fertilizers, both nitrogenous and phosphatic; carbon black; caprolactam; DMT; ethylene glycol; soda ash; sheet glass, newsprint; sealed refri geration compressors; steel; small engines; and typewriters. Soda ash plant To underline the benefits that may be derived from this region ally cooperative form of industrialization, Paterno described how a region ally based soda ash plant can be worked out in order that Southeast Asia can be self-suffi cient in glass items: "The raw materials for soda ash manufac ture are principally salt and limestone. All of thSoutheast Asian coun tries have salt making capabilities and limes tone fa found in every one of the countries The process of mak;i ig soda ash is classic, was already essentia described in the text books of my elementary chemistry classes, which I attended in the late 1930's. "Since the raw mate rials are or could be available in every one of the countries in South east Asia, and the pro cess of manufacture is standard, why does no soda ash plant exist in the region? "The answer is found in the comparison of consumption in each of (Continued on page 6) 4th Floor, Manila Hilton Hotel Tels. 49-93-22 or U.N. Avenue cor. Orosa St. 40-60-11 loc 202 Ermita, Manila 203 US$MHIion at 1970 pricey ECONOMIES OF CAPITAL COST, RESULTING FROM REGIONAL PROJECTS Capital cost of regional 1980 Capital cost Capital cost group of na tional plants with same capacity in in 1980 Capital cost of regional project as percentage of cost of group of national projects with equal capaci ty % Nitrogenous fertilizers 220.0 245.2 Phosphatic fertilizers 22.9 30.0 76.3 Carbon black 10.2 19.3 52.9 Caprolactam 36.3 '53.2 68.2 D.M.T. 40.9 64.0 64.2 Ethyelne g\l Ethylene glycol 14.6 21.1 69.2 Soda ash 39.0 70.3 52.7 Sheet glass (a) 11.7 20.8 56.2 Newsprint (b) 142.7 200.2 71.3 Sealed Compressors 11.0 12.8 85.9 Small engines 13.9 21.9 63.5 Samll engines 13.9 21.9 Typewriters 22.0 34.8 63.2 Steel 135.4 170.6 80.0 Total 720.6 964.2 74.7 March 27, 1974 Business Day Pages mnnv Rosas mom iross... We’ve made a bid tor progress. We’re racing against time. Together as a nation, working for collective goals. As individual industries, setting specific targets to assume a national role. Within our participation in the PCMP and our involvement in the development of ancillary industries , we have blended our goals with the Filipino dream. Our Engine Plant is a single road in our long journey towards national progress. There will be many other roads — all leading to the same goal. As we travel our first miles, we pause to give due credit to all those who have inspired us, worked with us, to build our Engine Plant. To the national government for inspiring a new vision. To the Board of Investments for a more meaningful direction. To our Customers and friends for their continuing confidence. To our associates from Toyota for their technological assistance. To our engineers and workers for measuring up to the demands of the new technology. To the Filipino people for its capacity to prevail. And we shall prevail. A strong nation. A prosperous people. Within our individual spheres, we work our paths today. To meet in the morning of our true becoming many roads from now. TEAMWORKING with TECHNOLOGY DELTA MOTOR CORP REACH INC Page 6 March 27, 1974 Complementation more economical (Continued from page 4) the countries, compared with the annual output of a plant of minimum efficient size, as given in the UN study. The largest consumption of soda ash of any ASEAN country in 1970 was 44,000 tons and in 1980 would be 104,000 tons, whereas a plant of mini mum efficient size was estimated at 360,000 tons per year. On the other hand, total ASEAN consumption of soda ash in 1970 was 116,000 tons, estimated Because we care for your healthwe invested an additional P12 million to expand our facilities. With the completion of our P12 million expansion program, we have one of the most modern manufacturing facilities for the production of intravenous fluids and other pharmaceutical specialties in all Asia. The fact is, with our new and modern equipment, 95% of all Abbott medicines we market here will now be produced locally - assuring their easy availability at a much broader scale and at prices well within the reach of all. And just as we pioneered in the manufacture of I. V. fluids (we still are its main source in the Philippines), our enlarged laboratories will be pioneering in the production of new and better pharmaceuticals to protect and preserve your health better. True to our corporate slogan, "Health Care World Wide”, all the pharmaceutical specialties we make meet the highest standards of quality established for all of Abbott’s laboratories anywhere in the world. We have kept our commitments to you and all Filipinos by our expansion program. This, too reaffirms our faith in the economic stability and continuing development of our country. We look forward to serving a healthier Philippines. ABBOTT LABORATORIES (Philippines) 102 E. De los Santoe Ave., Mandaluyong, Rizal to rise to 310,000 tons by 1980, so that by 1982 total ASEAN con sumption would more than absorb the full out put of an economic sized plant in the region. "Such a regional plant would be able to produce soda ash under 1970 conditions at an estimated price providing an acceptable rate of return of capital of $50 per ton compared to a world price then of $56.50, CIF ASEAN port (also at 1970 freight rates). Delivered price to the other coun tries of the region would be higher to the extent of the freight cost from the plant to the other countries. Such a region al plant would have a capital cost of $39 mil lion, compared with an aggregate cost of $70 million if each of the countries were to build plants sized to the con sumption of their indi vidual markets. Each of the country plants would have a unit cost of production substan tially higher than that of the regional plant. The UN study estimates that the average unit cost of production in the coun try plants would be 65 per cent higher than the unit cost of production in the regional plant. "I believe that if this study were to be con ducted under 1973 con ditions, the economics of the . regional plants would be even more at tractive. Costs of manu facture of soda ash are even higher now in the industrial countries due in part to the much tighter standards being imposed on pollution and the consequently higher costs of manu facturing due to pollu tion control. Freights have also risen very subs tantially from the deve loped countries to Southeast Asia." UN view The BOI argument supports the UN view that Southeast Asia should, through various cooperative agreements, attempt to be self-suffi cient in major import items which it is in the best position to produce. The bulk of manu factures required by Southeast Asia continue to be imported and paid for in primary products. For chemicals and chem ical products alone, the Philippine dependence on imports of theseitems is as much as 6C per cent. Spiralling prices of semi-manufactures and capital equipments have recently created pressure** on the ASEAN countrie to produce more fo exports. So far, thi foreign exchange earn ings of Malaysia, the Philippines, Thailand, Singapore and Indonesi continue to depend on a relatively small number' of commodities. For instance, a UN^ survey noted that Indo-" nesia, Malaysia and Thai land each depend for substantially more than" half their export income on their three largest exports. The level of im ports that can be fin" anced will depend upon the extent of success iff developing new sourcesof, export earnings in the form of other primary products, of semi-manu factures and of finished manufacturers. Mote awareness This situation haf created further aware nesi* wfef the necessity F emblarking on an indu trial complementatio plan that will lessen th. impact of world prices on the already high in flation rate in the re gion. Chairman Paterno said that complement5 arity agreements are alsc another avenue for r( gional industrialization.’ "By complementarity, we mean the exchange of industrial products or components thereof among the different countries of the region;’ generally in the same industry sector," he said’ Paterno said that an example of complement arity can be found in the automotive industry.4 "Proposals have been presented to Malaysia Philippines and Thailand for the manufacture of various components of< automotive rear axles in each of the countries," he added. These components would be exchanged among the countries and the complete rear axles would be assembled from these components in each of the countries.^ "Thus the component manufactured in each country would be pro duced in a volume equal to the demand for rear axles in all the three countries, and each com ponent manufacturing* facility would enjoy advantages of scale greater than if sized for the individual market alone," he said. ft*arch 27, 1974 Business Day Page 7 INTRODUCING... THE LATEST ASIAN BUG. ___ minica n A LITTLE MORE SPORTY IN THE REAR. A LITTLE MORE RUGGED IN THE ENGINE. BUT STILLTHE SAME PRACTICAL COMPACT CAR. Practical car price. Minica F4 starts you off on the right track with its practical price tag: the lowest for a brand new car. And that's only the beginning. Practical turning radius. Try a tight turn. Buzz thru traffic. Park in leftover spaces. Easy does your sights on easy-to-read it with a 3.8 meter turning radius. Practical 4-cycle engine. Once you hit the highway, you’ll know how rugged the new 4-cycle engine is. Hard-driving as those in big cars. Water-cooled. Practical interior features. Pamper your back with the overstuffed foam padded seats. Set Practical sporty styling. Steal the show with the sporty swing-away back and sporty body. Feel extra-safe with the collapsible tying your pocket. door. steering column and 2-position safety Practical suspension system. Ride the rough roads in comfort. Fit in a family of five. Relax in Minica F4's surprising roominess. Minica F4's tough suspension system presto ! Van-sized cargo room. Fold down the rear seat and Practical gas consumption. Get 15-20 kms. to a liter. Perhaps even more. Minica F4's4-cycleengine stretches your mileage. Without emptakes the ump out of the bumps. Just like any compact or big car. Come, see and test drive the new Minica F4 at UNION MOTOR CORPORATION 3 Aurora Blvd., (in front of sta. Mesa Market) Quezon City • Tel. 61-54-81 to 84 FRANCHISED EXCLUSIVE DISTRIBUTOR No other compact takes so little and gives a lot. Minica F4, the latest Asian Bug. Truly the practical comPage 8 Business Day March 27, 1974 New guidelines for project studies The Board of Invest ments issued last week new guidelines for the preparation of project feasibility studies by applicants applying for tax incentives regis tration either under the Investment Incentives Act or the Export Incen tives Act. Following recent administrative decisions, 'the Board is also doing away with the project study requirement for existing and expansion projects to facilitate pro cessing of these applic ations. Instead a project report is required. Simplification The new guidelines are intended to simplify the project details re quired by the Board. The new format contains simplified cost, income, and operating state ments. However, a proponent is still required to make a detailed account of the technical, product and market aspects of the projects. As amend d, the new project gunlines are as by-products ^ .3 from the operations. _ esti’matei jiWz'X itJ annual volume 1. Give a brief sum- and value of domestic mary of major market, technical and financial characteristics of the project and conclusions regarding its feasibility. 2. Outline the time table and present posi tion of the project. 3. Specify proposed management for the pro ject, including type of business organization, organization chart and functions of each unit, use of professional firms or consultants, etc. 4. Outline the agree ments proposed or enter ed into with other parties which affect the operations of the pro ject (e.g. technical assist ance, foreign loans, patents, contracts of sales, etc.). Terms and conditions should be specified. Product and market aspects 1. Describe products to be produced, indi cating specifications rela ting to their physical, chemical and/or agro nomic properties, which ever applicable. Specify resulting and overseas sales of each product for the first ten years of the project's life. If total capital expenditures is below P1 million, and the project has a short gestation period, pro jections for only 5 years are required where 10 years projections are asked for. Specify the export markets, where applicable. Outline the assumptions underlying the projections. 3. Give the proposed selling prices of each product in both the local and overseas mar kets. Show basis for determining prices and extent of possible varia tions. 4. Outline the pro posed marketing arrange ment for the products, i. e. channels of distri bution, selling organ ization, etc. Indicate especially trade names to be use, long-term con tracts, guaranteed mar kets, importers contact ed in overseas markets and the status of these customers, affiliations with other companies or bodies for marketing purposes (local and over seas), terms of sales 'and sales schedule showing inventory levels. Technical aspects 1. Describe the processes and/or production methods, showing detail ed flow chart. ( Specify maintenance and other support facilities pro posed, and quality con trol and requirements for the processes adopt ed. 2. Specify major machinery and equip ment requirements. Indi cate: a. Number, specific ations, rated capa cities and life of major pieces of equipment, whe ther new or sec ond-hand, allo cated to categories according to major use (e.g. produc tion maintenance, waste disposal, etc.). Outline func tion to be per formed by each major unit. b. Quotations from suppliers, machine ry guarantees, deli very and payment terms and other arrangements. Indi cate also supplier, country or port of origin, taxes, duties, instali*t:o;i and for costs ances equipment, etc. State why import ed equipment and not locally pro duced equipment is used for each item, where applic able. c. Is equipment to be exclusively used for the'production of the products specified? If not, specify to what extent equipment will be used for other purposes. 3. Enclose plans and drawings of major struc tures, physical layout of site and plant and machinery layout, indi cating also provisions for expansion. Enclose cost quotations for land and major structures (includ ing contingencies land improvements and addi tional infrastructure) and allowances for minor structures. 4. Specify rated an nual and daily capacity of plant at a specified number of shifts per day and number of operating days per year. Give also the expected attainable annual production volume of each product of > Jw- for the first ten years minor the project's life. issued 5. Show volume and value of material inputs per unit output (and the respective wastage fac tors, if applicable) for each product to be sepa rating imports, locally purchased imports (e.g. from dealers) and locally produced inputs. Also: a. For locally pro duced material inputs and locally purchased imports, give delivered price at factory, or transfer price if produced by appli cant. b. For imported material inputs, give current CIF price, tariff, sales ., tax, other charges and delivered price at factory. c. Give details of prospective sources of major inputs, consignment ar- ' rangements, supply contracts etc. 6. Specify special re-" quirements and costs for electricity, water and other utilities. 7. Detail total labor requirements from start of operations until normal production capa city is attained. Also: (Continued on page 10) March 27, 1974 Business Day Page 9 PUMP IN SALT WATER ANYTIME U S E C O PADDY PUMPS Increase production of: e Eel 4 e Shrimpse Apahap e Bangus 3 models available . Own Useco through the "Assisted Purchase Price Plan". Ask a Fisherman's Cooperative, Rural Bank or ACA. Machinery A^Enginaarlng Division Atkins.Kroll & Co. Inc. ^CEBU>J DAVAO^iBACOLOD^ This ref has all the features you want in a ref... including some so new only GE has them. OPTICAL GIFT ITEMS METALCRAFT B U YERS Contact Louvered Condenser Panel. ♦ MetalLux INDUSTRIES Separate ice comer. Keeps ice cubes away from frozen food. Custom dispenser. So you don't have to open your ref to get a cold drink. Available only in the 12 cu.ft. model. Keeps current consumption low. Dial Defrost. Takes the mess and the fuss out of defrosting Won't rust, even when the paint cracks. You will find some of these things in other refs. You will find them all only in a GE ref. Available in 6, 8, 10, &12cu. ft. single-door and 10 & 12 cu. ft. 2- door models. At most appliance stores. <jxS><8xS> Truth Advertising GENERAL^ ELECTRIC z WORLD'S LARGEST MAKER OF APPLIANCES & LAMPS Page 10 Business Day March 27, 1974 New guidelines for project studies issued (Continued from page 8) a. Indicate number of workers according to skill, sex, and whether full time/ part time/seasonal, at normal produc tion capacity. b. Specify wage rates, salaries, fringe benefits, etc. as sumed. c. Justify foreign per Sell your rights. GET CITIFINANCE RECEIVABLES FINANCING With or without notice to your cus tomers. Almost any way you want it. Whether you're a manufacturer, producer, processor, distributor, or dealer. Big or small. Don't tie up working capital in receivables. Convert those rights into cash. So you can buy more inventory, raw materials or equip ment or implement projects or meet expenses. Get Citifinance Re ceivables Financing at any of our 18 offices nationwide. At the most liberal terms and reasonable rates available. You can't go wrong when you sell your rights to receivables. Or pledge the receivables to us. 'For you get the best prices and terms. You can sell us current recei vables. Or future receivables as you create them. Individually or in bat ches. With or without recourse. OUR SERVICES: Personal Finance (cars, appliances and household needs: educational, medical, travel, home improvements, weddings and other needs). Inventory Financing, Sales Financing, Receivables Financing. Leasing, Equipment Financing. Real Estate Financing. Small Business Financing. Agribusiness Financing. Funds Investments. Non-life Insurance. OUR OFFICES: Metro Manila: Makati. Cubao. Parafiaque, Caloocan, Marikina. Luzon: Naga, Legaspi. Batangas, Tarlac, Dagupan, San Fernando (L.U.) Visayas: Cebu. Bacolod. Iloilo. Mindanao: Davao. Cagayan_de Oro, General Santos, lligan. sonnel involved, if any. d. Set out details of special training programs, includ ing costs. Financial aspects 1. Specify sources selected or proposed for short-term financing, long-term financing, and suppliers credits, and their respective uses. Also indicate (if possi ble): a. Amount and terms of financing from each source select ed, indicating cur rency, security, repayment period, interest and other features. b. Status of financing from each source relating to actual releases already made, applications already approved, applications pend ing and applic ations still to be made. For equity financing, indicate subscriptions made. 2. Prepare two sets of the following statements, one set assuming no BO I incentives and one set assuming BOI incentives, for each of the first ten years of the project's life. For projects with capital expenditures below P1 million and of a short gestation period (and thus projecting for only five years), use alternative profitability evaluations - these are to be specified. Such pro ponents may wish how ever, to extend the cash flow period to ten years to enable discounting measures to be used; this is advised. a. Cost of sales and operating expen diture statements (see also Item E. 7) b. Profit and Loss (or Income) Statement c. Cash Flow State ment d. Balance Sheet Statement 3. The following financial evaluations are to be derived on the basis of the information contained in these state ments, both with BOI incentives and without BOI incentives. a. Profitability eval uation, calculating discounted rate of return on total in vestment, discount ed rate of return on capital stock and net present value. b. Profitability ratios, calculating gross operating profit ratio (net oper ating proit as a ratio of sales) and net profit after tax 3 ratio for each year and average, over the projected oper- . ating period. c. Solvency ratios, calculating debt to equity ratio and debt service cover age for each year. d. Break-even analy sis, calculating break-even price and capacity. Enclosures to be attached to study 1. Bio-data on prin cipal officers. 2. Certified copies of all export and domestic sales con tracts. 3. Certified copies of all parents, tech nical and manage ment agreements foreign loan con- ’ tracts and all other agreements pro posed or entered into with other parties. 4. Copies of quota tions for machine ry, structures, inputs, etc. 5. Clearances from proper authorities for waste disposal and emission con trol. 6. Relevant back ground data com piled for the pro ject study. 7. For applicants under R.A. 6135: a) Computation for tax credit on raw mate rials and sup plies. b) Computation of standard raw material usages. March 27.1974 Business Day Page 11 the symbol of vehicle quality at its finest Take any sign? The FMC sign, for instance. What does it mean to you? Meticulous product planning. Highest standards of technical proficiency. Rigid research and development. Unrelenting engineering excellence. Consistent quality control. Complete assembly line manufacturing. Unsurpassed vehicle performance ... INDEED. On the road, anywhere. Hurdling through tough, rugged terrain ... or coasting along smooth, even plain. Inevitably, a standout in its class... a leader in its trade... the FMC Sign... FRANCISCO MOTORS CORPORATION E3STEX EASTERN TEXTILE MILLS.INC. Cor. Sheridan and Pioneer Sts. Mandaluyong, Rizal, Philippines Cable Address: KASINTL MANILA Tel. Nos. 70-44-41 • 70-44-45 P. O. Box 625 - S. M.C.C. Makati, Rizal, Philippines KASTEN INTERNATIONAL, INC IMPORTERS EXPORTERS MANUFACTURERS NATIONAL DISTRIBUTORS : Automotive Industrial Publications : Handicrafts Furniture Shoes Food Products Wearing Apparel : Wearing Apparel Food Products : Consumer products Complete Philippine coverage with new trucks and warehouses Four (4) divisions: — Industrial — Garments — Consumer products — Publications Page 12 Business Day March 27, 1974 BULK OF EQUITY FOR BOI-LISTED PROJECTS INVESTED IN MINING SUBSCRIBED CAPITAL OF PROJECTS BY THE BOI, UNDER R.A. 5186 WITH FOREIGN EQUITY CLASSIFIED BY FIRM AND NATIONALITY OF INVESTORS January 1971 - December 1973 (In thousand pesos) FOREIGN SUBSCRIBED CAPITAL Date of Approval Total Filipino Total U.S. SPANISH CHINESE BRITISH JAPANESE Others Not Fbsident NonResident Resident NonResident Resident NonResident Resident NonResident Resident NonResident Resident GRAND TOTAL 871,249 534,620 336,629 202,101 854 37,088 11,388 2,674 2,250 - 31,614 31,408 AGRICULTURE 161,405 113,405 48,000 21,733 16,516 6,186 3,445 Tree farming 300 180 120 Provident Tree Farms, Inc. 10/71 300 180 120 Livestock and poultry 161,105 113,225 47,880 21,733 - 16,516 6,186 - - - - 3,445 San Miguel Corp. 11/71 161,105 113,225 47,88 21,733 - 16,516 6,186 - - - - 3,445 MINING 355,857 237,663 118,194 71,635 854 201 2,140 130 - 11,715 25,267 Iron ore 67,211 47,504 19,707 5,060 854 ____ 472 111 - - 6,958 - Inco Mining Corp. 3/72 6,644 6,406 238 238 — Phil. Iron Mines, Inc. 6/72 41,878 27,136 14,742 4,516 854 3,120 Anglo-Phil. Mining Co. 12/72 14,689 13,562 1,127 544 _ _ 472 111 _ _ _ _ Pellet Corp, of the Phil. 7/72 4,000 400 3,600 3,600 Copper ore 217.200 137,011 80,189 56,518 _ 201 1,668 19 . _ _ 4,757 17,026 Consolidated Mines, Inc 9/73 26,296 22,352 3,944 3,944 - 301 - - - - < Baguio Gold Mining Co , Inc 4/72 13,313 11,449 1,864 — - - — — 1,864 Ape- Exploratic 5/73 3,015 2,593 422 172 - 201 X* ■ ~ 19 - - - 30 T_. jj 'TujiqjC.o Corp. “ 7/72 • 10,114 8^427 1,687 - - . — . - - - — 1,687 PHtex -Mining Corp. >2/72 61,7211 45,248 16,473 3,518 — I - ^1,668 - - - 11,287 « Atlas Consolidated Mining < "r. . " Corp. 12/73 102,741 46,942 55,799 48,884 4,757 2,158 Nickel ore 71,446 53,148 18,298 10057 - - - - - - - 8,241 Marinduque Mining & Ind. Corp. 1/71 71,446 53,148 18,298 10,057 8,241 MANUFACTURING 353,987 183,552 170,435 108,733 20,371 3,062 2,544- 2,250 19,899 2,696 Food 24,354 19,361 4,993 2,582 - - - - 2,411 - - - - Republic Flour Mills, Inc. 3/71 24,354 19,361 4,993 2,582 - - - - 2,411 - - - - Wood products 206,430 82,609 123,821 101,207 20,371 - 1,301 - 133 - - - 809 Nasipit Lumber Co., Inc. 8/71 11,888 11,531 357 207 - - - - 108 — - 42 Insular Lumber, Inc. 12/71 10,500 2 10,498 10,498 — Mahogany Products, Inc. 2/71 1,808 191 1,617 1,592 - - - - 25 — — — — Picop 9/73 182,234 70,885 111,349 88,910 20,371 - 1,301 - - 767 Rubber products 800 560 240 - - 240 - - - - - - Phil. Belt Corp. 5/72 800 560 240 - - 240 - - - - ’ - - Vegetable oil 7,500 5,250 2,250 - - - - 2,250 - - - lligan Bay Mfg. Corp. 9/73 7,500 5,250 2,250 - - - - - 2,250 - - - Chemicals & Chemical products 75,045 52,328 22,717 - - 925 - - - 15,203 1,500 5,089 Filipinas Synthetic Fiber Corp. 5/72 33,008 19,805 13,203 13,203 - Phil. Petrochemical Products Inc. 6/72 7,115 5,616 1,500 _ - - - - - - 1,500 Indo Phil. Textile Mills, Inc. 11/73 8,222 4,933 3,289 - _ - Grand Imperial Textile Mills 6/73 3,700 2,775 925 925 — - — — — Inc. Phil. Cellophane Mfg., Inc. 3/73 18,000 16,200 1,800 - - - - - - Arrow Parts Mfg. Corp. 11/73 5,000 3,000 2,000 - _ - - - - - 2,000 - Non-metallic mineral products 6,370 5,863 507 - - - 427 - - - - 80 Pacific Enamel Mfg. Corp. 3/73 5,900 5,487 413 _ 413 _ _ _ - Visayan Glass Corp. 7/23 470 376 94 - - - 14 - - - 80 Metal products 12,000 7,200 4,800 _ Hooven Phil., Inc. 3/71 12,000 7,200 4,800 - - - - - - - - - Machinery except electricl machinery 2,250 1,350 900 - - - - - - - - - Radiowealth-Kirloskar Corp. 4/72 2,250 1,350 900 Electrical products 18,918 8,807 10,111 4,944 169 _ 4,600 307 Ever Electrical Corp. 2/73 1,300 1,014 286 _____ - - - 169 - - - - - 26 Engineering Equipment, Inc. 6/72 5,618 393 5,225 4,944 281 Delta Electric Motor Corp. 4/71 12,000 7,400 4,600 - - - - - - 4,600 Transport Equipment 320 224 96 _ _ _ _ - 96 _ Delsa Mfg. Corp. 12/72 320 224 96 96 - ~r March 27, 1974 Day Page 13 A significant amount of capital for Board of Investments-registered projects under the In vestments Priorities Plan went into mining activi ties. This is based on the January 1971 to Dec ember 1973 BOI data on subscribed capital of /Specified Non- Name of NonResident Resident Foreign 17,252 120 120 120 Swedish Match, Inc. (Swedish) 6^252 6,252 — Not available 6,252 AG & P, Wolff & Co., Kawasaki Steel Ltd. - Kawetsu Mining Co &' Kawasaki Steel Ltd. Not available 10,880 John Hoti Co., Ltd Teijin Co. Ltd. Toyo Menka Kaisha Ltd. 3,289 Eastern Spinning Ltd. (India) 1,800 Non available (Swiss) - Yasaki Co. Ltd. _4A°°_ 4,800 Alcoa Corp. (Australia) 900 900 Klrloskar Bros Ltd. ((India) __92 91 HoiSutloc (Portuguese) - Maidensha Electric Mfg. , Co., Ltd. Sakata Shokai, Ltd. projects with .foreign equity under the Invest ment Incentives Act. The bulk of this min ing capital is concentrat ed on the development and exploitation of cop per ore deposits. Not much capital has gone into iron ore develop ment. According to BOI data, a total of over P871 million have been subscribed in BOI-registered corporations be tween January 1971 and December 1973 by do mestic and foreign invest ors. Of this total, P355 million went into mining activities, P353 million into manufacturing and P161 million into agri culture. Of the P355 million capital in the mining sec tor, P217 million or 61.12 per’ cent was the capital subscribed in copper ore companies. Copper producers The BOI lists six com panies it has registered as copper ore producers. These are: Consolidated Mines, Inc., Baguio Gold Mining Co., Inc., Apex Exploration, Inc., West ern Minolco Corporation, Philex Mining Corp oration, and Atlas Con solidated Mining Corp oration. Of these firms, Atlas outranks the rest with a subscribed capital of over P102 million or 47.00 per cent of the total capital subscribed in copper ore companies. According to BOI data, foreign participa tion is also significant in the mining sector with foreign nationals subscri bing by as much as P118 million in these mining ventures. This is 35.11 per cent of the total P336 million capital sub scribed by foreign invest ors in BOI-reg istered projects between Jan uary 1971 and Dec ember 1973. Again, the bulk of the subscribed capital of P118 million went into the copper ore com panies. The BOI data show that the foreign in vestors have subscribed a total of P80 million in these firms with Atlas gaining a greater share amounting to P55 mil lion. Commitments The Board's continued support for the copper sector is a result of its program to locally smelt and refine copper ores. Because of the long-term commitments of local mining companies to supply copper ore ab road, there is a project ed deficiency of supply for the proposed copper smelters. The country's copper output in 1971 was 197,573 metric tons, about 23 per cent higher than in 1970. Product ion of copper, because of favorable prices, has been growing at an an nual average rate of 13 per cent since 1961. In the absence of local pro cessing plants, the entire country's copper ore output is exported. Manufacturing Total subscribed capi tal in the field of man ufacturing is significant. It amounts to a total of, P353 million with foreigners contributing P170 million. Prominent under this category is food processing, where a significant amount of venture capital has been invested. Anybody can tend you money. But at PDCP, you'll have the professional expertise and experience behind it. Most financial institutions would probably just hand over the money to you. And leave you to your fate in the business jungle. It would be easier on us if we'd just do the same. But simply lending you money isn't enough assurance that your venture is going to succeed. This is why we giye you a lot more help other than just the financial kind. There's help in the form of PDCP's profess ional knowhow. Its expertise in evaluating the viability of your proposal. And this is backed by more than a decade of involvement in a wide ranging scope of industries. We care fully discuss your proposal with you because there's nothing like perfect planning. We see to it that you don't over-invest or under-invest' by designing the most suitable financing plan. If you're just a shade unsure of your prospects, we can clear up your doubts and apprehensions. We have Project Teams that are available for direct consultation and assistance. Anything discussed will be kept just between you and us. When we do finally grant you the loan, you can be certain that PDCP had put a lot of thought into your venture. It's viable. And it's going to be profitable. If you're in need of financial assistance as well as PDCP's kind of professional knowhow to go with it, write us for detailed information. Better still, drop by our offices. PRIVATE DEVELOPmrnT CORPORATlOn OF THE PHlUPPinES JVibadoncj Kprporasyon sa Pagpapaunlad ng fUtpinas PDCP Bldg. Ayala Avenue, Makati, Rizal Tel. 88 89-91 • Cable Address: PRIDECOP. Manila The log phase-out pro gram, on the other hand, has much to do with the increased investment in wood processing facili ties. Between January 1971 and December 1973, some P206 million has been subscribed by investors in Nasipit Lum ber Co., Insular Lumber, Mahogany Products and Paper Industries Corpor ation, four of the wood processing firms with sig nificant foreign equity participation. Of this to tal subscribed capital, 88.34 per cent or P182 million was subscribed in PICOP. The foreign participa tion amounts to P123 million with P111 mil lion going to PICOP's to tal capital base. Chemicals Chemicals and chem ical products is one area that has attracted subs and Long-Term Credits • Small Business Term Loans • Equity Capital • Project Development < and Technical Advisory Services tantive capital in the last few years. Between Jan uary 1971 and Dec ember 1973, a total of P75 million has been subscribed in five BOIregistered companies. Of this amount P33 million went to Filipinas Synthetic Fiber Corpor ation and P18 million to the Philippine Cello phane Manufacturing, Inc. The foreign capital participation in this sect or totals P22 million while the local equity contribution isover P52 million. Agriculture In the field of agricul ture, two firms — Pro vident Tree Farms, Inc. and San Miguel's live stock and poultry oper ations — are listed with significant foreign equity components. According to the Board data, a total of P161 million in capital has been subscribed in BO I-registered firms of which P48 million is the foreign sector's 1 contri bution. San Miguel, a highlydiversified food com pany, has a total sub scribed capital of P161 million for its livestock and poultry projects. Foreign equity amounts to over P47 million ac cording to BOI statistics. On the foreign sub scribed capital segment, foreign residents are con tributing significantly to the subscribed capital of BOI-registered pro jects. US residents have put in P202 million; Spanish, P37 million; Chinese, P11 million; British P2.6 million. The bulk of non-resident equity part icipation comes.from the Japanese side, totalling P31.6 million. Page 14 Day March 27. 1974 Industrial priorities to be reset this year This year will see an other re-shaping of industrial priorities. The fuel crisis has in fluenced much of the new decision of the Board of Investments with respect to econo mic areas to be included in the Investment Incen tives Act and the Export Incentives Act. In its current discuss ions, the Board is work ing out a program that will strive for a balance between domestic suffi ciency and the export goals. While productivity GENBANCOR The only investment house k- with 22 nationwide branches. To bring investment opportunities to people where they live, where they work, where their money is. GENBANCOR's 23 branches provide the provincial public with ready access to the services of a sound, stable investment house. Project proposals of local the economy. more accurately in their respective ports the government's efforts towards a more equitable distribution of the With its network of branches, GENBANCOR gives ybu nationwide connections. GENBANCOR offers you international connections, as well. It has established partnerships with National and Grindlays Bank, Ltd., a British bank with worldwide .operations; and two of Japan's largest commercial banks - Tokai Bank Ltd., and Kyowa Bank Ltd. Link up with GENBANCOR and we'll put you right through to any point in the country. And the world. We have the Services You Need. * Securities Dealership * Financial Planning and Consultancy * Portfolio Management * Underwriting * Lending and Intermediation 126 AMORSOLO ST., LEGASPI VILLAGE, MAKATI TEL. NOS: 86-40-80 TO 89 • 88-26-11 TO 15 (MONEY MARKET) is a must objective, the volume of output must be enough to sustain domestic demand first before any excess is shifted to foreign mar kets. In addition to existing variables (labor intensity and export contri bution), the BOI has added the fuel intensity criterion in evaluating projects and areas pro posed for inclusion in either of the two plans. The Board believes that while power is an im portant element in pro duction, it should be one of the factors when considering economic areas that consume ex traordinarily large amounts of fuel. Employment The Board currently believes that the empha sis must be in developing areas that create as much employment as possible with the mini mum use of both capital and power. Foreign investments are likewise being given a greater share of res ponsibility in developing the export sector. This year, the Board will give more consideration to the establishment of new export facilities that are in a position to sell be tween 50 and 70 per cent of the plant output abroad. Like the Investment Priorities Plan, export projects should give a minimum utilization of imported components and will undertake a greater degree of proces sing of local raw ma terials. The natural-based industries will be given priority consideration as against import depend ent industries. In the past few weeks, the Board has been con ducting detailed hearings on the areas being pro posed by the private sec tor for inclusion in both the Investment Priorities Plan and the Export Priorities Plan. (Both plans are detailed listings of economic areas guaranteed tax incent ives by the Board). Proposals Fiberboard, stripped abaca fiber, arrowroot starch, particle board and feed grains are being proposed under the IPP under the agro-industries section. Grape growing, castor bean growing and processing, bamboo shoot growing and pro cessing are proposed under the agro-industries section of the EPP. Continuous casting mill to produce copper wire rods, gas cock valve, oxygen and acety lene cylinders, auto motive parts such as mufflers, radiators, tail pipes, leaf springs, auto motive brake drums, motorcycle components (sprocket, chain cable, rim, spokes and nipples), air cdmpressors sizes (1/4 - 15 HP), graphite electrodes, electrical wiring devices and plate mill are also proposed, on the . metals side of the IPP. Under the section of the EPP, aircraft rehabil itation and modification facilities are being sug gested. Chemicals On the chemical side, soda ash, sheet and glass products are being consi dered for inclusion in the IPP. Methanol formeldehyde, nicotine, sul phate, and rubber pro phylactics are being pro posed in the EPP. There are 17 areas currently listed under chemicals of the Sixth IPP. The Board is now reviewing the situation of these industries with res pect to the BOI's new industrial guidelines. The BOI, however, as sures that projects that have been registered will continue to be support ed. As in previous years and as a means to inten sify production, the fields of forest develop ment, crop production, food processing, live stock and fishing, mine ral and non-mineral pro duct production will fur ther be encouraged by the Board. Directions In addition, thedirections spelled out for BOI is to pinpoint areas that would have significant emphasis on the develop ment of rural small and medium-scale industries particularly labor-inten sive projects which in volve substantial proces sing of indigenous raw materials. According to the Board, its sector dev elopment programs will be formulated so as to provide an inter-linkage of these industries with the large-scale enterprises through various sub-con tracting arrangements. A significant feature in this sub-contracting scheme is the transfer of techno logical, management and financial assistance from the large-scale to the small-scale projects. Guidelines In the planning pro cess, the Board will also take into serious consi deration location of in dustrial plants in relation to fuel costs. In this re gard, the Board has is sued broad guidelines on industry locations some of which are as follows: (1) Firms seeking BOI registration are required to establish new meat processing capacities near sources of hogs or near meat producing areas; (2) The Board re quires that grain proces sing centrals (rice) should be located in re gions with corresponding storage capacities; (3) Manufacture of cel lophane must be located close to the Northern Luzon copper smelter in order to make the Cost of sulphuric acid as low as possible and in an area in which it is eco nomically accessible to sites suitable to tree farming; (4) Agricultural lime production activities should be situated out side Greater Manila in suitable locations and capacities to serve farm needs economically; (5) The Investment Priorities Plan specifies the condition that the establishment of coconut oil mills be distributed among coconut produ cing regions in propor tion to copra supply; (6) Applicant export producers of electronic products or goods are re quired to locate either at the electronics park of the Greater Manila Ter minal Food Market or at the Export Processing Zone in Mariveles, Bata an; (7) Firms wishing to engage in the man ufacture of feed yeast must locate in sugar-cane producing regions. The fuel factor is now part of the rules locating industries under the Board's regional dispersal program. March 27. 1974 Page 15 lHEPHILIPPinE$l$nOW PROoucinG nEwjpRinr WE ARE PROUD TO BE A PART OF THE DEVELOPMENT OF THE ECONOMY AS ENVISIONED BY THE PHILIPPINE GOVERNMENT THROUGH THE BOARD OF INVESTMENTS LVyoI 1r_yi Saves precious foreign exchange. Assures a local supply of newsprint. Creates more job opportunities. Increases government revenues. Utilizes wood materials that are presently considered waste. WESTERN MINOLCO CORPORATION 2310 PASONG TAMO EXTENSION, MAKATI, RIZAL PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES A. SORIANO CORPORATION Head Office: 6th Floor, J.M.T. Bldg., Miiisno. - Ayala Ava.. Makati, Rizal y F Bisiig, INDUSTRIAL TECHNOLOGISTS, INC. /. WE OFFER THESE SERVICES TO INDUSTRY A. CATHOLIC PROTECTION B. TANK ERECTION C. PIPELINE INSTALLATION D. SANDBLASTING E. SPECIALIZED PROTECTIVE COATINGS & PAINTING F. STEEL CONSTRUCTION G. CHEMICAL CLEANING //. WE ALSO REPRESENT A. WILSON WALTON OF AUSTRALIA WITH BRANCHES ALL OVER THE WORLD-SPECIALIZING IN CATHODIC PROTECTION B. CARBOLINE CO. OF U.S.A. - SPECIALIZED COATINGS - WITH BRANCHES IN MAJOR COUNTRIES & CITIES OF THE WORLD ///. FOR YOUR SERVICE AND MATERIAL NEEDS.... PLEASE CONTACT US many ways to serve the needs of a growing Philippines. RUST AN PULP AND PAPER MILLS INC. RUSTAN MANUFACTURING CORPORATION Page 16 Day March 27,1974 Energy crisis turns attention to coal mining The Board of Invest ments is giving priority attention this year to applicants intending to develop the country's coal deposits. Coal mining is a non pioneer area of invest ments now under the Sixth Investment Prior ities Plan with a mea sured capacity of 2,400,000 metric tons. As shown in the Bureau of Mines reports from 1963 to 1972, coal production dropped from 156,535 metric tons to 37,942 metric tons or a decrease of 76 per cent during the past nine years. The drop in the use of coal is attributed to the increasing depend ency of industry on petroleum and its by-products. Alternate source BOI believes that with the growing cost of acquiring oil from abroad, the country can benefit by utilizing coal as another energy source. Coal is primarily consumed- by .merit ■ompanie-, electric power plants and found ries. At one time loco motives, launches, steam ships, barges and the Manila Electric Company used coal to produce pow*:*. /side from ther mal plants and cement kilns, other possible users of coals are sugar centrals, carbon reduc tant manufacturers, grain driers, lumber kiln-driers and tobacco flue-curers. Coal users The BOI based its 2,400,000 demand for coal by 1976 in accord ance with the usage of coal by the following firms: (1) Coal-fired thermal plants of the National Power Corporation: Li loan, Cebu - 132,000 metric tons; Batan Island, Albay, 230,000 metric ons; Sipalay, Negros Occidental, 60,000 metric tons; and Bislig, Surigao, 125,000 metric tons. 2) Atlas Consolidated Mining and Development Corporation (six boilers at the Sangi Power Plant), 252,000 metric tons. (3) Visayan Electric. Company, 72,000 metric" tons. (4) Universal Cement Corporation, 43,000 metric tons. (5) Apo Cement Corporation, 6,000 metric tons. (6) Sugar centrals, 1,500,000. Less output expert coal drillers and experienced mine fore men. (4) Lack of capital. The BOI said that capital has not been easy to attract because the coal mining business has been considered an expensive and risky busi ness. (5) Lack of cheap means of transport. According to the Board, the lack of trans portation and shipping facilities and the high cost involved in the movement of coal from the mines to the consumers present add itional problems. (Continued on page 18) Last year, the coun try produced a total of 39,118 tons of coal, 28.16 per cent less than that produced in 1971. The BOI says, the down ward trend of pro duction and con sumption for the past 10 years makes it imprac tical to project demand based on past apparent demand. However, at the end of December, 1971, the total estimated coal reserves of the Philip pi n e s were about 1 25,230,383 metric tons. According to the Bureau of Mines, the grade or analysis of Phil ippine coal ranges from 8,390 to 14,650 BTU. The study of the National Power Corpor ation states that the quality of coal in the Philippines is suitable for fuel for most industries even without beneficia tion. Low-grade Philip pine coal is said to be eaj;, blendad witty high-— er-grade varieties for maximum utilization. At the end of 1972, there were 11 reported coal producing mines in the country. Nine of these are in Cebu. Observations The Board noted that despite its vast coal resources, the country continues to be depend ent on imported oil for industry's fuel require ments. A review of the industry by the Board resulted in the following industry observations: (1) Lack of developed market. According to the Board, there is a great potential for coal although potential users prefer to use oil and other fuels because of the unsteady supply of coal and its compar atively high price. (2) Poor mining con ditions. The existing coal mines are small and operation is intermittent. According to the BOI, mining methods used are crude. Due to the lack of facilities, mining is suspended during the rainy season. (3) Lack of trained technical men. There is noted a con tinuous lack of coal mining engineers like Exhibit I PHILIPPINE COAL DEPOSITS (As of December 31,1972) Location Owned and/or Operated Estimated Reserve (MT) Heating Value (BTU) Status Remarks Albay Rapu-Rapu, Batan Is. 16,693,000 8,680-12,300 Not operating Explored 2,000,000 NA Prospect Explored Rapu-Rapu,sBatan Is. Corp.) 2,585,000 8,500-12,300 Not Operating Explored Antique Semirara Is., Caluya 2,277,000 8,390-12,410 Not operating Explored Semirara Is., Caluya 9,982,742 (Positive) NA NA NA 2,349,219 (Probable) NA NA NA Semirara Is., Unong 4,654,988 (Positive) NA Not Operating Explored 2,172,722 (Probable) NA NA NA 3,500,000 Prospect Explored Catanduanes Hitoma, Carmoran 30,000 12,800-13,200 NA NA Htoma, Manambag 581,000 13,040-15,010 Not Operating Explored 993,200 Bit., Not operating Explored Coking 13,000-15,000 Panganiban Region 750,000 11,280-14,650 Not operating Explored Panganiban, Ermitano 180,893 (Proved) 212,126 (Probable) Payo Region 410,519 Medium Volatile 11,000-14,000 Non-operational NA Cebu Argao, Dalaguete 8,515,000 12,340-14,490 Qjerating Explored Northern Camansi Danao City 13,671,000 13,800 Operating Explored (Aznar Enterprises) Danao City —£a»postela, 55,162 10,505-11,780 Operating Explored Ckrmen (Durano & Co.) Danao City — Cahumay — 11,979,000 10,080-10,250 Producing Explored humayan (Atty. Ramon Durano) Danao City — Barrios of Mantija, Camansi, Kapilyahan (Aznar Mining Dev. Corp/ 18,000 10,500 Operating Explored ) 34,600 9,400-11,600 Operating Explored Naga, Alpaco (Bernardo Ciriaco) Naga, Toledo City 120,000 9,500-10,340 Operating Explored (Base Coal Mines) 184,887 9,870 12,290 Operating & Producing Explored Toledo City 38,000 11,598 Operating Geological Uling Mindoro Oriental 774,000 8,887-12,610 Operating Geological Bulalacao Misamis Oriental 4,014,000 8,390-12,040 Not-operating Explored Manticao (Ma. Cristina Chem. 13,000 Lignite to Operating Explored Industries) Sub-bit, for carbide manufacture Negros Occidental Calatrava — Taboso 3,398,000 8,760-12,580 Not operating Geological Calatrava — San Carlos 32,000 NA Not operating Explored Calatrava — Bagonbon 146,704 (Positive) Sub-bit. Coal Not Operating Explored 372,851 (Probable) NA NA NA Calatrava — Macasiloc 8,000 8,500-10,000 NA NA Quezon Polillo Is., Burdeous Polillo Is., Burdeous 2,295,000 10,060-12,790 Notoperating Geological (Commonwealth Ceramic 12,165 Sub-bit., Hi-Heating Not operation NA Corp.) Value Polillo Is., Burdeous Sorsogon 430,000 11,000-13,000 NA NA Gatbo 112,000 10,269 Not operating Geological Surigao del Sur Bislig-Lingag Zamboanga del Sur 4,582,000 11,010-14,260 Operating Geological Nalangas (CETOC) 16,805,000 12,270-13,900 Operating Explored Nalangas, ButongDeplahan Kabasalan, Siay 6,221,805 NA Prospect NA (Gov’t. Reservation) 1,500,000 High Volat. To Low Volat. Bit., 11,123-13,680 Leyte Villaba, Balete San Vicente (Luzon Stevedoring Co.,) 525,000 3 — 6% bitumen NA NA Total 125,230,383 MT SOURCE : BUREAU OF MINES. March 27, 1974 Day Page 17 How 1. ,trade 1 helps make the world whole Nothing breaks down the barriers that divide peoples and nations like good, healthy, mutually beneficial trad ing relationships. Nissho-lwai has been pro moting such trade on a global scale for years. Buying and selling practically every product you could mention practically everywhere under the sun. But buying and selling is only part of the picture. We're also active in creating oppor tunities for long-term barrier-breaking. By forging dynamic, new partnerships in many lines of business in as many parts of the world. Already we're involved in more than 50 such joint ventures. Projects like stain less steel manufacturing in Spain, copper SCOVERY TOYS & GAMES Comes into your home to make your children's world mining in Zaire, ferti lizer manufacturing in Thailand, and petro chemical manufacturing in Brazil. If you're thinking of branching out, ex panding, diversifying, perhaps our global outlook, trading expertise, and joint-venture experience make us a possible partner. Or if you simply want new markets for your products or new products for your market, give us a call. One way or another, let s get together, grow together, and help make it one world. <$>NiSSHO-IWAI Magbalik- anyo with A Division of MONDRAGON INDUSTRIES, INC. Tai Ping Rugs and Carpets cover the best places. 5k PHILIPPINE CARPET MANUFACTUR|NG CoRp kumLo Showroom: Maranaw, Makati —s Commercial Center Tel: 892360. 887945 f Business Day March 27, 1974 COAL MINING TABLES OF NATIONALIZATION LAWS AND THEIR REQUIREMENTS (Continued from page 16) The Board believes that a plant with an annual capacity of 56,100 tons is of econ omical size. With BOI incentives, total cost of this plant i^, around P1.5 million with P790,822 going into the purchase of ’machineries and equipment. Revenues at P65.00 per metric tons can reach P3,650,400 per annum. Net profit after tax is estimated at P439,086. According to the Bureau of Mines, RapuRapu, Batan Island in Albayhas a total estimat ed coal reserve of 18,693,000 metric tons; Northern Camansi, Cebu, 13,671,000 metric tons, and Carmen, Danao City, 11,979,000 metric tons. Other rich deposits of coal are found in Antique, Catanduanes, Nalangas, Zamboanga del Sur (16,805,000 metric tons), and Negros Occi dental. Many of these coal mines, although explored, are not operat ing. LEGAL PROVISIONS SUBJECT MATTER REQUIREMENTS NATURAL PERSONS JURIDICAL PERSONS BANKING 1. Rep. Act. No. 337 as amended by P.D. No. 71 (General Banking Act) 2. Rep. Act No. 4093 as amended by P.D. 119 (Private Development Bankers' Act) 3. Rep. Act No. 720 as amended by RA Nos. 1097; 5939 and P.D. 122 (Rural Banks’ Act) Regulating the establishment and operation of banking Institutions. Regulating the establishment of private development banks. Regulating the establishment and operation of rural banks. Seventy* per cent of voting stock of the Institution must be owned by Filipino citizens, except new banks established by consolidation of branches or agencies of foreign banks In the Phils. Two-thirds of the members of the board of directors must be Filipino citizens. Seventy* per cent of voting stock of the institution must be owned by Filipino citizens, except new banks established by consolidation of branches or agencies of foreign banks In the Phils. Two-thirds of the members of the board of directors must be Filipino citizens. Capital stock must be ioo% owned and held by Filipino citizens. All members of the board of directors must be Filipino LIVING UP TO A NAME: w Our name. It means the top. The summit. It motivates us to achieve management exccllcGCv1 in our opent-ions. It symbolizes too management's youth and expertise in mineral exploration, mining and ore-dressing technology. And because living up to our name is enough incentive, we are proud to share in the government's efforts to create new jobs for Filipinos, generate foreign currency for our country and produce copper and gold to serve society. Apex Exploration and Mining Co., Inc. ORTIGAS BLDG ORTIGAS AVENUE. PASIG. RIZAL BOARD OF DIRECTORS: FERNANDO A. MUNIZ Chairman IGNACIO R. ORTIGAS MARTIN C. PORTER GEORGE T. SCHOLEY VICTOR G. PUYAT ERNESTO B. RUFINO, JR. EDWARD CONRAD GEESLIN GUILLERMO C. GASTROCK PABLO M. CAPISTRANO VICENTE G. PUYAT CALIXTO Y. LAUREANO Members 4. Rep. Act No. 3779 as amended by RA 4378, Sec. 4 (b) Capital structure of savings and loan association Sixty per cent of the capital stock must be owned by citizens of the Philippines. 5. Rep. Act No. 4860 Sec. 3, as amended by RA 6142 CIVIL AERONAUTICS 1. Sec. 5. Art. XIV, Const, of the Phil. 2. Republic Act No. 776 COCONUT INDUSTRY Rep. Act No. 1369 COOPERATIVES 1. Com. Act No. 565; RA 2023 FINANCING COMPANIES Rep. Act 5980 FISHING AND OTHER* AQUATIC RIGHTS 1. Sec. 20, Public Act No. 4003 (Fisheries Act) 2. sec. 22, Public Act No. 4003, as amended by CA No. 471 3. Secs. 24 and 32, Public Act No. 4003 4. Sec. 25, Public Act No. 4003 as amended by CA No. 471. Re-lendlng by gov't, financial Institutions to private sector of foreign loans obtained by these Institutions. Grant of franchise, certificate, autho> izatlon for the operation of a public utility. Issuance of permit to engage In domestic air commerce and/or air transportation. Granting of loans to finance establishment of coconut centrals Organization of cooperative associations. Regulating the establishment and operation of financing companies. Issuance of license to operate vessels to catch fish In territorial waters of the Philippines: transfer or assignment of right. Issuance of license as fisherman to work on vessel engaged In commercial fishing. Issuance of license to take marine mollusca; transfer or assignment of right. Issuance of license for operation of pearling or shell-collecting boat; transfer of assignment of right. 5. Sec. 27, Public Act No. 4003, Issuance of shell-driver's as amended by CA No. 471. license to take marine mollusca or shell thereof. 6. Secs. 39 & 44 Public Act No. 4003 Granting of concession to fish for, collect or gather sponges In territorial waters of the Philippines: transfer or assignment of right; Issuance of special permit. Limited to Filipino citizens. At least 70% of the outstanding and paid-up capital of corporation or partnership must be held by Filipinos until loan Is fully paid. Grantee must be Filipino citizen. Grantee must be Filipino citizen. Grantee must be Filipino citizen. A cooperative association maybe formed by 15 or more persons who are citizens of the Phil, or the U.S. or of both, residing In Licensee must be citizen of the Phil, or the united States or of any other country granting similar right to Filipino cltlzensi transferee or assignee must have qualifications as licensee. Licensee must be citizen of the Phil, or the U3. br of any other country granting similar right to Filipino citizens. Licensee must be citizen or the Phil, or the U.S. or of any other country granting similar right to Filipino citizens, transferee or assignee must have qualifications Same as provided for In Sec. 24, Public Act. No. 4003, supra. ibid. ibid. Grantee must have at least 60 per cent Filipino capital. Grantee must have at least 60% Filipino capital. Grantee must be or association Filipino capital. a corporation with majority Any corporation or association with at least 61 per cent Filipino or American capital may organize a cooperative association. 60 % of the capital stock should be owned by citizens of the Philippines and must have a paid-up capital of at least P500.000; 2/3 of the members of the board of directors of the corp, must be Filipino citizens; if the managrng partners must be Filipino. Licensee must have at least 61 per cent Filipino or American capital; transferee or assignee must have qualifications as licensee. Not applicable. Licensee must have at least 61 per cent Filipino or American capital; transferee or assignee of stock must have qualifications as licensee. Same as provided for In Sec. 24, Public Act No. 4003, supra. ibid ibid March 27, 1974 Business Day Page 19 Secs. 52 & 55, Public Aoi No. 4003 Issuance of license to take hawksblll turtle; transfer or assignment of right; Issuance of special permit. ibid. ibid BOI defines rules on ownership ratio a. Sec. 63, Public Act No. 4003, as amended by C.A. 471. Issuance of fishpond and fishery permit or lease agreement within forest lands. Same as provided for In Sec. 1, Public Act No. 3674, lupra. Same as provided for In Sec. 1, Public Act No. 3674. supra. 9. Sec. 67, Public Act No. 4003, as amended by C.A. 471. Granting of exclusive privilege by municipal councils to erect fish corrals, or operate fishponds, or take or catch "bangus” fry, or fry or other species for propagation; transfer or assignment of right. Grantee must be Filipino citizen. Grantee must have at least 61 per cent Filipino capital. 10.Sec. 74, Public Act No. 4003 Authorizing the sale of any land or portion thereof, owned by reserved for or occupied by Sale or exchange limited to Filipino and American citizens. any fishery farm, experimental station or fishery project for exchange thereof with any site Sale or exchange limited to corporations or associations with at least 61 per cent Filipino or American capital. x private ownership. GEOTHERMAL ENERGY Rep. Act No. 5092 Granting of permits and/or leases for exploration, tapping and utilization of geothermal Leasee or permittee must be Leasee or permittee must have at least 60 per cent Filipino capital. GOVERNMENT CONTRACTS 1. Public Act 4239 Awarding of contracts for the construction of public works. Awardee must be citizen of the Phil, or the U.S. or of any other country granting similar rights to Filipino or American citizens. Awardee must have at least 70 per cent Filipino or American capital. 2. Rep. Act No. 5183, Sec. 4 Awarding of contracts for the supply to, or procurement by, any government-owned or Limited to Filipino citizens. controlled corporation of Sixty per cent of the capital stock must be owned by Filipino citizens. commodities. 3. Com. Act No. 138 (Flag Law) Regulating the purchase of equipment and supplies for government offices and entitles; giving preference to articles produced In the Philippines or In the US. Preference In award of blds given to Filipino or American citizens. Preference In awards of blds given to corps, or commercial companies with at least 75 per cent Filipino or American capital. 4. Com. Act No. 541 Preference In awarding of contracts for the construction or repairs of public works, and building and structure for national defense. Preference given to Filipino or American citizens In award of blds for construction or repair of public works If lowest domestic bld Is not In excess of 15 per cent of lowest foreign bld; no foreign bld allowed for construction or repair of building or structures for national defense. Preference given to corps, or commercial cos. with at least 75 per cent Filipino or American capital In award of blds for construction or repair of public works If lowest domestic bld Is not in excess of 15 per cent of lowest foreign bld; no foreign bld allowed for construction or repair of bldgs, or structure for national defense. GOVERNMENT OBLIGATIONS - Rep. Act No. 504 (Back Pay Law) as amended by RA No. Application of backpay certificates to payment of obligations. Certificates can be applied In payment to Filipino citizens Certificates can be applied In payment only to corps, or associations with at least 60 per cent Filipino capital. INVESTMENT COMPANIES Rep. Act No. 2629 Sec. 15 INVESTMENT HOUSES P.D. 129 (The Investment Houses Law) Regulation of Investment companies. Regulation of Investment houses All directors must be citizens of the Philippines. MARKET STALLS Rep. Act No. 37 Majority of voting stock must be owned by Filipinos. Majority of members of the Board must be Filipino citizen Preference In the lease of market stalls. Filipino citizens given preference. No Provision. MINERALS ANO MINERAL LANDS/ NATURAL RESOURCES 1. Sec. 9, Art., Xlv, Const, of the Phil. Disposition, exploitation, development exploration, or utilization of any of the natural resources of the Phil. Filipino citizens At least 60% of the Capital stock must be owned by Filipino 2. Public Act No. 2719 (Coal Land Act), as amended by RA No. 740 Lease of unreserved and unappropriated coal-bearing Leasee must be Filipino citizen. Leasee must have at least 60% Filipino capital. 3. Com. Act No. 137 (Mining Act), as amended by CA No. 309, and RA NOS. 225 & Disposition, exploitation development or utilization of minerals and mineral lands of the public domain. Limited to Filipino citizens. Limited to corporations or associations with at least 60% Filipino capital. 4. Rep. Act No. 387 (Petroleum Act of 1949( OTHER PUBLIC SERVICE Exploration, development, exploitation, or utilization of petroleum resources; assignment or transfer right thereto; preference in employment concessions. Concessionaire or transferee .must be Filipino citizen. Concessionaire or transferee must have at least 60% Filipino capital. Sec. 5, Art. the Phil. xlv. Const, of Sec. 7(1), Art. XV, Const, of Ownership the Phil. Mass media. operation of Limited to Filipino citizens. Must be wholly-owned and manged by Filipino citizens. Governing body of any entlry telecommunications shall controlled by citizens of Phil. be Sec. 8(7) Article XV, Const, of the Phil. Operation of Institutions other established by mission boards organizations educational religious orders, and charitable Issuance of certificates of public convenience and necessity. Limited to Filipino citizens 60% of Its capital must be owned by such citizens. Control and administration must be limited to citizens of the Philippines. Grantee must be Filipino or American citizen. Grantee must have at least 50 per cent Filipino or capital. American (Continued on page 20) The accompanying table of nationalization laws has been prepared by the Board of Investments as a basic guideline for fo reign investors who are not aware of the existing regulations concerning ownership of Philippine companies and industrial properties. Recent foreign invest ment liberalization measures are intended to support the intentions of the Investment Incentives Act and the Export In centives Act. Both Acts provide for special treat ment of foreign capital in prescribed areas of invest ment for a specified period of time. New rules Some of these new regulations are as fol lows: (1) Pioneer areas One of the conditions in allowing foreignowned or controlled firms in pioneer areas of investment is that the foreign enterprise ob ligates itself to accept Filipino investments sub sequently and that within 20 years (extendable for another 20 years only in certain areas), it per cent controlled by Fili pinos. The recent amend ment requires attainment of filipino control within 30 years or within 40 years, if the enterprise is engaged primarily (at least 70 per cent) in the exportation of registered products, which period is extendible for another 10 years by BOI. (2) Complementation arrangements In addition to the Constitutional provision limiting to 60 per cent Filipino-owned firms, the exploitation of natural resources and engaging in public utilities, there are other statutes requiring ownership by Filipino stockholders of all or the major portion of the equity in certain trades, etc. The BOI, subject to the approval of the National Economic Deve lopment Authority, is now empowered to suspend such requiremnt (except in areas covered by the Constitutional prohibition) in big multi national projects pur suant to international complementation ar rangements for the man ufacture of a particular product on a regional basis. Under this amend ment, foreign investors may consider the Philip pines as the base for serving the Southeast Asian market in cases of complementation schemes without being subjected to the various statutes limiting owner ship of the majority of the stockholdings to Fili pinos in case the par ticular activity is subject to such limitation. Export firms (3) Foreign export firms. Foreign-owned or controlled firm engaged or proposing to engage in the production of ''export products'' in tended primarily for foreign markers are now qualified to apply for registration with BOI and avail of incentives, the principal ones being: a. Tax credit on im ported materials and sup plies equivalent to the amount of duties and compensating taxes paid; b. Tax exemption on inported capital equip ment or tax credit on taxes that would other wise be paid if the domestic capital equip ment was imported, for new capacity designated as intrisically exportoriented or for additional capacity deemed neces sary to meet export orders; c. Deduction for tax able income of undHtributed pjofits used for"1 expansion reinvestment; d. Carry-over of net operating loss as a de duction from taxable in come; e. Accelerated depre ciation; f Additional dedui n fram taxable in corn; o. an amount equivalent to 50 per cent of training expenses in curred; g. Exemption from all internal revenue taxes except income taxes if the project is a pioneer undertaking; h. Exemption from ex port tax, impost or fee. (4) Tourism incentives A new addition to the Export Incentives Act is the grant of incentives to tourism ventures. Among beneficiaries of such in centives would be fo reign-owned or con trolled service exporters engaged in the business of primarily catering to foreign tourists and tra velers. Incentives avail able to such service ex porters for the first 5 years from registration are: a. Reduced income tax, i.e., the enterprise may deduct from its taxable income an amount equivalent to 50 per cent of its total export fees during the year in which the in centive is claimed; and b. Tax and duty-free importation of capital equipment directly and actually needed by such service exporter. fyge 20 Bueinsaa Day March 27. 1974 Regional dispersal beneficial to labor The regional dispersal of industries program of the Board of Invest ments has so far benefitted Southern Tagalog Northeastern Mindanao. The rest of Philippine provinces or regions have not attracted enough industries to enable them to sustain the high migratory flow of labor. The Southern Tagalog area (Batangas, Cavite, Laguna, Oriental Min doro, Palawan, Quezon, Rizal) attracted a total of P548.5 million invest ment between July, 1968 and December, 1972. This was 22.85 per cent of the P2.4 billion committed to implement Board-regis tered projects during this period. From January to December, 1973, BOI data show that a total of P 141.0 million have already been committed to Southern Tagalog pro jects. The province of Batangas, out of this total, has a share of P47.8 million, Rizal, P53.6 million and Laguna, P32.2 million. Bigger share Investment commit ment from July 1968 to December, 1972 is even bigger in Northeastern PAINTS ELIZALDE & CO., INC. MABUHAY VINYL CORPORATION For the past 120 years, Elizalde has continuously served the nation. Today, more than ever, it is fully aware of its role as one of the nation's pillars for progress. Through its varied industries, it benefits millions of Filipinos, provides them a better way of life. Through its humanitarian efforts, civic and sports activities, it has given hope to many. In the far reaches of the islands, Elizalde is there to extend help and know- how, giving the Filipino a better outlook on life. Today and the coming generations. He is the new hero. Because he builds. As you do. A nation. Proud of its heritage. Proud of its accomplishments. Confident of its future. And now. Under a new order. He is recognized. And he reaps its reward. As you do. A share in the profits of capital. Due compensation for honest labor. Under a New Society. And of yourself. He is the new hero. His, is the courage to serve without fanfare. Without drama. BE PROUD OF HIM! March 27, 1974 Business Dey Page 21 Mindanao. Of the P2.4 billion total investment project cost, Northeastern Mindanao (Agusan, Bukidnon, Lanao del Norte, Lanao del Sur, Misamis Orien tal, Surigao del Norte, and Surigao del Sur) got a significant P1.5 billion investment share or 62.5 per cent of P2.4 billion While Southern Luzon is considered attractive for agro-based industries, Northeastern Mindanao is favored as a site for wood processing facilities because of its high timber output. Surigao del Norte alone has attracted as much as P1.0 billion in invest ment between July, 1968 and December, 1972. Lanao del Norte accounts for over P229 million private invest ment in the area. However, the same situation does not hold true for other regions or provinces. Despite grow ing control on the part of the Board to regulate the siting of manufactur ing facilities, marketing and raw material con siderations play an important part in project locations. Cagayan Valley (Caga yan and Isabela) attract ed P2.7 million only in investments; Eastern Visjayas (Leyte and Samar) cirew P8.4 million; Western Minda nao (Zamboanga del Sur and Sulu), P15.1 million. Limited flow When compared to the volume of invest ments committed to both Southern Tagalog and Northeastern Minda nao, the capital flow to these following regions continues to be small: I locos (Mountain Pro vince, La Union, Pangasinan), P54.7 million; Central Luzon (Bataan, Bulacan, Zambales), P56.3 million; Bicol (Albay, Camarines Norte, Camarines Sur, Masbate), P50.7 million; Western Visayas (Capiz, Negros Occidental, Iloilo), P39.5 million; Central Visayas (Cebu, Negros Oriental), P31.6 million; and Southern Mindanao (Cotabato, Davao), P65.8 million. At the end of Decem ber, 1972, there were a total of 102 plants sited or being sited by BOIregistered proponents in Central Luzon. Of this total, 78 manufacturing facilities are in Rizal. Between January to December 1973, an add itional 22 plants are to be sited in Central Luzon out of a total of 51 plants approved. Of the 22, 17 are to be loc ated in Rizal. Between July, 1968 (Continued on page 22) 8. com. Act No. 452, u amended by RA 1252 Granting of leases and permlti for paitura lands. Leasee or permittee must be citizens of the Phil. Leasee or permittee must at least 60% Filipino capital. RETAIL TRADE 1. Rep. Act No. 1180 (Retail Trade Nationalization Law.) Regulation of retail trade business. Privilege granted only to Filipino citizens effective May 15, 1954. Allens engaged In the retail business prior to May 15, 1954 may continue to do so until death or voluntary retirement of license or forfeiture of his Privilege grantee only to organizations with 100% Filipino capital. Allen organizations engaged In the retail business prior to May 15, 1954, may continue to do so until the expiration of their term but not beyond June 19, 1964. 2. Rep. Act No. 1292 Granting and underwriting of credit facilities for the operation of retail business. Grantee must be Filipino citizen who Is a bona-fide retailer. No provision. RICE 8, CORN 1. R.A. No. 3018, as amended Regulation of the rice and Filipino citizens by P.T). 194 corn Industry. 2. Sec. 1172, Ch. 30 (Customs Law), Public Act No. 271, (Rev. Adm. Code); Sec. 806, RA 1937 Issuance of certificate of Philippine register to vessels of domestic ownership for coastwise trade. Note: This function has been transferred to the Philippine Coastguard under RA 1573. Grantee must be Filipino or American citizen residing In the Phil. 3. Sec. 1176 1/4 foe cit. 4. Sec. 1202 toe cit. 100% Flllplno-owned corporations. However, aliens can engage In this business upon authority from NGA with a Flllplnlzatlon requirement of 60% within a period to be determined by the NGA. Only Filipino banks may be designated by the Rice and Corn Administration In which money for the payment of palays, rice •nd corn may be deposited. Grantee must have at least 75 per cent Filipino or American capital. The president and managing directors must be citizens of the Philippines. Issuance of license fo> exclusively for pleasure. ■ yachts Licensee must be Filipino or American citizens. No provision. Limiting number of personnel on board engaged In coastwise trad: foreign Officers and crew must be Filipino or American citizens. Not applicable. lConiif.iieltvnpage-22) IMPERIAL TEXTILE MILLS. INC. KM. 21 MACARTHUR HI-WAY MARILAO, BULACAN, PHILIPPINES MANILA LIAISON OFFICE: 2ND FLOOR NAREBEL BLDG. 917 JUAN LUNA STREET MANILA, PHILIPPINES TELEPHONES: 20-26-18 21-86-76 26-37-30 Page 22 Business Day March 27,1974 (Continued from page 21) 5. Sec. 1212 loc cit. Issuance of bay and river Owner of vessel must be Filipino or American citizen. Owner of vessel must have at least 70 per cent Filipino or American capital. 6. Com. Act No. 606 (Charter Party Law) as amended by RA No. 913 Sale, lease, charter or transfer of vessels and shipping facilities owned In whole or In part by a citizen of the Philippines or by a corporation organized under Philippine laws. Vendee, lessee or transferee must be citizen of the Philippines or United States or of any other country not at war with the Philippines. Vendee, lessee, or transferee must have at least 75 per cent Filipino or American capital. 7. Sec. 2, RA No. 1187 (Philippine Overseas Shipping Act), as amended by RA Nos. 4146; 5963 Exemption from payment pf taxes on Income derived from overseas shipping business and Overseas service. Owner, operator or constructor must be Filipino citizen. Owner, operator or constructor must have at least 60% per cent Filipino capital. Grantee must have at least 60 % per cent Filipino capital. 8. Sec. 3, loc cit. Grant of loans to finance Grantee must be Filipino citizen, acquisition and operation of oceangoing vessels. Vendee must have at least 60% per cent Filipino capital. Regional dispersal beneficial to labor 9. Sec. 7, Loc cit. Sale of vessels mortgaged to the Government. Vefidee must be Filipino citizen. The vessels must be owned by citizens of the Philippines or corporations or associations at least 5% of the capital stock Is owned by Filipinos. 10. Sec. 806 as amended, of the Tariff and Customs Code of the Phil. Registration of vessels to be used in coast-wise trade* TIMBERLAND AND FOREST PRODUCTS 1. Secs. 9 & 11, Art. XIV, Const of the Phil. 2. Public Act No. 2590 Issuance of permit to hunt and collect protected wild life. Permittee may be see Opinion of theP Sec. No provision. Justice, dated April 20, 1948 restricting Issuance of permit to Filipino citizens. * The Monetary Board with approval of the Pres, may reduce the required ownership to 60%. * Pres. Decree No. 43 (Nov. 9, 1972) provides for 60% Filipino equity In a buslne-. relating to the fishing Industry. Although there Is no express repeal of the following provisions, It seems a reasonable presumption that tne 61% Is now reduced to 60%. . engaged n-coast-wise trade per decision of the Supreme Court In the case of Commissioner of Customs Vs. r Borres, et. al.,.G.R. No. L-12->87, November 28, 1959. ’ (Continued from page 21) and December, 1973, Northeastern Mindanao would have sited 37 plants, of which 10 are in Misamis Oriental. The small number of plants to be located in this area is compensated by the value of the machineries to be installed here. Investment in machinery and equipment of pro ponents in this area is expected to total $246.4 million at the end of December, 1972. Employment generation The number of per sons to be employed in Southern Tagalog and Northeastern Mindanao will naturally be greater than other areas in the country. According to BOI data, there would have been some 48,468 persons to be directly benefitted by BOI pro jects at the end of 1973. Out of this total, 19,976 persons or 41.2 per cent will be absorbed by Cen tral Luzon while 10,001 or 20.6 per cent of the total will be employed in Northeastern Min danao plants. Some 14,478 will be employed in Rizal Province alone and 3,201 in Surigao del Norte. At the end of Decem ber, 1972, oniy~ six plants were located in uppc A BOI-registered, preferred, non-pioneer enterprise manufacturing MULTIWALL KRATT PAPER FOR PACKAGING • SUGAR • FLOUR • FERTILIZER • CEMENT • ANIMAL FEEDS • MEAT, FISH, POULTRY & FROZEN FOODS • AND HUNDREDS OF OTHER PRODUCTS For more detailed information, write or call; United Pulp and Paper Company, Inc. 3OO Bank of P.l. Bldg., Ayala Ave.. Makati, Rizal LVfTrM Tel. S9-97-31 to 09-97-36 MATLING INDUSTRIAL AND COMMERCIAL CORPORATION 8th Floor, Building 1515, Roxas Boulevard Ermita, Manila Philippines CALL 50-96-76 to 78 AGRICULTURAL PRODUCTS: CASSAVA STRACH, COPRA, CACAO, CATTLE March 27, 1974 Business Dey Page 23the I locos area benefitting only 1,483 persons. Cagayan Valley has only two BOI registered plants creating job employment for only 527 persons. While there are 12 plants sited in Central Visayas, 10 of these are in Cebu. Despite this number, ■these plants should only be absorbing 1,522 per sons. In payroll terms, more people are being benefitted in Southern Taga, log and Northeastern Mindanao. The projects in Southern Tagalog would have created an annual payroll of P66.5 million by the end of 1973. Northeastern Min danao's payroll based on projects located here total P52.3 million. Payroll In Southern Tagalog alone, Rizal province tops the payroll list with P36.4 million annually. Surigao del Norte in Northeastern Mindanao comes second with an annual payroll of P22.0 million. Between July, 1968 and December, 1972, the dollar portion committed to implement these priority projects cost over $600 million of which $594 million consist of purchases of .machinery and equip ment. Latest figures *how that between January and December, 1973, $69.1 million are fresh addition to the dollar segment as a result of registration and approval of new pro jects. Of this, $68.2 million were to go into purchases of capital equip ment. By region Northeast ern Mindanao will get most of these equipment ,valued at over P246 million. Southern — log comes close $243 million. By province, Rizal outranks the rest with more than $101 million worth of equipment or 41.56 per cent of the total investments in machineries. Tagawith INVESTMENT GENERATION OF BOI-REGISTERED PROJECTS BY REGION July 1968 - December 1973 TOTAL INVESTMENT INVESTMENT IN MACHINERY & EQUIPMENT July 1968 - December 1972 January — December 1973 July 1968 - December 1972 January - December 1973 Peso Portion Dollar Portion Peso Portion Dollar Portion Peso Portion Dollar Portion Peso Portion Dollar Portion Region (P000) ($000) (P000) ($000) (P000) ($000) (P000) ($000) TOTAL 2,403,473 600,770 328,294 69,120 112,661 594,482 17,682 68,907 Region 1: 1 locos 54,747 17,686 93,832 13,953 6,558 17,686 13,953 Mountain Province 48,876 13,786 25,594 3,807 6,558 13,786 3,807 La Union 5,871 1,151 68,238 10,146 1,151 10,146 Pangasinan 2,749 - - 2,749 - - Region 11: Cagayan Valley 2,726 3,173 689 3,173 Cagayan 892 1,367 523 1,367 Isabela 1,834 1,806 - - 166 1,806 Region III: Central Luzon 56,338 27,389 5,500 27,362 Bataan 18,397 3,663 555 3,663 Bulacan 33,915 22,408 - - 3,415 22,381 - - Zam bales 4,026 1,318 - - 1,530 1,318 - - Fbgion IV: Southern Tagalog 548,503 245,466 141,098 33,895 40,283 243,159 4,599 33,895 Batangas 115,906 80,206 47,817 7,430 80,206 300 7,430 Cavite 53,964 20,266 - - 49 20,266 - - Laguna 45,638 27,963 32,271 11,114 874 27,963 582 11,114 Or. Mindoro 12,329 1,348 - , — 223 1,348 - — Palawan 4,284 1,510 - — 1,385 1,510 - — Quezon 32,047 9,982 7,398 1,410 7,867 9,982 221 1,410 Rizal 284,335 104,191 53,612 13,941 29,885 101,884 3,496 13,941 Region V: Bicol 50,704 9,071 - - 1,500 9,071 - - Albay 6,354 326 - - 11,500 326 - - Camarines Norte 2,707 2,158 — - - 2,158 - - Camarines Sur 41,348 6,500 - - — 6,500 — - Masbate 295 87 - - 87 - - Region VI: Western Visayas 39,559 11,123 2,461 446 160 11,-123 3,479 446 Capiz 902 166 50 166 Negros Occ. 20,256 4,352 2,461 446 110 4,352 3,479 446 Iloilo 18,401 4 6,605 6,605 ■ - - Region VII: Central Visayas 31,602 18,213 16,391 1,780 16,018 18,213 495 1,780 Cebu 23,625 6,511 16,391 1,780 8,041 6,511 495 1,780 Negros Oriental 7,977 11,702 - 7,977 11,702 - - Region VIII: Eastern Visayas 8,441 3,083 10,259 3,174 1,840 3,083 J,724 3,174 Leyte 5,594 1,326 1,736 849 1,840 1,326 1,250 849 Samar 2,847 1,757 8,523 2,325 - 1,757 474 2,325 Region IX: Western Mindanao 15,188 1,820 1,267 338 9,895 1,820 338 Zamboanga del Sur 2,856 1,820 1,267 338 63 1,820 338 Sulu 12,332 - - 9,832 - - Region X: Northeastern Mindanao 1,529,798 250,401 30,772 8,235 16,114 246,447 3,57 8,022 Agusan 10,604 7,212 4,704 3,193 774 7,212 - 3,193 Bukidnon 71,686 59,192 - - - 59,192 - - Lanao del Norte 229,955 73,033 26,068 5,042 8,357 73,033 3,570 4',829 Lanao del Sur 1,080 157 - - 180 157 - • - Misami^ Oriental 22,198 2,743 - - 4,905 2,743 - - Surigao del Norte 1,092,041 62,545 - ’ - 442 58,591 - - Surigao del Sur 102,234 45,519 - - 1,456 45,519 — Ftegion XI: Southern Mindanao 65,867 13,345 32,214 7,299 14,104 13,345 3,775 7,299 Cotabato 40,599 8,646 14,110 2,442 10,986 8,646 930 2,442 Davao 25,268 ■ 4,699 18,104 4,857 3,118 4,699 2,845 4,857 Page 2 Business Day March 27, 1974 SIGNIFICANT AMENDMENTS IN THE RULES AND REGULATIONS IMPLEMENTING THE INTENT AND PROVISIONS OF R.A. 5186 B. Section 3(h) “IF Applicant Is a Proposed Corporatlort'fPage 6) (New) In lieu of the requirements In (e), (f), (g) hereinabove, appli cant shall submit proof of financial capacity by majority stock holders entitled to vote. I. Rule I, Definitions and Basic Guidelines A. Section l(p) “Tax Credits” (page 3) Old Rule - Credits against Internal revenue taxes only B. Section 1 (r) “Start of Operations" (page 3) Old Rule - New Rule - when the enterprise begins when the ent Its production for commer- tlon of the re clal purposes commercial p New Rule — Credits against Internal revenue taxes and customs duties Section 3(1) "Submission of Contracts" (page 6) (New) such as Joint venture agreements, licensing patents, trademarks and technological assistance agreements, existing or proposed. Section 5, “Incomplete Papers” (page 6) A. Section 2(b) Capital Gains Tax Exemption (ownership and hold ing period) (Page 8) 5-year ownership and holding period, counted from date of act ual payment for new issues; ends on date of actual sale or disposition regardless of date of entry In corporate books Old Rule - applicant shall submit defi ciencies within 30 calendar days from receipt of notice by the Board within 30 days after filing of ap plications, the Board notifies the applicant of the deficiencies and the latter has 30 days from receipt of notice to comply; date of com pliance shall be date of official acceptance VII. Additional Incentives to Philippine Nationals Investing In a Pioneer Enterprise (page 9) A. Section 2(b), Investment for Tax Allowance Purposes Old Rule - may be voting or non-vot ing stocks of one or more pioneer enterprise New Rule — voting issues, voting or VIII. Incentives to Registered Enterprises (page 10) C. Section l(x) “Direct Labor Wage Cost” (page 3) New Rule — compensation (l.e., salaries, wages, payments, such as bonuses, living allowances which are part of the employee's taxable earn ings), for labor directly used in the production process including services of the foreman. It excludes labor for maintenance of production machinery and equipment. E. Section 6, “Publication of Appllactlon” (page 6) (New) once in a newspaper of general circuldtion at applicant s expense, after the Boardhas given due course for final evaluation of the application. A. Section 1 Who can avail Old Rule (Rule IX, Sec. 1) No provision D. Section (ly) "Local Raw Materials” (page 4) New Rule — Indigenous raw materials and seml-flnlshed products, (l.e,, with local content equal to or greater than 50% of manufacturing cost), directly and actually used in the manufacture/processing of the registered product that is completely finished and forming part thereof; excludes packaging and containers necessary to put the product In exportable form. IV. Rule IV, Board Action (page 7) A. Section 3, “Notice of Approval and Publication Qd Rule - (Rule VI, Sec. 1(c) New Ruleapplicant had only 20 days to accept the registration terms and conditions The Board shall publicly announce approved appllcaapplicant now have 30 days to accept the terms and conditions New Rule — U.S. owned/controlled corpor ations registered In non-ploneer, non-llberallzed areas cannot avail of tax incentives; Tax credits and accelerated de preciation for this purpose are not tax incentives Notlce of approval shall be published In a newspaper at applicant’s expense B. Section 3 Accelerated Depreciation (page 10) New Rule — acceleration refers only to the undepreciated cost of the fixed of registration may refer to fixed assets acquired before but not yet fully depreciated on date E. Section (lz) “Total Export Revenue” (page 4) (New) sum of all export sales of the registered product that Is complete ly finished and exported by the registered enterprise F. “Liberalized Areas" (page 4) (New) non pioneer areas which measured capacity, after 3 years of list ing In the plans have not yet been filled by Philippine nationals V. Rule V, Certificate of Registration (page 7) A. Section 1 “Conditions Precedent for Issuance of Certificate" Old Rule - New Rule — II. Rule II, Qualifications of Applicants (page 4) Old Rule (Rule III) - Nw Rule - U.S. owned/controlled corpora- U.S. owned/controlled corpora tions entitled to registration un- tlons, to be entitled for reglstrader same conditions prescribed tlon, shall submit proof ofrecipfor Philippine owned/controlled rocity; continued registration corporations; the former cannot after July 3, 1974 shall be subavail of tax Incentives under the ject to the resolutory effects of Act the Laurel-Langley Agreement Payment of registration fee compliance with the re quirement of Sec. 22(b) on the Issuance of two types of voting shares 3. sworn statement on all Information and data submitted resolution of applicant's Board of Directors accept ing the terms and condlcondition post-registration 5. compliance with pre-registration requirements 6. sworn certificate that appli cant Is not in arrears In the payment of obligations - proof of publication of III. Rule 111, Section 3 Supporting Documents A. Section 3(a), Copies of the Project Study (page 5) Old Rule — (Rule IV, Sec. 3(a) New Rule — applicant firm shall submit applicant firm shall submit 4 co10 copies to the Board pies to the Board Ing and approval VI. Rule VI "Incentives to Investors" (page 8) Old Rule — New Rule — No provision can be availed of only for invest ments made after registration C. Section 4, Net Operating Loss Carry-Over (page 10) Old Rule — New Rule — the 10-year period prescribed the 10-year period prescribed therein shall be from date the therein shall be from date the enenterprlse commenced oper- terprlse commenced commercial atlon even before its BOI operation of the registered activregistration ity irrespective of date of regisD. Section 5 Tax Credit for Withholding Tax on Interest (page 10) Old Rule - the Joan agreement and doc uments evidencing the regis tration of the foreign loan with the Board and Central Bank shall be sufficient basis for the BIR to issue tax credit certificates The BOI shall issue tax credit certi ficates upon proof that: 1. the enterprise assumes liability for payment of tax due from lender-remittee; no tax credit is enjoyed by the lender-remittee and for this purpose the following require ments shall apply: ATLAS COPCO a. where lender-remittee’s country has a law provldfor tax credit — (1) the enterprise must pres ent a duly authenticated ruling that lender-remit tee is disqualified due to its legal personality, (2) the enterprise must pres ent a duly authenticated certification of an Inde pendent auditor that lender-remittee has no taxable income; Keeping up the fight against noise and pollution Atlas Copco has stepped up researches into manufacturing equipment which could remedy, prevent and stop environmental pollution. We took the lead in designing a range of com pressed air products suitable for controlling noise and machine vibration, restoring “dead" lakes and preventing dust and oil pollution. To us, social responsibility is to the world and to you. That’s why we will always work for a cleaner, quieter and pollution-free environ ment to make this world a better place to live in. JltLas Copco COMPRESSED AIR CENTER ATLAS COPCO (PHILIPPINES) INC. b. Where lender-remittee's country has no Income tax . law a duly authenticated - certification of such fact must be submitted Section 6 Deduction for Labor Training (page 11) (new) requirements: submission of a labor training program proprlate agency or the BOI; approved by the ap2. prior Board approval for avallment of such deduction; 3. submission to the Board of a quarterly or semi-annual report of the training program IX. Rule IX Importation of Capital Equipment A. Section 3, Spare Parts (page 12) Old Rule (Appendix A, Sec. 3) New Rule — restricted to one set for the same as the old rule, but in genspecific machinery or equip- eral. the cost shall not exceed ment authorized to be Import-10% of the cost equipment where ed they will be used. B. Section 4, Conditions for Importation of Capital Equipment (page 12) Old Rule prior Board approval — before purchase order is New Rule — In addition to those mentioned In the old rule, the following conditions are Imposed: 1. Exclusive use or partial use (If registered activity does not fully utilize It but must not become the principal mode of utilization) I 2. International bidding or can- > passing (to ensure reasonable prices) except: total Importation less ufacturer; Importation Is caused the enterprise’s expan sion and equipment shall be acquired from the same supplier of the existing equipment; d. the Board has other means In determining the price C. Section 5, Validity of Authority to Import (page 13) (new) C/A valid for one year from date of Issuance D. Section 8, Post Approval Conditions (page 14) new) submission of official import documents which shall be used by the Board as basis for the issuance of a certificate of release from customs custody E. Section II, Prior Approval of Sale or Disposition of Equipment (page 15) Old Rule - (Appendix A, Sec. New Rule - 13) Prior Board approval Is necessary the enterprise shall notify the If transfer or disposition Is wlthBoard of the disposition or In five years from date of acquitransfer within 10 days from sition In order to exempt the date thereof, If said transfer transferor from the penalty of or disposition Is within five paying twice the amount of years from release by customs taxes waived If without Board prior approval, It shall notify the Board of such dlsposltlonland suffer the pevalld grounds for Board approval of the transfer: (a) sale to another registered en(b) proven technological ob solescence; (c) replacement to Improve and/ or expand registered operMarch 27. 1974 Businas* Osy Rule X. Purchase of Domestic Capital Equipment (page IS) New Rule 1. Domestic manufacturer — one whose product carries a "value added" and local content” at least equal to a prescribed percentage of the manufacturing cost. Giant Service. Service Giant. "value added” — defined as Including Indigenous raw materials, direct labor, fac tory overhead expenses, and depreciation but ex cludes profit of the dom estic manufacturer; value added must be at least 20% of production cost. value added —difference between manufacturing cost (which Includes raw mater ials, labor depreciation and factory overhead) and the value of raw material pur chases; value added must be at least 20% of manufactur ing cost (may be progress ively Increased by the Board as warranted by technolo gical advances and other "local content” means the difference between the man ufacturing cost (Includes raw materials, labor factory over head but excludes depreciamaterlal Importations; local content for equipment and spare parts where tariff Is 20% or less, local content shall be at least 20% of man ufacturing cost (may be pro gressively Increased by the Board); where tariff duties are higher than 20% — higher local content shall be prescribed by the Board; for computing local content, a component part Is consi dered locally manufactured even with the use of Imported raw material — If "local congreater than 50% of man ufacturing cost. Rule XI. Employment of Foreign Nationals No Changes Rule XII. Expansion Reinvestment Allowance (page 18) Old Rule 1. No provision because It Is expressly provided by law. 2. No express provision 3. No provision New Rule 1. Prior Board approval—for both expansion project and the act of reinvestment but approval and registration of a project shall not be deemed approval of an ex pansion plan made in the project study. 2. Expansion must result In an Increase In production capa city or any forward or back ward Integration approved by the Board; Thus mere "modernization" not deemed an expansion. 3. Epxanslon; when deemed affected — PROCESS OPERATORS PHILS., INC. a) Date of Reinvestment — deemed to have been made on the date the Issue of stock dividends has been duly approved by the stockholders c) for equipment previously authorized by the Board under Sec. 7(a), l.e. Tax Exemption on Importation of Capital Equipment, and Sec. 7(e), l.e. Tax Credit on Domestic Capital Equip ment, and Sec. 7(e), l.e. Tax Credit on Domestic Capital Equipment, or for civil works — upon actual Installation of capital equip ment or completion of ! 4. Earned surplus may come from registered operations 5. Date of Reinvestment — reca) date of approval by stock holders of declaration of stock dividends, If no fuspeclfled; b) the specified, future date of Issue unless Irrevocable transfer of a fixed amount of undistributed profit or earned surplus to capital account has been duly re corded in the books of re gistered enterprise prior to the actual Issue in whlcn case, the date of reinvestirrevocable book transfer; 6. Reduction of Capital Stock Reduction of capital stock takes place a) when there Is a formal decrease of subscribed capital stock; c) where stock dividends have been declared subject to approval of a pending Increase In the authorized capital stock, reinvestment date shall be the date of effectlvlty of approval by the SEC of such Increase. (page 19) b) when registered enterprise duclng said effect, such as purchase of its outstand ing stocks or the grant of advances to officers and/ or stockholders of enterprise. Reduction of capital stock — same rule except that the decrease of subscribed capital stock must be in accordance with the pro visions of Sec.. 17 of the Corporation Law: the grant of advances to officers and/or stockhold ers must be considered excessive. b) AG&P has supplied castings for every major Philip pine industry. Alloy cast steel ring gears and cast manganese liners for mining, and mill couplings, crystallizers, rotary kilns, pinions, roll shafts for the sugar industry are examples. Contents of Application to Reinvest (page 19) a) amount of profit or a) statement of surplus to be reinvested accumulated Modern quality control equipment combined with technical specialists guarantee the highest quality. b) specific purpose for re el other relevant Informmatlon. b) Get the benefit of more than 60 years of foundry experience. Get AG&P Capability. (Continued on page 26) IAIG1P FOUNDRY-MACHINE DIVISION Punta, Sta.Ana, Manila Telephone 70-86-41 Page 26 Business Day March 27. 1974 SIGNIFICANT AMENDMENTS IN THE RULES AND REGULATIONS IMPLEMENTING THE INTENT AND PROVISIONS OF R.A. 5186 registered enterprise In the (Continued from page 25) •) the capltalrlsk Invoved; f) availability or non-avallability of technology, domestic capital equip ment and Indigenous raw materials; g) the export potentials; h) Incremental labor In volved; I) cost of antl-pollutlon measures as required by the National Pollution Control Commission. manufacture of Its pro ducts except where the Board authorized part-time Utilization of such machiner ies and equipment for non registered operations of the enterprise. Indirect tax liability excluded (page 21) 4. No provision 4. Tax exemption privilege covers only direct tax liab ilities and excludes taxes transferred or passed on to registered enterprises either by business practice or mere contractual arrangement. Rule XIV. Special Export Incentives for Registered Enterprises: Appropriate percentage of tax decutlon (page 19) (New) Special Tax Credit (page 21) 1. Applicable only to direct exports 2. Export product must be a completely finished product 3. Coverage — means Inter nal revenue taxes only 4. No provision reduced Income Tax (New) (Page 22) 1. Applicable to direct and indirect exports thru other producers or export traders 2. No longer required because the export product may be an Input pf another export product 3. "Special tax credit” — equiv alent to sales, compensating and specific taxes and duties actually paid on the supplies, raw materials and semi-man ufactured products (whe ther Imported or locally purchased) by the registered enterprise for the manufact ure, processing or product ion of Its export products. 4. Time for filing application — within one (1) year from the date of actual exportat ion of final export product. No provision In the 1. old law because at the RULE XVA. Public Participation (New) (Page 23) a) Section 1. A registered enterphse, within one (1) year from registration shall offer to the public (Including alien Investors) 10% of Its total subscribed capital stock (voting or non-voting) and any increase thereof, unless exempt. the 1st three (3) months of offering shall be limited to Filipinos;period of offering shall be six (6) months from date of publication. c) a) publicly held corporations (l.e. those listed In the stock exchanges); b) corporations wholly owned or at least 70% con trolled by publicly-held corporations; c) stocks held by a substantial number of rank and 1) Items to be Imported are reasonably need ed by the Importer In Its registered oper ations; 2) the products, at the time of Importation are not nanufactured domestic ally In reasonable quantity and quality at reasonable b) The Board may require publication of the pro posed Importation at the expense of the applicant. a) For machineries, equipment, and component parts - prior Board approval must be obtained by enterprise before ord b) Fr supplies, spare par ~id raw materials — pur chase order may be made or letters of credit opened after filing application for importation with tbe Board; c) they are not manufactured domestically In reasonable quantity and quality at reasjr-able prices; d) they are reasonably and actually needed and will be used exclusively by the time, there were two other export Incentives — dou ble deduction of shipping costs and promotional ex penses, which are now reAppllcable only against taxable Income derived from registered export operations of the enterprise Available only for exports by a registered enteprlse of Its completely finished pro ducts for a period of five (5) years from date of registra tion unless suspended or can celled by the Board under the last paragraph of Section 9 (b) of the Act. RULE XV. Cancellation of Registration or Suspension of Incentive Benefits (New) (Page 22) Grounds for cancellation of registration — (a) failure to maintain qualifications ofr registration under the Act; (b) willful or grossly negligent violation of the Act, (c) of these rules and Regulations, (d) of the general and specific terms and conditions of registration for (e) of any law for the pro tection of labor or of the consuming public. Grounds for suspension of one or more Incentives — same as grounds for cancellation of registration depending on vlty of offense committed. 3. Hea. Ing committee — composed of at least two (2) Board members and the Director of Industry group concenred. 4. Decision; Right of Appeal — Decision of the Board shall be , based on findings and recommenadtlons of Hearing Commit tee which Is appealable within fifteen (15) days from receipt of (decision after which It shall become final. Mitsubishi. Marketing around the world. And across the board. As Japan's largest general trading company, we’re involved in just about every facet of trade. Marketing and distribution. Processing and transportation. Development of resources. Joint ventures. Investment and finance. And trading in some 10,000 different commodities— many of which do not involve Japan at all. In fact, of our U.S. $ 18,000 million annual turnover, a sizable percentage directly benefits countries throughout the world. And the world is where we operate. In 120 of its main cities we maintain offices, in addition to 140 domestic offices. And we're staffed by 19,000 employees. Some 1,400 of them are native to the area they work in. Backing our huge staff is 100 years of experience. And the kind of broad-gauge expertise that comes with our scale of activity. Detailed reports from our worldwide network enable us to adapt our skills and services to new needs everywhere. Now that we’ve gotten acquainted, let’s get together. We’d like to put our skills to work for you. MITSUBISHI CORPORATION u rtuutuer uj rann ana file employees of registered enterprises, not re lated within the 3rd civil degree of consanguin ity or affinity with majority stockholders; d) stocks held by ei ee’s trust funds, retire ment or pension approved by the Board. Trustee should be a Philippine national; 60% of the fund must accrue to the benefit of Philip pine nationals. Section 4.Shares to be offered (page 24) Common (voting) or preferred convertible to voting within five (5) years at the option of the stockholder; on non-callable basis but may be redeemable not earlier than five (5) years from date of Issue; shares need not be net original but secondary shares or treasury stocks are entitled to capital gains exemption under Sec. 5(b) or tax allowance under of the Act, terms of Public offering Consideration of the firm's future and historical earnings frequency of stock and cash dividends In de termining price offering; for preferred shares, the Board reserves the right to set minimum dividend returns but In no case less than 12% per annum and or require that such shares b be participating; subscription should be within the reach of small Investors. &.Procedural Requirements: submission of a prospectus within six (6) months from registration Indicating the following: a) pertinent data about the enterprise; b) description of shares to be Issued; c) terms of offering and mode of payment; d) highlights of operations and financial position for the past five (5) years; e) management profile; f) current ratio and other financial relationships; g) earnings per share; h) debt equity ratio; I) statement of BOI Incentives available; J) statement of SEC registration and exemption of sale fo securities. publication In a newspaper of general circulation and announcement to be posted In the GSIS, SSS and If offering ts limited to trust funds or employees, In lieu of a prospectus, submission of terms of offering and posting of notice In the office and factory pre mises shall be sufficient. 0 ne national; 60% of i benefit of PhilipsYntex SYNTHETIC TEXTILE MANUFACTURERS CO., INC. SHERIDAN ST., MANDALUYONG, RIZAL Tel. No. 78-49-61 to 65 March 27, 1974 Page 27 Earnings of BOI - registered firms from exports last year totalled $13.1 M, well above the 1972 level • Cement topped all commodities in the non-traditional export list between January to September last year. Exports reached a total of $13.1 million or $9.6 million more than what was exported during a comparable period in 1972. Sales of textile yarns and fabrics also hit a record high last year. Board of Investmentsregistered textile firms recorded sales of $11.0 million from January to September last year. This is $8.6 million more than what was sold during a similar period in 1972, or a 374.34 per cent increase. Sales of garments were also extraordinarily Vhigh last year. During the period, sales reached a total of $12.1 million, '$6.0 million more than •j^hat was recorded in 1972. Last year saw the exports of the new Philippine-made items like electronic components, ceramics products, fish and seafood prepar ations, aluminum, lami nated. safety glass, pulp of straw and abaca and sugar confectioneries. Going up Electronic companies registered with the Board exported a total of $2.4 million during the first three quarters last year. This is a $1.8 million increase from the $589,000 sales figure in 1972 or 310.02 per cent increase. Exports of ceramics products also showed an upward movement last year. Ceramic-registered firms made a combined sales of $2.7 million, $1.6 million more than in 1972 or a 155.53 per cent increase. Although laminated safety glass had limited export sales, it made its breakthrough in com mercial sales. Exports reached a total of $1.4 million, $870,000 more than in 1972. Sugar confectioneries 1/ fane registration certificate cancelled 2/ Two cancelled, seven transferred to R.A. 6135 NUMBER OF BOI-REGISTERED FIRMS (Less) Under R.A. 6135 As of Sept. 30, 1973 As of 08^31,2973 1. Expa-t Producers a) List A 168 99 69 V b) List B 22 9 13 c) Mandatory Inclusions 6 3 3 196 111 85 2. Export Traders 9 5 4 3. Service Exporters 15 12 3 220 128 92 Under R.A. 5186 Schedule E 34 48 (14) 2/ TOTAL 254 176 78 and snack items are a growing export segment based on' the BOI per formance report. Export of these items reached a total of $1.6 million in the three quarters of 1973, or higher by $651,000 over the 1972 total. Better sales Sales of pulp of straw and abaca improved significantly between January and September 1973. Total sales reach ed $522,00 or $454,000 EXPORT LOSS LEADERS OTHER MANUFACTURERS!/ Registered Export Producers January to September, 1972-1973 (FOB In Thousand U.S. Dollars) Jan.—Sept. 1973 1972 (Decrease) Amount Per Cent Tinplates 0 Soil Pipes & Fittings 207 Beer Malt & Liquor 770 Medicinal & Pharmaceutical Products 507 Charcoal 338 Rugs & Carpets 77 Sub-Total Loss Leaders 1899 Net Others 66462 TOTAL ' 68361 - Excludes Bananas. more than what was sold in 1972 during a similar period. BO I-registered foot wear companies hit the million-dollar mark last year. Sales reached a (Continued on page 28) 621 ( 621) (100.00) 669 ( 462) ( 69.06) 863 ( 93) ( 10.78) 584 ( 77) ( 13.18) 377 ( 39) ( 10.34) 80 ( 3) ( 3.75) 3194 (1295) 40.54) 27434 39028 142.26 30628 37733 123.20 Page 2:i March 27, 1974 Cement topped non - traditional exports (Continued from page 27) total of $1 0 million or $393,000 more than what was sold in 1972 for a 55.82 per cent im provement. High sales of rubber shoes was another signi ficant development last year. The BOI data show that BOI-registered ex port producers made a total sales of $75.6 milCOMPARATIVE FOREIGN EXCHANGE EARNINGS Registered Service Exporters Jenuary to September, 1972 and 1973 (In Thousand US Dollars) Professional & Reporting Jan.-Sept More (Less) TarKniroi Firms H73 1»72 Amount Percent Services 10 811 292 519 177.74 Transport & Cargo Handling 1 4886 6619 (1733) ( 26.18) Motion Pictures 2 149 42 107 254.76 Advertisements 2 21 22 ( 1) ( 4.55) TOTAL 15 5867 6975 (1108) ( 15.89) lion in the first three quarters of last year. This is $38.8 million more than what was sold in 1972 or a 105.26 per cent increase. While there was an overall improvement in export sales, six major commodity groupings did not show sales im provements. Due to raw materials problems, there were no tinplates exports last year. While a total of $621,000 worth tin plates were exported in 1972. there was a zero We are a grateful company We are a direct beneficiary of the govern ment's program of encouragement and assistance to local enterprises exercised through the Board of Investments. For this, we are truly grateful. More power to the BOI! May it continue to succeed in its mission through the inspired leadership of men whose proven competence justifies our most optimistic expectations. LEPANTO CONSOLIDATED MINING COMPANY Subsidiaries: Diaboart Products (Philippines), Inc. • Insular Lumber Company (Philippines), Inc. k • Diamond Drilling Corporation of the Philippines • Lepanto Exploration (Asia), Inc. • Lepanto Investment and Development Corporation • Shipside, Incorporated JAPANESE TEXTILE IMPORTS FROM THE PHILIPPINES Items 1967 1968 1969 1970 1971 Ramie 433,402 468,275 470,149 507)147 220,784 (1,203,991) (1,300,868) (1,306,073) (1,408,554) ( 613,338) Ramie noils and waste (including 4,104 1,339 1,486 6,608 7,829 pulled or garnetted rags and yarn ( 11,401) ( 3,720) ( 4,128) ( 18,357) ( 21,749) "Manila hemp (including tow) 1,496,272 1,281,489 1,387,154 1,663,039 (4,619,922) 1,256,259 (fi,156,644) (3,559,976) (3,853,514) (3,489,888) Manila hemp waste (including 161,278 97,383 85,883 106,955 98,665 pulled or garnetted rags and yarn ( 449,697) ( 270,530) ( 238,583) ( 297,121) ( 274,091) Coir 22,537 9,218 3,386 14,442 30,344 ( 62,608) ( 25,608) ( 9,406) ( 40,120) ( 84,296) Sisal fibers - 1,710 ( 4,750) - - - Cardage, cables, ropes, twines and 994 1,861 3,071 39,463 10,338 manufactures thereof ( 2,761) ( 5,170) ( 8,531) ( 81,848) f 28,719) Table linen 110 ( 444) - - - 1,140 ( 3,167) Articles of plaiting materials 935 2,514 6,629 1,135 ( 2,597) ( 6,984) - ( 18,415) ( 3,153) Woven fabrics of flax or ramie 567 ( 1,575) - 450 ( 1,250) 4,700 ( 13,057) 554 ( 1,539) Vegetable textile fibres, n.e.s. - 1,440 ( 4,084) 427 ( 1,186) - Cardage, cables, ropes, etc. 2,150 2,150 142 of Manila fibres ( 5,873) ( 5,973) ( 394) - Nets and netting - 838 ( 2,328) 23,368 ( 64,916) 21,238 ( 58,999) Linens - 569 ( 1,581) 143 821 ( 397) ( 2,281) - Textile fibres - - 1,926 ( 5,350) 83,316 ( 231,452) 21,599 ( 60,002) Outer garments for men and boys - - 747 ( 2,075) 752 ( 2,089) 27,615 ( 76,714) Outer garments for women, girls and infants "" 4,313 ( 11,982) 48,381 L 134,402) 29,647 ( 82,359) Handkerchiefs - - 124 ( 344) 1,235 ( 3,431) Undergarments - - 2,443 ( 6,787) 1,852 ( 5,154) 237 ( 658) - Knitted or crocheted outer garments - - 1,791 12,010 ( 4,975) ( 33,617) 6,429 ( 17,860) Spun yarn of synthetic fibres - - 8,405 ( 23,349) 109,400 ( 303,913) Cotton fabrics woven (not including narrow and special fabrics) - - 33,989 ( 94,421) 9,052 ( 25,146) Embroidery - - 2,610 ( 7,251) 888 ( 2,467) Hat bodies - - 829 ( 2,303) - Articles of textile fibres for furnishing — - - 925 ( 2,570) 762 ( 2,117) Carpets, carpeting, rugs, etc. - - 153 ( 1,814) 320 ( 889) Stockings and socks - - - 97,670 ( 274,105) 5,326 ( 14,796) Labries woven, of synthetic fibres, not including narrow fabrics 375 ( 1,042) Total imports 2,120,849 1,864,832 1,990,949 2,656,537 1,838,698 Source: Japan Exports & Imports (5,891,719) (5,180,503) (5,530,856) (7,379,860) (5,107,903) VJe serve the Nation and the People CFC CORPORATION UNIVERSAL ROBINA CORPORATION MAKERS OF: • BLEND 45 COFFEE the nation’s largest selling coffee • N-RICH NON-DAIRY CREAMER • PRESTO CHOCOLATES • PRESTO BISCUITS • PRESTO ICE CREAM • BRACH'S CHOCOLATES MAKERS OF : • JACK 'n JILL FUN SNACKS chippy,pretzels, chiz curls, barbecue curls, potato chips ’ JACK'n JILL CANDIES • BRACH'S CANDIES • JOJO CANDIES • NISSIN S RAMEN NOODLE • TOOTSIE ROLL & POPS • DUBBLE BUBBLE GUM • ROBINA CANNED GOODS PASIG, RIZAL ISHAVER TELEPHONE ,692-5402 March 27, 1974 Business Day Page 29 record in 1973. Exports of soil pipes and fittings did not im prove last year. First three quarter sales were only $207,000 compared to a high of .$669,000 sales in 1972. $ales of beer malt and liquor were also not encouraging in 1973. The Board data show that sales only reached -$770,000 compared to the 1972 sales of $863,000 or a $93,000 -deficit. No improvement Although firms like United Laboratories made a serious market ing campaign in South east Asia, sales of medi cinal and pharmaceutical products did not im BOI-REGISTERED EXPORT PRODUCERS LEAD EXPORT ITEMS NON-TRADITIDNAL MANUFACTURES1' January to September, 1972 and 1973 (FOB In Thousand U.S. Dollars) amount P^Cent 9,607 271.08 8,696 374.34 6,009 97.49 1,956 76.68 1,826 310.02 1,644 155.53 1,332 70.78 923 42.57 895 132.01 870 154.80 Textile Yarns & Fabrics Garments Handicrafts Electron Components Ceramic Products Fish & Seafood PreparaCordage Aluminum Laminated Safety Glass Sugar Confectioneries Coffee and Other Snack Items Explosives & Misc. Chem. Materials Furniture & Fixtures Pulp of Straw and Abaca Footwear Sub-Total Lead Items Net Others TOTAL prove either. The first three quar ter sales amounted to only $507,000 or $77,000 short of the $584,000 recorded in 1972. Charcoal, an anti pollution material, did not seem to sell very well as earlier projected. Sales only reached $338,000 compared to $377,000, in 1972. Banana sales As in previous years, foreign exchange earn ings from banana ex ports continued to grow. Sales in the first three quarters reached a total of $7.3 million or $1.0 million more than that sold in 1972. The banana industry, compared to other sec651 64.58 576 60.89 556 85.80 454 667.65 __393 55.82 36,388 146.18 _L345_ 2X45 37733 123.20 tors, has been developing at a more rapid pace. Its share in the Japan ese market alone has grown from less than one per cent in 1968 to 32 per cent in 1972. In 1972, banana exports alone amounted to $24.3 million and ranked eighth place among the Philippine top exports products. Area planted to bananas as of June 30, 1973, already reach ed 18,000 hectares. At present, there are 22 bananas growers with technical and marketing tie-ups with Japan. Ex ports of bananas conti nue to be limited to Japan. Export firms As of December, 1973, there were a total of 176 firms registered with export capacities. Two segments, the tex tile yarns and the gar ments producers, consti tute a significant number of these export firms. There are over 27 gar ment companies register ed with the Board and some 24 textile yarns producers. In 1972, the Board initiated a rationalization scheme for both the tex tile and the garments industry. During the first semester of 1973, ex ports of textile yarns, fabrics and garments totalled $13.5 million, three times the 1972 figure of $4.3 million. Firms registered under the Export Incen tives Act as of June 30, 1973 employ a total of 35,113 individuals and pay salaries amounting to P68 million per year. The chemical industries provide the largest number of employment with 15,997 followed by agro-induStries (8,036) and mining and mineral processing industries (6,579). — Excludes Bananas. COMPARATIVE EXPORT PERFORMANCE OF BOI-REGISTERED PRODUCERS January to September, 1972 and 1973 (FOB In Thousand U.S. Dollars) 1973 1972 Anount Per Cent Reporting Cement 13,151 3,54 4 9,607 271.08 14 Garments 12,173 6,164 6,009 97.49 27 Textile Yarns & Fabrics 10,995 2,323 8,672 373.31 24 Handicrafts 4,507 2,551 1,956 76.68 22 Fish & Seafood Preparations 3,214 1,882 1,332 70.78 10 Cordage 3,091 2,168 923 42.57 4 Ceramic Products 2,701 1,057 1,644 155.53 3 Electronic Compo2,415 589 1,826 310.02 8 Sugar Confectioneries Coffee and other Snack Items 1,659 1,008 651 64.58 4 Aluminum Products 1,573 678 895 132.01 1 Explosives & Misc. Chemical Mat. 1,522 946 576 60.89 6 Laminated Safety Glass 1,432 562 870 154.80 3 Furniture & Fixtres 1,204 648 556 85.80 10 Footwear 1,097 704 393 55.82 6 Beer Malt & Liquor 770 863 (93) 10.78) 4 Wood Manufactures 665 462 203 43.94 6 Pulp of Straw & Abaca 522 68 454 667.65 1 Medicinal & PharmaO ceuticalsProducts 507 584 77) 13.18) 4 Paints & Lacquers 430 219 211 96.35 2 Other Electrical Appa ratus and Appl. 369 198 171 86.36 7 Charcoal 338 377 ( 39) ( 10.34) 2 Crumb Rubber 292 149 143 95.97 3 Soil Pipe & Fittings 207 669 ( 462) (69.06) 2 Synthetic Wigs 205 44 161 365.91 1 Rugs & Carpets 77 80 ( 3) ( 3.75) 2 Tinplates 0 621 ( 621) (100.00) 3 Others 3,221 1,470 1,751 119.12 40 Total Other 68,337 30,628 37.709 123.12 221 Manufactures Bananas 7,306 6,225 1,081 • 17.37 6 TOTAL 75,643 36,853 38,790 105.26 227 MCCIA VITAL LINK 10 PROGRESS Growth springs from our natural wealth. The bountiful resources tapped from the earth. Transformed into usable raw materials to power our industries. Booming industries for a stronger economy to serve a growing nation. Such is the chain that will bind us to economic prosperity. And MARIA CRISTINA CHEMICAL INDUSTRIES is the initial link. Efficiently providing basic processed products which are the building blocks of our industries. MARIA CRISTINA CHEMICAL INDUSTRIES WORKING TO REALIZE A FRUITFUL FUTURE 5th Floor Security Bank Bldg. Ayala Ave., Makati, Rizal Tel. nos.86-69-71 to 75 Cable Address: CRISTINA MANILA _ Rage 30 March 27, 197h ASEAN cooperation needed in credit finance and insurance This report envi sages the expansion of the export trade of the ASEAN countries both to the outside world and to each other. The principal pro blems that are likely to arise fall into four broad groups: (i) the provision of short term export cre dit; (ii) the provision of medium term export cre dit; (iii) the problems of export credit insurance and reinsurance; (iv) the problems of increasing the availability of the necessary credit information. Short term export credit Most of the exist, ing exports from ASEAN member coun tries are settled within 120 days and nearly all within 180 days. Export ers' demands for credits vary considerably from country to country. Ex porters rely for pre- and post-shipment export credit on commercial banks which are in some cases assisted by prefer ential central bank redis count facilities. In Indonesia finan cial support for exports has been restricted and confined to pre-shipment credit; in the short run exporters must do busi ness on a cash basis and this has proved an obsta cle to the development of new non-traditional exports, particularly of light manufactures. As the balance of payments position improves, it is hoped to extend def erred payments to foreign customers. It is sometimes possible to finance exports by ob taining foreign exchange credits from foreign banks on terms related to interest rates abroad. But in general, interest rates for exporters (these are slightly higher than those for producers) were of the order of 2-1/4 per cent a month early in 1971 and there were cases of exporters of non-traditional pro ducts paying 4 to 6 per cent a month during the period of inflation. Bank Indonesia re-finances export credits on preferen tial terms. Malaysian exporters have had far less dif ficulty in obtaining cre dit, and the commercial banks have ample funds for both pre-shipment and post shipment finan cing; the latter is con centrated on primary ex ports. Commercial banks usually hold trade bills to maturity or discount them abroad. Interest rates have been around 9 per cent per annum in recent years. In the Philippines export-oriented indus tries have been exempt ed from some of the res trictions imposed for balance of payments rea sons. But in 1970—71 exporters were encoun tering difficulties in ob taining adequate export credit. Interest rates reached about 12 to 14 per cent. The commer cial banks can rediscount with the Central Bank which offers special faci lities for exports. Singapore exporters have access to ample pre- and post-shipment credit. With increasing exports of light man ufactures, foreign com petition has made necessary an increased conces sion of short-term de ferred payment terms to foreign buyers, usually with maturities of up to 120 days. Commercial banks either hold the ex port bills or discount them abroad. The Mone tary Authority of Singa pore does not at present offer preferential redis count facilities on such bills. Thai exporters of (Reprinted from UN report on “Economic Cooperation for ASEAN”) agricultural products do not normally have diffi culty in obtaining fin ance for production and if necessary for exten sion of credit to foreign buyers. Exporters of non-traditional products, such as light man ufactures, may find fin ancial obstacles to the development of an ex port, particularly if they need first to establish a good credit rating and prove their export capa city. Medium term credit export The need for me dium term export credit is likely to grow as ASEAN countries begin to diversify industrial production into those branches of industry that produce capital goods and durables that are usually sold on long er credit terms. Medium term ex port credit is ordinarily for 180 days to five years. Hitherto there has been relatively little de mand for it from ASEAN exporters. The Asian Development Bank is at present studying the problem and the role that it might play in its provision. Export credit insurance The same factors which will lead to growth of demand for both short and medium term export credit will also call for export cre dit insurance. If trade in manufactures is rapidly increasing, both with the extra-ASEAN world and in the intra-ASEAN markets, there will be more traders engaging in trade with customers whose credit worthiness is less familiar than that of the houses through which the traditional trade in primary pro ducts has been conduct ed. The risks involved are both to the -traders themselves and to the banks from whom they are seeking credit. The risks fall into two main categories: a) risks arising from the possible in solvency of the buyer, his default ing on a payment or his refusal to accept the goods shipped; b) 'political' risks arising from such factors as war, dis turbances in the buyer's country, cancellation or non renewal of an export license, delay or failure in the country of the buyer in providing foreign exchange to cover imports, unforeseen or additional charges resulting from diversion or interruption of the shipment of goods. The principal problems that arise with any new credit insurance agency are these: a) Will the potential volume of exports, particularly of manufactures and semi-manufactures, provide a sufficient premium income to make an agency economic? b) Can the exper ienced and highly qualified staff be found to operate the agency? c) Is adequate credit information avail able? Though trade developments may re quire credit information and credit insurance regarding a multiplicity of new countries and new traders,- possibly with high commercial and political risks, the bulk of the business is concerned with the im port markets of wellknown developed count ries. The problems of sufficient premium in come to justify the set ting up of an agency raise again a 'chicken and egg' issue. Premium in come is at present in adequate because the trade is small. The trade is small because the credit risks cannot be in sured. An estimate of the probable premium income for an ASEAN system, on the basis of US$20 to $30 millions of exports declared for cover annually, would be approximately US$100,000 to $150,000. If, as is almost certainly the case, the agency would require to have an office in each national capital, this income could not make it self-supporting without government assistance. There is however, a more fundamental difficulty in setting up a multi-national agency. The political risks of conflict between the i ndividual countries which are joining to set up the agency and be tween which, as trade partners, much of the trade to be insured is flowing. The means of dealing with this pro blem would need to be solved. At a minimum it would need to be esta blished that no political or exchange transfer losses could be accepted from participants in the system - that each country would be liable for any risks resulting from its own policies. These represent difficult but not insol uble problems. It is re commended that the ASEAN governments set up a joint committee to examine the possibility of an ASEAN export credit insurance agency. The committee should consider this proposal in the light of any proposal for a wider regional scheme that may eman ate from the ECAFE study of the problem. Export credit reinsurance As in the case of ordinary insurance, an export credit insurance agency may find a need to reinsure certain com mercial export risks which it cannot itself absorb. It is a serious difficulty of any small" agency that it is likely to have difficulty finding adequate reinsurance cover at moderate cost and may find itself forced to cede more than it would wish of the risks insured in order to obtain reinsurance^ cover. In the circum stances, international re insurance cannot be regarded as a potential means of support for a new credit insurance* institution. Credit information No credit insur ance system can work ’ without credit inform ation. Improvement of credit information facil ities in the ASEAN region can not only facilitate intra-ASEzW trade but could also lent to sales of credit inform ation to exporters ancl credit reporting institut ions in the rest of the world. It js recommend ed, therefore, that re porting services be esta blished in those ASEAN countries in which they are lacking and improved in all countries where they exist, as a necessary step towards closer co operation in trade credit and credit insurance. Since the services can be most effectively pro vided by the private sector, it is important' that from the first re presentatives of the' banks and business com munities be involved in4 any measures to improve ' these services. rmc riverside mills corporation One of the largest and most diversified textile mills Keeping in step with the New Society by earning dollars for our country’s economy. March 27,1974 Business Day MONETARY AND FISCAL POLICIES AFFECTING FOREIGN INVESTMENTS Prepared by OFELIA V. BULAONG and EVA POLICAR-BAUTISTA Board of Investments The new order has brought about changes in both monetary and fiscal policies affecting foreign investments. These changes cover the broad areas of foreign borrowings, foreign investments, and invisible transactions. A compilation of these new rules have been prepared by the Board of Investments as a guide to those desiring to do business in the Philippines particularly in BOI joint-venture areas. The more pertinent fiscal and monetary regulations affecting foreign investments as they affect BOI-register ed companies are as fol lows: FOREIGN BORROWINGS A. Prior Central Bank Approval Required for New Borrowings: All foreign borrow ings (in .cash or in kind) contracted after February 21, 1970 shall be subject to prior approval by the Central Bank, Such borrowings shall be governed by regu lations promulgated by the Monetary Board. B Minimum Term for Approval: The follow ing minimum terms for foreign borrow ings have been laid down by the Mone tary Board: 1. Interest Rate a For Private Sector Borrowings — not more than 2 per cent over the prime rate of the lending country. b. For Government Borrowings Under Republic Act (R.A.) 6142 - not more than those imposed or charged by the International Bank for Reconstruction and Development (IBRD), the Asian Development Bank (ADB), or other reputable interna, tional organization or non-govern. mental national or international lend ing institutions. c. For Other Govern ment Borrowings — borrowings by government agenc ies, corporations and instrument alities under the authority of their respective charters shall, in general, carry an interest rate of not more than 2 per cent over the prime rate of the lending country. 2. Minimum Repayment Terms a. For Private Sector Borrowings $250,000 or less — 5 years, payable in equal annual installments to commence one year after shipment or draw down date. Over $250,000; $500,000 — 8 years, payable in equal annual installments. Over $500,000 - 12 years, payable in equal annual installments. Applications exceed ing $500,000 with at least 8 years terms inclu sive of a 3-year grace period on repayments shall, however, be allow ed for export industries. (1)Minimum repayment terms for Central Bank - certified ex port oriented indus tries and industries registered by BOI under the Export In centives Act: Amount of Application Repayment Period Up to $50,000 3 years Over $50,000 $150,000 4 years Over $150,000 to $250,000 5 years (2)Minimum repayment terms for foreign borrowings of BOIapproved pioneer in dustries and enter prises engaged prima rily in the manufac ture/production of export products: Amount of Application Repayment Period Up to $25,000 3 years Over $25,000 to $100,000 4 years Over $100,000 to $250,000 5 years b. For Government Borrowings — Un der R.A. 6142 - 10 years or longer. c. For Other Govern ment Borrowings — shall, in general, adhere to the minim repayment terms required for private sector borrowings. C. Computation of the Grace Period and Maturity Period: The grace period is gener ally determined from the date of shipment in the case of sup pliers' credit and the inward remittance date in the case of cash loans. In cases where the date of shipment or inward remittance may fall prior to the Central Bank approval of the foreign credit, then the grace period shall commence from the date of such approval, period of loans shall also be reckoned from the same dates. D. Unallowable Foreign Borrowings: 1. Applications to lyail of foreign cre dits shall not be given due course in the fol lowing cases: fl. Where the proposed project expands the capacity of over crowded industries; or b. Wh ere the ac counts of the ap plicant firm and/or its principal offi cers and stock holders with gov ernment financial institutions are in arrears. 2. Applications for availment of medium and long-term credits that require the execution of promis sory notes with short er maturity periods which shall be subject to periodic renewals under certain condi tions shall not be given due course. 3. Authorized agent banks shall not incur additional foreign obligations except those arising from normal international trade transactions. E. Prescription of Cen tral Bank Approvals — Starting on Nov ember 17, 1970, Cen tral Bank approvals for proposed availments of foreign cre dits shall have a pres cription period of 90 days, subject to ex tension for another 90 days upon sub mission of proofs that negotiations are in progress and are given a reasonable chance of success. F. Inward Remittance of Cash Loans — Pro ceeds of cash loans shall be sold by the recipients to autho rized agents (such as commercial banks) of the Central Bank within 3 business days following re ceipts of the foreign exchange from such cash loans. Such pro ceeds shall be in cur rencies prescribed to form part of the international reserve. G. Amortization of Loans in Accordance with Loan Contracts — Amortization of foreign loans shall be in accordance with the terms of the IP That the one company in the Philippines which has pioneered in the manufacture and supply of Sodium Tripolyphosphate is PPI. Polyphos phates, Inc. Tell Asia. POLYPHOSPHATES, INC. CORPORATE AFFILIATES: CHEMICAL INDUSTRIES OF THE PHILIPPINES, INC. CHEMICAL BULK CARRIERS, INC. • LMG CHEMICALS, INC. E. S. GARCIA DEVELOPMENT CORP. • VISION INSURANCE CONSULTANTS, INC. 5TH & 6TH FLOORS. SIKATUNA BLDG., AYALA AVE., MAKATI. RIZAL P.O. BOX 358 MAKATI • CABLE ADDRESS: CHEMPHIL. MANILA • TELEX NO. 7222236 CIP PH TEL .NOS.: 88-19-61, 88-19-62. 88-19-63. 88-19-64. & 88-19-65 lell Asia. covering loan con tracts approved by the Central Bank. The foreign exchange needed to meet such amortizations shall be purchased from authorized agent banks of the Central Bank. H. No Voluntary Pre payments on Loan Allowed — To ensure that debt-service pro jections of the Cen tral Bank comply with the requirements of R.A. 6142, pre-, payments of foreign borrowings are not generally allowed. /. Service Commitment Guarantee and Other Incidental Fees — Such charges are ap. proved on a case-tocase basis provided the amount or rate of the fee or charge is reasonable. J. Registration of- Loan Agreements — The Central Bank shall require as a condition to the approval of all applications, including those previously ap proved, the regis tration of the covering loan and credit agree ments within 2 weeks after the date of their execution. Only Central Bankregistered foreign obligations shall be serviced by author ized agent banks. K. Registration of Availments on Foreign Credits — Availments on foreign loans are required to be regis tered with the Central Bank. £. Preferred Borrowers — In evaluating the desirability of new borrowings, prefer ence shall be given to foreign borrowings of the following: 1. Export-oriented industries, certified as Bank, which may be any of the following: ftge32 Business Day March 27, 1974 a. Firms belonging to industries the major portion of whose output is destined for export - i.e., sectors recog nized to be en gaged in the actual production for ex port of indigenous agricultural, forest (except logging), mineral, and marine products; b. Firms engaged in the processing or manufacture of finished products, chiefly for export ation, or with an export potential as evidenced by a re cord of export ation or export contracts, in which at least 70 per cent of total raw materials used con sist of indigenous raw materials, pro vided at least 50 per cent of the total production is • destined for ex port; c. Firms engaged in Manufacturers' manufacturer TV TUNERS, YOKES, FLYBAC TRANSFORMERS ANTENNAS @ CWioweafitH MANDALUYONG, RIZAL • TEL. 78-38-55 ASK FOR INDUSTRIAL AND COMMERCIAL SALES OPERATIONS the processing or manufacture of finished products in which the actual or potential net foreign exchange earnings (total foreign exchange earned out of the exportation of the product less total foreign exchange required to pro duce the finished product and to ser vice the operations of the firm) of each individual firm a year shall not be less than $20,000. 2. Board of Invest ments (BO I)-approved industries; 3. Non-export orient ed industries not util izing domestic credit resources; 4. Firms utilizing rela tively labor-intensive methods; and 5. Firms implement ing geographical dis persion (i.e., location outside Metropolitan Manila)M. Stand-by ,L/Cs Cover ing Foreign Credit Lines of Domestic Entities Other Than Commercial Banks — The following are the regulations on the treatment and/or ser vicing of stand-by let ters of credit (L/Cs) covering foreign cre dit lines of domestic entities other than commercial banks. 1. Opening of stand by letters of credit to cover credit lines shall be considered as new foreign borrowings and shall be subject to prior Central ap proval. 2. Stand-by letters of credit to cover credit lines which provide for availments or uti lizations to be repay able and/or renewable on periodic basis shorter than the stated maturity periods including stand-by letters of credit providing for yearly confirmation and containing an acceleration clause, shall not be given due course. Deferred and stand-by letters of credit covering Cental Bank-approved loans contracts with fixed amortization sche dules, which, under accepted international banking procedures, may be subject to yearly confirmation are not included. 3. Renewal of utilized balances of credit lines covered by stand-by letters of credit opened and to the extent of the amount availed of under the credit line prior to the effect ivity of Circular 315 (December 1, 1970) may be given due course in accordance with the original terms and to the ex tent of the stated maturity of the credit line. 4. Unutilized balances against credit lines covered by stand-by letters or credit opened prior to the effectivity of Circular 315 shall be deemed automatically can celled and the cover ing stand-by letter of credit amended ac cordingly. N. Withholding Tax on Interest on Foreign Loans — Interest pay ments on foreign loans are subject to a 15 per cent with holding tax. O. Financing of Bulk Rice Processing and Storage Facilities - The following policy guidelines on the fin ancing of bulk rice processing and storage projects were ap proved. by the Mone tary Board. 1. No government agency or any finan cial institution, either government or pri vate, shall negotiate or secure loans or credits for bulk rice processing and sotorage facilities; 2. Opening of letters of credit or the im portation of bulk processing and storage equipment which can be supplied under the IBRD program, or the negotiation or con clusion of purchase contracts, therefor, shall not be given due course; and 3. All requests for financing of bulk rice processing and storage projects and those projects for conven tional warehousing and milling with a storage capacity of 40,000 cavans and above shall be referred to the Grain Process ing Unit of the DBP for evaluation and possible inclusion under the IBRD pro gram. P. Debt-Equity Ratio Requirement - Gene rally, firms availing of foreign credit shall maintain a debt equity ratio of at least 75:25 for the duration of the cre dit. Q. Rate of Exchange Applicable to Loan Repayments - Re payments of principal and interest on for eign loans approved by the Central Bank shall be serviced at the rate of exchange prevailing at the time of the remittance of such repayments. Export deduction privilege A. Who May Avail of the Privilege — Only export-oriented indus tries may avail of the export deduction pri vilege to cover repay ment of new foreign borrowings. B. Requirements for the Grant of the Privilege — Export-oriented in dustries may subject to Central Bank ap proval, negotiate for the procurement of machinery, equip ment, raw materials and supplies from ab road through an ex port-deduction ar rangement, provided that: 1. Such items are not available locally; 2. The foreign oblig ation conforms to existing regulations governing foreign bor rowings; 3. The machinery, equipment, raw mate rials or supplies to be imported shall be for the exclusive use of the applicant for the production, process ing or manufacture of the export product; 4. The total amount of the deductions during any given quarter shall not ex ceed the total amor tizations, including interest, falling due during said quarter in accordance with the terms of the pertinent contract approved by the Central Bank plus the value of raw materials and supplies needed for normal operations. All re ports of foreign sales covering shipment with deduction fea tures shall be referred to the Export Depart* ment, Central Bank for prior approval .The exporter shall also submit regular and periodic reports of his shipments and pay ments in a form precribed by the Central Bank. C. Inward Remittance Required-AW export proceeds including the deductible amounts, should first be inward-remitted. (In cases where the shipment from which the deduction is to be made is proximate to the scheduled amor tization of an ap proved obligation to which said deduction is to be applied, spe cific exception may be allowed on a caseto-case basis). D. Allowable Rates of Deduction — In the procurement of machinery as replace ment for fully depre ciated equipment, the rate of deduction shall not exceed 15 per cent of the FOB value of each export shipment. For the procurement of machinery, equip ment, raw materials and supplies for a new project, the rate of deduction shall not exceed 50 per cent of the FOB value of each export shipment from the new project. For the procurement of machinery, equip ment, raw materials xrch 27,1974 Business Day fage 33 and supplies for a new project, the rate of deduction shall not exceed 50 per cent of the FOB value of each export shipment from the new project u expression. The phrases "shall not exceed 50 per cent" or "shall not exceed 15 per cent of export shipments" ' constitute the maxi mum ceilings of de ductible amounts t from any shipment, **^and such amounts should be further delimited by the total amortization falling ’ due within one year of the foreign loan to which such deduc tions are applicable. FOREIGN INVESTMENTS "A. Prior Central Bank Approval Required — No new inward foreign investments (in cash or in kind) , made after February 21, 1970 shall be made without prior \ Central Bank approv al. Such investments r shall be subject to re gulations promulgated by the Monetary Board. 6. Preferred Investment Areas — In evaluating the desirability of new investments, preference shall be given to: 1. Ex port-oriented industries; 2. BO I-approved in dustries; 3. Non-export orient ed industries not util izing domestic credit resources; 4. Firms using rela tively labor-intensive methods; ’ 5. Firms implement ing geographic dis persion (i.e., location ' outside Metropolitan i Manila). C. Prohibited Fields of In vestments — Applica tions for new foreign investments in fields certified by the BOI to have excess capacity shall not be given due course. Application for new foreign investments in fields certified by the BOI to have excess capa city shall not be given due course. D. Investments in Firms Engaged in OH Ex ploration and Drilling — Philippine firms engaged in oil explor■ ation and oil drilling shall raise all the for eign exchange resour ces needed to meet the foreign exchange costs of their projects through sale of the firms' shares of stock abroad and/or through other means of participation of foreign partners and associates In the ven ture. Clearance from CB-MEDIAD Is neces sary for all applic ations for purchase of forex and/or L/C openings. E. Investments in Firms Engaged in Oil Refin ing — Any new for eign exchange applic ation to be acted upon for the first time needs prior clearance of the Oil Industry Commission. F. Investments in Philip pine Domestic Secu rities — Philippine domestic securities refer to shares of stock of domestic corp orations listed in duly authorized Philippine stock exchanges as well as bond issue of the National Govern ment also listed in such exchange. Such investments, in for eign currency, may be made by non-resi dents through inward remittance and by depositors under the Philippine Currency Deposits System by withdrawal from the foreign currency ac count. G. Central Bank Valua tion of Investment Prior to Registration — As a matter of policy, foreign invest ments in the form of capital equipment and supplies with a value of more than $100,000 shall, upon arrival of the capital equipment and sup plies, and prior to the registration of the foreign investments, be subject to valua tion by Central Bankdesignated experts, at the expense of the applicant concerned. H. Rate of Exchange on Remittance of Profits, Dividends and Repat riation of Investments — Transfer or remit tance of profits and dividends abroad by non-residents on their investments in the Philippines and re patriation of such foreign investments shall e serviced at the rate of exchange pre. vailing at the time of remittance. Investments repatriation Application for the regis tration and repatriation of foreign investments shall be considered in ac cordance with the follow ing guidelines: A. Foreign investments existing as of March 15, 1973 and duly registered with the Central Bank of the Philippines — 1. Investments in CB-certified export oriented industries may be repatriated in full or 'in annual ins tallments to the ex tent of the applicant's share in net foreign exchange earnings of the firm for the pre ceding year. By "net foreign exchange earnings" is meant the total foreign ex change earnings from export of the product less total foreign ex change required to finance production of export sales, oper ation and servicing of the applicant's firm prorated to his share in the total invest ment. 2. Investments in BOI-registered enter prises — a. I nvestments in BOI-registered enter prises engaged in pro duction of import substitute and/or ex port-items, but not qualified as CBcertified exportoriented industries, may be repatriated in accordance with any of the following alter natives, whichever is less on annual basis: * to the extent of • the total net for eign-exchange earn ings starting one (1) year after liqui dation of invest ment; or * in 3 equal an nual installments starting one (1) year after liquid ation of invest ment. b. I n vestments in BOI-registered enter prises not engaged in production of import substitute items, may be repatriated in four (4) equal annual ins tallments starting one (1) year after liquid ation of investments. 3. Investments in other industries (e.g., industries not falling under Nos. 1 and 2 above) a. Investments in in dustries which did not utilize domes tic credit resources may be repatriated on the same basis as BOI-registered industries not en gaged in produc tion of import substituting items (No. 25 above) b. Investments in all other industries may be repatriated in accordance with the following sche dules: $250,000 or less — (5) equal annual installments after liquidation of the investments Over ’ $250,000 to $500,000 -Seven (7) equal annual installments after liquidation of the investments Over $500,000 - Nine (9) equal annual installments after liquidation of the investments. 4. During the interim period between the sale of the invest ments and actual repatriation, the pro ceeds of cash sale may, while awaiting the scheduled repat riation, be invested by the foreign inves tors in the following: a. Foreign currency deposits under Central Bank Cir cular 343; b. Government secu rities; and/or c. Shares of stocks in B OI -registered or CB-certified export-oriented in dustries. B. Foreign cash invest ments made after March 15, 1973 - 1. Foreign cash in vestments made in.(a) CB-certified export oriented industries, or in (b) BOI-registered enterprises and in (c) Central Bank-ap proved Philippine securities listed in the local stock exchanges shall be registered with the Central Bank through the commer cial bank in which the inward remittance of the cash invest ment was effected. The request for regis tration shall be made in a form prescribed for the purpose and shall be coursed Our story in three words: PIONEERING. GROWTH. LEADERSHIP. From six employees in 1931, we have grown into an industrial complex with over 3,000 employees, assets of 1*70 million and sales in excess of Pl20 million. Starting in machinery Sales during the pre-war mining boom, we have since become exclusive distributors for many of the world’s leading industrial equipment manufacturers. Later in the thirties, we expanded into steel construction; today, we are the largest suppliers of LPG pressure vessels and alloy pipe welding services. Our new P6-million fabricating plant is the biggest in the industry. During the fifties, we established oqr alloy steel foundry and later pioneered the use of induction melting. Through continuous modernization, our foundry has gained undisputed leadership — in size and facilities, in sales and technology, and in product quality and service. Our continuing goal: pioneering, growth and leadership — in every field we have chosen, and in every field we may choose in the years to come. Page 34 Business Day March 27,1974 through any local bank through which the foreign cash in vestrrients were in wardly remitted or deposited either un der Central Bank Cir cular Nos. 304 or 342 or through ordinary commercial channels. 2. Upon verification of complaince with the qualifying require ments in No. 11-1 above, the foreign cash investment above may be swapped without forward cover for pesos with the Central Bank by the local bank con cerned for a mini mum period of three (3) months and a maximum of three (3) years, subject to renewal at the option of the foreign inves tors 3. Repatriation of the foreign cash invest ments referred to herein less losses, if any, may be made at any time by the for eign investors, subject to the terms and con ditions of the swap arrangement between the handling bank and the Central Bank. 4. Foreign cash in vestments in other industries, e.g., in in dustries outside of —those that are CB-certified export oriented or are BOI-registered, and in non-listed Phil ippine securities, and foreign investments made in kind instead of cash, in any in dustry, shall continue to be governed by existing Central Bank regulations. C. Repatriation of For eign Investment Capi tal of OH Companies — Any application for repatriation of capital for oil companies need prior clearance of the Oil Industry Commission. Remittance of Profits and Dividends or In vestments as of March 15, 1973 and those made Thereafter — The transfer or remit tance of profits and dividends abroad by non-residents corres ponding to the non resident's share in the net profits on foreign investments realized, after taxes, during the year for which the remittance of the earnings is being made, shall be subject to the following rules: 1. Rem ittances of profits before the end of the fiscal/calendar year are not allowed. In aother words, no interim profits are allowed to be remit ted. 2. Remittances of profits and dividends accruing to non-resi dents out of net pro fits realized begin nings January 1, 1973 shall, net of taxes, be allowed in full at the prevailing exchange rate. 3. Remittances of unremittable profits/ dividends on account of the 25 per cent $250,000 $500,000 $750,000 limitation shall with prior Central Bank clearnce be allowed after withholding tax, provided, however, that such remittances shall not be financed by domestic borrow ings. Domestic borrowings shall be limited to bor rowings from any bank ing, financial or credit institution. The schedule of remittance must be drawn up in conformity with the following mini mum remittance periods: Aggregate Amount Per Firm Minimum Remittance Period 100,000 and less 2 months Over $100,000 to 4 months Over $250,000 to 8 months Over $500,000 to 12 months Over $750,000 to $1,000,000 16 months Over $1,000,000 to $1,500,000 20 months Over $1,500,000 24 months 4. Capital gains, pro fits and dividends, net of taxes, if any, real ized by foreign invest ments made in Cen tral Bank-approved Philippine securities listed in the local stock exchange shall be remittable in full at the prevailing rate of exchange. A. Remittance for exist ing obligations regist ered with CB prior to November 26, 1969 — Resident companies which have existing foreign obligations re gistered with CB prior to November 26, 1969 may remit inte rest abroad. B. Remittance for exist ing obligation not re gistered with CB prior to November 26, 1969 — Approval and registration with CB is necessary. INVISIBLE TRANSACTIONS A. What Constitutes Invi sible — The term re fers to forex transact ions, arrangements or business arrangements or business operations which are generally non-trade in nature. Non-trade arrangements involve or re quire rendition of services by private re sident persons, firms, associations or corpor ations with private non-resident person, firms associations or corporations situated abroad. B. Mode of Payment — Payment may be in pesos or any foreign currency acceptable to Central Bank. C. Reports to CB re quired on forex earn ings, acquisition or re ceipts — The follow ing resident persons, firms, or corporations shall render a quarter ly report to the foreign Exchange Dep artment of the CB not later than 15 days after the end of each calendar quarter on forex earnings, acqui sition or receipts sold to authorized agent banks: 1. Agents or branch offices of foreign ship ping and airline com panies; 2. Shipbuilders, ship repairers, or ship chandlers providing supplies to a tendering services to foreign owned or operated vessels. 3. Shipping or airline firms, agencies or per sons, providing or supplying crew mem bers to foreign owned or operated vessels or aircrafts; 4. Indentors, commis sion agents, or Philip pine representatives of foreign firms; 5. Insurance com panies or insurance agencies engaged in foreign insurance and reinsurance business, or engaged in insur ance business abroad through overseas branch offices or agencies; 6. Construction firms, engineering firms, architectural firms, and labor contractors undertaking jobs at U.S. military, naval or air bases, or other United States estab lishments in the Phil ippines, or undertak ing jobs abroad. 7. Oil companies en gaged in selling avia tion gasoline bunker oil and/or other oil products to aircrafts of foreign airline com panies or vessels of foreign shipping com panies; 8. Recipients of foreign exchange rep resenting payment of royalties, firm, tele vision, and other ren tals; 9. Receipts of foreign exchange from non residents pursuant tc other contracts o1 services. A. Remittance by Oil Companies — Prior clearance is needed from the Oil Industry Commission. B. Royalties and Rentals on Patents, Trade and Copyrights - Remit tance or royalties or rentals on patents# trademarks and copy rights may be allowed net of the withholding tax up to 50 per cent* of the royalties or rentals incurred during the year for which the-* remittance is being made, provided, that no royalty remittance should exceed 5 per cent of the wholesale price of the commo dity which is man ufactured locally under a royalty con. * tract. C. Technical Service Fee — Remittance of tech nical service fees are allowed to the extent provided for in the technical service agree-'* ment. D. Remittances of Filr Earnings & Rentals — Remittance of the producers' shares of earnings made or movie films and rent tals on television films imported without ex-* change payments may be allowed up to 50 per cent of the prd^ ducers' shares of earn ings or of TV film rentals during the year for which the remit tance is being made. YEARS IN THE PROMOTION OF THE •PINE WOOD INDUSTRY I-1974 aww -the respected brand in world markets / INDEX TO ADVERTISERS Abbott Laboratories RCBC .................... Philippine Petroleum imperial Textile .... Makati Leasing .... GM Torana ............ Olasahar Oil............ Delta Motor............ Chrysler................... General Electric .... Rustan Investment................15 Matling Industrial ................22 Mabuhay Vliiyl ....................20 Manuel Nieto........................ 23 Mondragon Industries........... 17 Ramie Textile........................17 Phil. Carpet.......................... .17 Synthetic Textile..................26 Nlssho-lwei ..........................17 Francisco Motors..................11 PICOP.................................. 15 Marla Cristina Chemicals . . .2$ PDCP....................................13 AG & P...............................25 Radiowealth .......................32 Engineering Equipment . ■ ■ .3S Atlas Copco.........................24 Genbacor.............................14 Apex Mining.......................1* Riverside Marketing.............30 Elizalde «, Co.......................20 Kasten International.......... 11 Industrial Technologists . . .15 Delgado Brothers............... .14 Process Operations. . Mlnolco . . ............. Mitsubishi ............ Eastern Textiles . . . UPPC..................... Consolidated Foods Corp. . .26 Phil. Agriculture ................ .34 GAMI ..................................11 Chemical Industries............ .31 Lepanto Mining................... 28 Sta. Clara Lumber...............34 Genalum ............................... 9 Metalux................................. 9 Atkins Kroll ......................... 9 l/l/e are doing our share — The PHILIPPINE AGRICULTURAL AVIATION CORPORATION 10th floor, J.M.T. Building, 6764 Ayala Avenue, Makati, Rizal Telephones: 88-47-61 e 88-47-69 e 88-47-60 PAAC contributes intensively in aerial agricultural spraying of rice, bananas, and other important Philippine crops. PAAC provides a solid support to the agricultural revolution of the New Society in line with Board of Investments’ activities to restructure the country’s industrial pattern. Address Reply to: P.O. Box 152 MAKATI COMMERCIAL CENTER Makati, Rizal OLASAHAR OIL PHILIPPINES, INC. SUITE 42, CARMEN BLDG., 1105 M. Y. OROSA ST. ERMITA, MANILA, PHILIPPINES TELS. 50-93-83, 50-93-33 Capitalization : P36,000,000 (Increase under process) B.O.I. Certificate of Registration : No. 71-179 (non-pioneer) Foreign Investor : U.D.I. LIMITED (LONDON) Plant site : Misamis Oriental Board of Directors: ERNESTO M. MACEDA (Chairman) FORTUNA BARBA (Vice Chairman) VICENTE V. DE VILLA, JR. (President) FIDELINO G.BENZON VICTORICO CHAVES RAFAEL DINGLASAN, JR. ALEJANDRO GALANG, JR. (4) Representatives of U.D.I. LIMITED (LONDON) Subscribers: U.D.I. LIMITED (LONDON) OLASAHAR MINING CORPORATION ERNESTO M. MACEDA FORTUNA BARBA VICENTE SALUD DE VILLA, SR. VICENTE V. DE VILLA, JR. HENRIETTA TAMBUNTING DE VILLA JOSE ARAGON JOSE BALTAZAR FIDELINO G. BENZON ALBERTO V. BOLAnOS VICTORICO CHAVES MIGUEL CORNEJO, JR. RAFAEL DINGLASAN, JR. ALEJANDRO GALANG, JR. FELICISIMO K. MALBAS, JR. LUIS ORDONEZ, JR. RAUL PAREDES BENJAMIN TAMBUNTING PACIANO TANLIMCO Grow with our expanding economy. Take a closer look at Leasing. The new alternative to debt or equity financing utilized by progressive companies. Get your equipment and profits now. LEASE! And, call our specialists today. Imakati] LEASING CORPORATION 5TH FLOOR, MAKATI STOCK EXCHANGE BLDG, AYALA AVENGE, MAKATI? RIZAL • TEL. 87-76-47/88-32-93 P.O. BOX 259, MAKATI COMMERCIAL CENTER, MAKATI, RIZAL