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4lflunit x ^Z MINISTRY ORDER NO. 7 i/ Series of /9th &t) RULES AND REGULATIONS GOVERNING THE ISUANCE, PLACEMENT, SALE, SERVICING AND REDEMPTION OF US D LLAR TREASURY BILLS UNDER R.A. NO. 245, AS AMENDED Pursuant to the provisions of Section 4 of Republic Act No. 245, as amended, and, after prior consultation with the Monetary Board, the following rules and regulations governing the issuance, placement, servicing and redemption of US DOLLAR TREASURY BILLS authorized under the said Act are hereby prescribed: SEC. 1. Authority for the Issuance and Sale. - By virtue of Section 1, R.A. No. 245, the Minister of Finance, with the approval of the President of the Philippines, after consultation with the Monetary Board, is authorized to borrow from time to time on the credit of the Republic of the Philippines such sum or sums as in his judgment may be necessary to meet public expenditures authorized by law or to provide for the purchase, redemption, or refunding of any obligations, either direct or guaranteed, of the Philippine Government, and to issue therefor US Dollar denominated Treasury Bills as defined in the second paragraph of Section 1 of R.A. No. 245. SEC. 2. Determination of the Forms, Interest, Etc. - The Minister of Finance, in consultation with the Monetary Board, shall prescribe the form or forms, the interest and discount rates, the denomination, maturities, negotiability, convertibility, taxability, call and redemption features of the US Dollar Treasury Bills. SEC. 3 (a) Description of the US Dollar Treasury Bills. - The US Dollar Treasury Bills shall be issued in bearer form, on a discount basis at rates acceptable to the Minister of Finance with LIBOR as reference, and payable at maturity without interest. They may be offered for sale either on a competitive or other bases, or at a fixed rate of discount and may be made payable at any date not later than one year from the date of issue. US Dollar Treasury Bills bearing the same date of issue and the same date of maturity shall constitute a series.

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(b) Denomination and Exchange. - US Dollar Treasury Bills shall be issued in denominations (maturity value) of $500; $1,000; $10,000; $50, 000; and $100, 000. Exchange of these bills from higher to lower and lower to higher denominations of the same series may be effected at the Central Bank of the Philippines. (c) Transfers. - Transfers of these bills may be effected by mere delivery, with or without notice to the Central Bank of the Philippines . (d) Redemption. - The US Dollar Treasury Bills shall be redeemed in US dollars on or after maturity at par without interest at the offices of the Central Bank of the Philippines, as Fiscal Agent, or of any agency authorized by the Fiscal Agent. (e) Tax Exemption. - The income derived or earned from the acquisition, sale, transfer, exchange or other disposition by the holder of the US Dollar Treasury Bills shall be exempt from the payment of any tax imposed or imposable by-the Republic of-the Philippines or any of its political subdivisions and instrumentalities, existing law or regulations to the contrary notwithstanding.

Losses incurred from the said acquisition, sale, transfer, exchange or other disposition of the tax-exempt US Dollar Treasury Bills shall not be allowable as deduction from income tax. SEC. 4. Issue, Placement, Servicing and Redemption. - The actual issue, placement, servicing, and redemption of US Dollar Treasury Bills shall be effected by the Minister of Finance through the Central Bank, as Fiscal Agent of the Philippine Government. SEC. 5. Special Demand Deposit Account. - The Bureau of the Treasury shall maintain a "Special Demand Deposit Account" with the Central Bank of the Philippines to which all proceeds from the sale of US Dollar Treasury Bills under R.A. No. 245 shall be credited. SEC. 6. Loss, Theft or Destruction, Etc. - In case of loss, theft, destruction, mutilation or defacement of US Dollar Treasury Bills, immediate request for relief should be made to the Central Bank of the Philippines in accordance with the rules and regulations issued by the Central Bank pursuant to Presidential Decree No. 649 (Central Bank Circular No. 28, as revised and amended, and as supplemented by Circular No. 472)..

SEC. 7. Reservation as to Terms of these Rules and Regulations. The Minister of Finance reserves the right to amend, supplement, revise

- 3 or withdraw all or any of the provisions of these rules and regulations at any time, or from time to time. SEC. 8. Effectivity. - These rules and regulations shall take effect immediately.

CESAR VIRATA Minister of Finance

October

/^, 1982