[ Memorandum Circular No. 917, June 25, 1976 ]
PRESCRIBING THE RULES AND REGULATIONS TO GOVERN THE INSTALLMENT PURCHASE OF AIRCRAFT BY NATIONAL GOVERNMENT AGENCIES.
Through Letter of Instructions No. 380, the acquisition of aircraft from the inventory of Philippine Aerospace Development Corporation (PADC) by any national government agency, under lease purchase or installment payments, was authorized. The following rules and regulations are hereby prescribed to govern all such acquisitions by any national government agency:
I. Prerequisites
Buyer-agency shall, prior to entering the purchase contract, first secure:
A. An authorization from the President to purchase the aircraft; and
B. A certification from the Commissioner of the Budget as to the availability of funds.
II. Conditions of Installment/Lease Purchase
A. Terms of Payment
The aircraft shall be payable in quarterly installments within three (3) to five (5) years, depending on the budgetary limitations of the buyer-agency set by the Commissioner of the Budget.
B. Financing Charges
The Philippine Aerospace Development Corporation (PADC) may impose a one-time financing fee not to exceed one (1) percent of the selling price not of the downpayment and further impose interest not to exceed the maximum rate allowed by the Central Bank on loans of similar terms.
C. Except for the terms provided above, the buyer-agency and the PADC shall enter into the purchase contract as free contracting parties; provisions that are normally required in the industry in the sale of the aircraft, such as warranty by seller, may be provided for in the contract.
III. System Procedures
1. Buyer-agency secures the approval of the President for aircraft acquisition, and a certification of the Budget Commission on the availability of funds.
2. The Budget Commission releases allotment to the buyer-agency and so informs the PADC.
2a. Alternatively, the PADC secures authorization from the buyer-agency for the Budget Commission to withhold budget releases for the installment payments.
3. The PADC and the buyer-agency draft a contract of sale in coordination with the Office of the Government Corporate Counsel; the respective authorized representatives sign the contract of sale.1aшphi1
4. The Head of Department of the buyer-agency approves the contract of sale.
5. The aircraft unites delivered; technical inspection is conducted by buyer-agency.
6. The Representative from the Commission on Audit makes the necessary inspection of the unit.
7. The buyer-agency pays the PADC.
7a. In case 2a. above is selected, the Budget Commission releases allotment directly to the PADC.
8. The Budget Commission requires buyer-agencies to include in their annual budgets amounts necessary to cover the payments stipulated in the contracts with PADC.
This circular shall take effect immediately.
