Section 7August 22, 1991, Sec./Art. 7

Investment Instrument. – The participatory debt reduction certificate (PDRC) shall be a negotiable government security guaranteed by the Republic of the Philippines to be issued in any of the following denominations: US$ 100, $200, $300, $400, $500, $1,000 and $2,000, redeemable in Philippine pesos at the full value of the Central Bank buying rate one (1) day prior to redemption. It shall automatically bear an interest rate which shall be reckoned based on the quarterly average of the London Interbank Offered Rates (LIBOR) plus one percent (1%), to be determined at the end of each quarter but payable at the end of each semester, and shall have a maturity of five (5) years from the date of issuance.

The PDRC shall incorporate a tax-free premium over and above the face value of the same certificate, the percentage of which shall be fixed at one-half (1/2) of the numerical value of the discount of the purchased debt papers at the time of the remittance. The premium shall not earn interest.

The holder of a PDRC shall be entitled to receive in cash one-fifth (1/5) of the premium rate, which shall be stamped on the PDRC upon issuance, at the end of every one (1) full year from the date of issue of the certificate.

The PDRCs shall be directly and immediately released/delivered to the beneficiaries.

At the option of the remitting worker or his beneficiary in the Philippines, the PDRC may be exchanged for cash at face value at the official exchange rate with any of the accredited financial institutions, used as collateral for loans with concessional interest rates, sold to any investor, or kept to earn market interest rates.