Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Sections one, two and eight of Republic Act Numbered Three hundred and four are hereby amended to read as follows:

"SECTION 1. Except as herein provided, the right of all officers, employees and persons under contract with the Government of the Commonwealth of the Philippines who on the eighth day of December, nineteen hundred forty-one, were serving in the classified or unclassified service of the national, provincial, city or municipal governments, including the University of the Philippines and the corporations owned or controlled by the Government as well as elective provincial and municipal officials who heldover in their respective offices after the termination of the term of their office, to such of their respective salaries emoluments, fees, per diems, compensations or wages as have not been received by them by reason of the war, and those of the free local civil governments, provincial and municipal, duly organized for purposes of resistance against the enemy, corresponding to the period from January first, nineteen hundred and forty-two, up to and including February twenty-sixth, nineteen hundred and forty-live or any portion of such period or before and subsequent thereto, when they were in operation, as hereinbelow provided is, under the conditions provided in this Act, hereby recognized. The recognition herein provided shall not extend to the salaries and wages of: (a) Officers and enlisted personnel of the United States Army or Navy and commissioned officers of the United States Coast and Geodetic Survey and the United States Public Health and Quarantine Service on detail with the Government of the Commonwealth of the Philippines; (b) Officers and employees found guilty after due trial in such cases made and provided by law, of treason, espionage, or any act constituting disloyalty to the Government of the Philippines or of the United States committed at any time during the enemy or Japanese occupation of the Philippines unless pardoned or granted amnesty; and (c) Officers and employees who received salaries from the Refugee Government of the Commonwealth of the Philippines in the United States of America or elsewhere. Officers or employees who died on or before the date of the liberation of the province or city where assigned on the date of the occupation, but not later than February twenty-sixth, nineteen hundred and forty-five, shall have right to such salaries or wages under the conditions referred to in this section, up to the of their death, if determinate, or the date they were last seen alive. The right to salaries or wages herein authorized shall be computed from the day of the occupation o each province or city by the Japanese up to the date of liberation thereof, the date of occupation or liberation, as the case may be, of the capital to be deemed as the date of the occupation or liberation of the province respectively.

"SEC. 2. The Treasurer of the Philippines shall, upon application, and within one year from the approval of this Act, and under such rules and regulations as may be promulgated by the Secretary of Finance, acknowledge and file requests for the recognition of the right to the salaries or wages as provided in section one hereof, and notice of such acknowledgment shall be issued to the applicant which shall state the total amount of such salaries or wages due the applicant, and certify that it shall be redeemed by the Government of the Philippines within ten years from the date of their issuance without interest: Provided, That upon application and subject to such rules and regulations as may be approved by the Secretary of Finance, a certificate of indebtedness may be issued by the Treasurer of the Philippines covering the whole or a part of the total salaries or wages the right to which has been duly acknowledged and recognized, provided that the face value of such certificate of indebtedness shall not exceed the amount that the applicant may need for the payment of (1) obligations subsisting at the time of the approval of this Act for which the applicant may directly be liable to the Government or to any of its branches or instrumentalities, or the corporations owned or controlled by the Government, or to any citizen of the Philippines, or to any association or corporation organized under the laws of the Philippines, who may be willing to accept the same for such settlement; (2) his taxes; (3) government hospital bills of the applicant; (4) land purchased by him from the public domain; and (5) any amount received by the applicant as gratuity or pension which he has to refund to the Government or to any of its branches or instrumentalities: Provided, further, That such settlement shall be effected by indorsement on the instrument: Provided, furthermore, That no certificate shall be transferred or ceded by indorsement more than once nor at a discount rate exceeding two per centum per annum: And provided, also, That any person who is not an alien, bank, or other financial institution at least sixty per centum of whose capital is owned by Filipinos may, notwithstanding any provision of its charter, articles of incorporation by-laws, or rules and regulations to the contrary, accept or discount at not more than three and one-half per centum per annum for ten years a negotiable certificate of indebtedness which shall be issued by the Treasurer of the Philippines upon application by a holder of a back pay acknowledgment: Provided, finally, That if certificates of indebtedness have been issued to an officer or employee, his back pay at the end of ten years from the date of the approval of this Act shall be equal to the amount due him under the provisions of this Act minus the full and total face value of the certificates of indebtedness issued to him in the interim. Failure to file the application within the time herein provided for will forfeit whatever right there may be to any back salary or wage which otherwise should have been due the applicant.

"SEC. 8. A sinking fund is hereby created for the settlement of the registered rights to back pay recognized under the provisions of this Act or the redemption of the certificate of indebtedness issued thereunder, in such manner that the annual installments thereto, plus interest at the rate of five per centum per annum, shall equal the total face value of the registered back pay rights, the latter including all outstanding certificates of indebtedness issued thereunder. Such sinking fund shall be under the custody of the National Treasurer who shall invest it to earn not less than five per centum with either the Philippine National Bank, the Rehabilitation Finance Corporation, Government Service Insurance System, or any other banking or investment institution under the control of the National Government: Provided, That beginning with the fiscal year nineteen hundred and fifty-two, the standing annual appropriation provided for in section nine shall be used to effect partial payment of back pay certificates of indebtedness in an amount equivalent to one-tenth (1/10) of the back pay rights originally acknowledged which in no case shall exceed one thousand pesos annually and said payment to continue until the total back pay shall have been fully satisfied: And provided, further, That certificates of indebtedness, which shall hereafter be issued and assigned for the payment of taxes and hospital bills pursuant to the provisions of this Act, are hereby authorized to be redeemed out of the appropriation provided for in section nine, any provision of this Act to the contrary notwithstanding."

SEC. 2. Officers and enlisted men of the Armed Forces of the Philippines entitled to the benefits of Republic Act Numbered Three hundred and four, but who have not filed their application within the period set forth in section two thereof, shall do so within one year from the approval of this Act.

SEC. 3. This Act shall take effect upon its approval.

Approved, June 21, 1952.