"SEC. 7. Authority to invest funds.—With the approval of the Department Secretary, the Board of Pensions and Retirement is hereby authorized to invest from time to time such portions of the pension and retirement fund of the Philippine Health Service as may not be required to pay existing or future authorized obligations, in any or all of the following ways and in no others:
"In interest-bearing deposits, under security approved by the Board, in any bank doing business in the United States or in the Philippine Islands, designated as a Government depository.
"In first liens upon improved, productive, and unencumbered real estates situated in the City of Manila, with a title duly registered under Act Numbered Four hundred and ninety-six, as amended: Provided, That no loan shall be made upon the security of real estate in excess of sixty per centum of its assessed value nor for a period in excess of five years, and no more than fifty per centum of the total amount of funds available for investment shall be invested in loans on productive real estate in the City of Manila.
"The Board shall have the right to foreclose any loan in the event of any material depreciation in the value of the security or if the terms of the loan contract are not complied with. It shall also make proper provision for the insurance of all property, subject to damage by fire, which shall be held by it as security. The Board shall also have the right to hold, for a period not exceeding five years, such real estate as may come into its possession on account of money loaned.
"Whenever the actual balance of the pension and retirement fund of the Philippine Health Service shall fall below fifty thousand pesos, the Board shall not grant any loan on real estate.
"The Board is authorized, in making investments pursuant to this section, to fix the terms thereof in such a way as shall preserve the funds from any loss due to depression in the medium of payment, and to take any other precautions which in its judgment are deemed necessary for the adequate conservation of said retirement fund.
"In loans to municipalities, cities, and provinces for the construction or reconstruction of schools, municipal buildings, public markets, water supply systems, sewers, and provincial capitols, subject to such conditions as the Board may deem necessary: Provided, however, That the aggregate amount of loans to any one municipality, city or province shall at no time exceed forty per centum of the total value of the improvements on which the investment is made."
"SEC. 7. The Insular Auditor or his duly authorized representative shall audit the accounts of the Board of Pensions and Retirement once a year and at any other time when so requested by the Board in writing, and for the purposes of such audit, the books, papers, letters, and documents of said Board relating to its administration shall be open to inspection by the Insular Auditor or his duly authorized representative."