SEC. 7. Capilatization.&mdashThe authority shall have an authorized capital of one hundred and fifty million pesos which shall be fully subscribed and paid up by the Republic of the Philippines and authorized to be appropriated out of the general fund in the National Treasury not otherwise appropriated, and from the proceeds of loans, bonds issues, and other sources of income of the National Government and included in the General Appropriations Act every year for a period of ten years from the approval of this Act and shall be paid out according to the schedule as follows:
The sum of thirty million pesos upon the approval of this Act;
The sum of thirty million pesos for the succeeding fiscal year;
The sum of twenty million pesos for the third year;
The sum of twenty million pesos for the fourth year;
The sum of ten millionpesos for the fifth year;
The sum of ten million pesos for sixth year;
The sum of ten million pesos for the seventh year;
The sum of ten million pesos for the eight year;
The sum of five million pesos for the ninth year;
The sum of five million pesos for the tenth year.
The authorized capital of one hundred and fifty million pesos shall constitute a revolving fund for financing the projects and other transactions and operations of the Authority except as herein provided.
SEC. 8. Operating Expenses.&mdashUpon its organization, the Board of Directors of the Authority may appropriate out of the Authority's paid in capital for its operating and overhead expenses for the fiscal year a sum of not exceeding one million pesos and for the succeeding years the Authority may appropriate for such overhead and operating expenses an amount not exceeding one million pesos for each fiscal year: Provided, That the appropriation for such overhead or operating expenses may be made to exceed one million pesos upon resolution of the Board of Directors and approved by the President of the Philippines: And provided, further,That the unexpended balance of the appropriation for such expense shall, at the end of the fiscal year automatically revert to the said revolving fund including whatever earnings the Authority may have.
SEC. 9. Exemption from Tax.&mdashThe Authority shall be exempted from all taxes of both local and national origin in all its activities and operations incidental to the exercise of its powers and in the performance of its functions, including taxes imposed on the sale, purchase or transfer of foreign exchange, bonds, debentures, securities or other evidences of indebtedness both as to principal and interest: Provided,That its subsidiary corporations shall be subject to all said taxes after their establishment under a graduated scale as follows: twenty per centum of all said taxes during the sixth year, forty per centum of all said taxes during the seventh year, sixty per centum of all said taxes during the eighth year, eighty per centum of all said taxes during the ninth year and one hundred per centum of all said taxes during the tenth year, after said establishment.
SEC. 10. Sinking Fund.&mdashThere shall be established a sinking fund in such a manner that the annual contribution thereto, accrued at such rate of interest as may be determined by the Secretary of Finance in consultation with the Monetary Board, shall be sufficient to redeem at maturity the bonds issued under this Act. The Central Bank of the Philippines shall keep said fund in custody and shall invest the same in such manner as the Monetary Board may approve, charging all expenses of such investment and crediting interest or other earnings thereon and other income belonging to the said sinking fund.
Provided,That administrative expenditures of the Central Bank, while administering the fund of the Agency, shall be chargeable against the earnings of the fund:And provided, further,That fees charged shall be based on the percentage earnings of the interests.
SEC. 11. Guarantee of payment by the Republic of the Philippines.&mdashThe Republic of the Philippines hereby guarantees the payment by the Authority of both the principal and interest of bonds, debentures, notes and other certificates of indebtedness or obligations issued by the Authority under this Act. In case the Authority shall be unable to pay the bonds, debentures and such other obligations, the Secretary of Finance shall pay the amount thereof out of the funds hereby appropriated for this purpose in the National Treasury not otherwise appropriated, and there-upon, the Republic of the Philippines shall succeed to all the holders of such bonds, debentures, notes or such other obligations hereinbefore mentioned, to the extent of the amounts so paid, unless the Authority, within a reasonable time makes a refund of the amount paid by the Republic of the Philippines.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
