Section 4
SEC. 4. Whenever the Board may deem it necessary for the Corporation to incur an indebtedness or to issue bonds to carry out the purposes for which the Corporation has been organized, it shall, by resolution, so declare and state the purpose for which the proposed debt is to be incurred and the conditions of the bonds. In order that such resolution be valid, it shall be passed by the affirmative vote of approval at least three members of the Board and approved by the President of the Philippines upon the recommendation of the Secretary of Finance. The bonds shall be issued under the following conditions: (a) they shall be in registered form and transferable at the office of the Treasurer of the Philippines in Manila or at the Registry Office of the Department of the Treasury of the United States at Washington, District of Columbia; (b) they shall not be sold at less than par; (c) they shall be payable thirty years after the date of issue but may be redeemable, at the pleasure of the Board, after ten years from the date of issue; (d) they shall bear interest at an annual rate to be determined before their issuance by the Secretary of Finance; (e) the interest may be payable quarterly, semi-annually or annually as may be determined by the Secretary of Finance before the issuance of the bonds; and (f) both principal and interest shall be payable in gold coin or its equivalent, in the discretion of the Secretary of Finance, in Manila, if the bonds are sold in the Philippines or in the United States Treasury if they are sold in the United States. The bonds issued under: the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines, or by any authority, branch, division or political subdivision thereof and subject to the provisions of the Act of Congress, approved March 24, 1934, otherwise known as the Tydings-McDuffie Law, which facts shall be stated upon the face of said bonds. Said bonds shall be receivable as security in any transaction with the Government in which such security is required. A sinking fund shall be created, the total whereof at each annual due date of the bonds shall be equal to the total of an annuity of nineteen thousand three hundred seventy-one pesos and thirty-three centavos for each one million pesos of bonds outstanding, with interest at the rate of three and one-half per centum per annum. The custody sinking funds shall be under the custody of the Treasurer of the Philippines, who shall invest the same subject to the approval of the Board and the Secretary of Finance. The Commonwealth of the Philippines hereby guarantees the payment by the National Power Corporation of both the principal and the interest of the bonds issued by said Corporation by virtue of this Act, and shall pay such principal and interest in case the National Power Corporation fails to do so, and there are hereby appropriated, out of the general funds in the Philippine Treasury not otherwise appropriated, the sums necessary to make the payments guaranteed by this Act: Provided, That the sums so paid by the Commonwealth of the Philippines shall be refunded by the National Power Corporation.