Section 6
SEC. 6. Operating Principles. The operations of the Corporation shall be conducted in accordance with the following principles: (a) The operations of the Corporation shall principally facilitate foreign OR DOMESTIC loan financing of specific projects, AS WELL AS THE IMPLEMENTATION OF APPROVED SERVICE CONTRACTS ABROAD WITH NET FOREIGN EXCHANGE EARNING POTENTIALS, ENTERED INTO BY DOMESTIC ENTITIES, ENTERPRISES OR CORPORATIONS. They may, however, include guarantee and counter-guarantees of (1) foreign loans made by banks or other financial institutions or suitable entities in order that the latter may finance specific development projects either by outright loan or guarantees; (2) DOMESTIC LOANS GRANTED BY PHILIPPINE BANKS AND FINANCIAL INSTITUTIONS TO QUALIFIED EXPORTERS, PRODUCERS OF EXPORT PRODUCTS, AND CONTRACTORS WITH APPROVED SERVICE CONTRACTS ABROAD; AND (3) LETTERS OF CREDIT AND/OR LETTERS OF GUARANTEE ISSUED BY BANKS AND FINANCIAL INSTITUTIONS TO SECURE THE PERFORMANCE OF SERVICE CONTRACTS ABROAD ENTERED INTO BY DOMESTIC ENTITIES, ENTERPRISES OR CORPORATIONS. (b) In considering an application for a guarantee, the Corporation shall pay due regard to the ability of the borrower to obtain guarantee facilities elsewhere on terms and conditions that the Corporation considers reasonable for the recipient, taking into account all pertinent factors; (c) In guaranteeing a loan OR A STANDBY LETTER OF CREDIT OR LETTER OF GUARANTEE, the Corporation shall pay due regard to the prospect that the borrower OR THE SERVICE CONTRACTOR will be in a position to meet its obligations under the loan/SERVICE CONTRACT; (d) In guaranteeing a loan OR STANDBY L/C OR LETTER OF GUARANTEE IN FAVOR OF A SERVICE CONTRACT, or in underwriting the sale of securities, the Corporation shall receive suitable compensation for its risks; (e) The corporation shall take the necessary measures to ensure that the proceeds of any loan guaranteed by the Corporation are used only for the purposes for which the loan was granted and with due attention to considerations of economy and efficiency; (f) The Corporation shall not guarantee a single borrower OR STANDBY L/C OR LETTER OF GUARANTEE IN FAVOR OF A SINGLE SERVICE CONTRACTOR in an amount exceeding the Corporation’s subscribed capital stock, nor shall the aggregate outstanding guarantee obligations of the Corporation exceed fifteen (15) times its subscribed capital stock plus surplus; (g) When payment is made by the Corporation pursuant to a guarantee it has made, the Corporation shall be subrogated to any right, title, claim, or cause of action belonging to the creditor OR SERVICE CONTRACTOR. (h) The Corporation shall be guided by sound banking principles and sound financial management in its operations.