The Act is hereby amended by adding Section 25 which shall read as follows: "SEC. 25. Foreign Loans.
Section 2
SECTION 2. The Act is hereby amended by adding Section 25 which shall read as follows: "SEC. 25. Foreign Loans. — The Corporation is hereby authorized to contract loans, credits in any convertible foreign currency or capital goods, and indebtedness from time to time from foreign governments, foreign banks or any international financial institutions or fund sources, or to issue bonds, on such terms and conditions as it shall deem appropriate for the accomplishment of its purposes and to enter into and execute agreements and other documents specifying such terms and conditions. The loans, credits, and indebtedness contracted under this Section by the grantee, and the payment of the principal, interests, and other charges thereon shall be exempt from withholding tax provided that the liability for the payment of the taxes on such interests and other charges has been assumed by the grantee. The Republic of the Philippines hereby guarantees payment of both the principal and the interest of the foreign loans, bonds, debentures, collaterals, notes or such other obligations issued or incurred by the grantee by virtue of the preceding paragraph and shall pay such principal and interest in case the grantee fails to do so. In such event, the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collaterals, notes or other instruments to the extent of the payment made, unless the sum so paid by the Republic of the Philippines shall be refunded by the grantee within a reasonable time".