Section 7
SEC. 7. Section eighty of the same Act is hereby amended to read as follows: "SEC. 80. Modes of Payment. The Bank shall finance the acquisition of farm lots under any of the following modes of settlement: "1. Cash payment of 10% and balance in 25-year tax-free 6% Land Bank bonds; "2. Payment of 30% in preferred shares of stock issued by the Bank and balance in 25-year tax-free 6% Land Bank bonds; "3. Full guarantee on the payment of the fifteen (15) equal annual amortizations to be made by the tenant/farmer; "4. Payment through the establishment of annuities or pensions with insurance; "5. Exchange arrangement for government stocks in government-owned or controlled corporations or private corporations where the Government has holdings; "6. Such other modes of settlement as may be further adopted by the Board of Directors and approved by the President of the Philippines. "In the event there is existing lien or encumbrance on the land in favor of any Government lending institution at the time of acquisition by the Bank, the landowner shall be paid the net value of the land (i.e., the value of the land determined under Presidential Decree No. 27 minus the outstanding balance/s of the obligation/s secured by the lien/s or encumbrance/s), and the outstanding balance/s of the obligations to the lending institution/s shall be paid by the Land Bank in Land Bank bonds or other securities, existing charters of those institutions to the contrary notwithstanding. A similar settlement may be negotiated by the Land Bank in the case of obligations secured by liens or encumbrances in favor of private parties or institutions. "Whenever the Bank pays the whole or a portion of the total cost of farm lots, the Bank shall be subrogated by reason thereof, to the right of the landowner to collect and receive the yearly amortizations on farm lots or the amount paid including interest thereon, from tenant-farmers in whose favor said farm lots had been transferred pursuant to Presidential Decree No. 27, dated October 21, 1972. "The profits accruing from payment shall be exempt from tax on capital gains."