Loans and credit accommodations authorized.
Section 6
SECTION 6. Loans and credit accommodations authorized. - The Philippine National Bank is hereby authorized: To purchase, discount or negotiate promissory notes, drafts, bills of exchange and other evidences of debt issued or drawn for agricultural, export, industrial, commercial and other allied purposes with collaterals required by the Bank, or the proceeds of which have been used or are to be used for such purposes; To grant loans on, or to discount notes secured by harvested and stored crops: Provided, That no loan on the security of such harvested and stored crops shall exceed eighty per centum of the fair market value thereof on the date of the loan: Provided, further, That the crops used as collateral shall be insured for the benefit of the Bank for their entire market value; and Provided, finally, That if owing to any circumstances whatever, the value of the crops given as security shall diminish, the debtor and/or mortgagor shall obligate himself to furnish additional security or refund such part of the loan as the Bank may demand. The maturity of such loans shall not exceed one year subject to extension, in the discretion of the Bank; To grant loans for the production of rice, corn and other grains, cotton, hemp, coconut, sugar, banana, tobacco, maguey and other agricultural produce, not in excess of seventy per cent (70%) of the estimated value of the production: Provided , however, that before granting such loans, the Bank may require additional securities in the nature of mortgages on real estate duly registered in the name of the debtor and/or accommodation mortgagor, or chattel mortgage, including those upon livestock, machinery and agricultural implements, or personal bonds with sufficient surety or sureties, satisfactory to the Bank. To grant medium-term or long-term loans and advances against security of real estate and/or other acceptable assets for the establishment, rehabilitation or expansion of agricultural, export, industrial and other productive enterprises; To grant loans against personal security, or against security consisting of personal property or first mortgages on improved real estate and the insured improvements thereon; To make loans to any branch, subdivision or agency of the Republic of the Philippines or to government owned or controlled corporations, subject to the conditions that such loans should be for productive, revenue producing, or socio-economic projects pursuant to the priorities established in the development program, as certified to by the National Economic Development Authority, in an amount within the borrowing entity's paying capacity, duly guaranteed by the National Government through the Secretary of Finance upon authority of the President of the Philippines with respect to principal, interest and other charges: Provided, however, that loans covered by government guarantees shall not exceed the ceiling prescribed by the Monetary Board: Provided, finally, That such ceiling on government guarantees shall exclude loans to government corporations with acceptable collateral. However, such loans to government corporations shall nonetheless be subject to the lending ceiling on loans to government agencies and entities provided for in paragraph d of Section 7.