Domestic Loans, Credits, and Other Forms of Indebtedness.
Section 4
SEC. 4. Domestic Loans, Credits, and Other Forms of Indebtedness.—(a) Provincial, city and municipal governments may upon recommendation of the Secretary of Finance contract loans, credits, and other forms of indebtedness with the Philippine National Bank, the Development Bank of the Philippines, the Government Service Insurance System, and/or any other national lending institution to finance the construction, installation, improvement, expansion, operation, or maintenance of electric light and power plants, public markets and slaughterhouse, waterworks and irrigation systems, telephone and radio communications systems, government housing projects, the purchase of rural and urban estates and other capital investment projects, subject to such terms and conditions as may be prescribed by law and the provisions of the respective charters of the aforesaid banks and lending institutions. Provincial, city and municipal governments may likewise secure from the Land Bank of the Philippines short, medium and long term loans and advances against security of real estate and/or other acceptable assets for the establishment, development or expansion of agricultural industrial, home building or home financing projects and other productive enterprises. The Philippine National Bank, the Development Bank of the Philippines, the Government Service Insurance System, the Land Bank of the Philippines and other national lending institutions are hereby authorized to grant to the local governments the loans, credits and other forms of indebtedness herein referred to for the purposes specified above out of their loanable and/or investible funds, subject to such terms and conditions as may be prescribed by law and the pertinent provisions of their respective charters and to such policies, rules and regulations that their governing Boards may promulgate for the purpose. The provincial, city and municipal governments shall provide in their respective budgets the necessary appropriations for the payment of the principal and interest on the loans or other forms of indebtedness contracted under this Section as they fall due and become payable until the total obligation shall have been paid in full.