Inter-Local Government Loans.
Section 7
SEC. 7. Inter-Local Government Loans.—Provinces, cities and municipalities may extend loans to other provinces, cities and municipalities for such public purposes as the repair and rehabilitation of government property damaged by typhoons, floods, fire, or other natural calamity; the purchase of relief goods, foodstuff and medicine during emergencies; and the beautification of parks, plazas, monuments and shrines in amounts not exceeding, in their aggregate, five per cent of the general fund income from regular sources of the lending entity actually realized during the next preceding fiscal year, as certified to by the local treasurer and attested by the auditor concerned, under such terms and conditions as may be agreed upon by the parties, payable within a period of not exceeding twenty-four months from the date of release of the full amount and at an interest rate of not exceeding twelve per cent per annum. Failure of the borrowing local government to appropriate the annual amortizations and interest accruals of, the loans contracted under this Section shall constitute a ground for declaring in operative its budgets pursuant to the pertinent provisions of Presidential Decree No. 477.