Loans from Funds Secured by the National Government from Foreign Sources.
Section 8
SEC. 8. Loans from Funds Secured by the National Government from Foreign Sources.—(a) The President of the Philippines, or his duly authorized representative may negotiate and contract loans with foreign financial institutions or other international organizations belonging to countries with which the Philippines has diplomatic or trade relations, or from foreign governments which are members of the United Nations and, subject to such conditions as he may impose, extend therefrom, upon recommendation of the Secretary of Finance and the National Economic and Development Authority, one or several loans to any provincial or city government through the Development Bank of the Philippines or the Land Bank of the Philippines for the purpose of financing the acquisition, construction, installation, improvement and expansion of capital improvement projects, such as electric power plants, waterworks and irrigation systems, flood control systems, sewerage systems, composting plants, the telephone and radio communications systems. Loan amortizations or repayments, including accrued interest thereon, may be financed partly from the income of the projects or services funded and from the regular income of the borrowing local government unit, which must be provided for and appropriated regularly in its budgets until the loan and the interests thereon shall have been repaid in full. The pertinent provisions of Republic Act No. 4860, as amended by Presidential Decrees Nos. 81, 150 and 351, shall likewise be complied with in the re-lending to the local governments of proceeds of loans from foreign sources. Any two or more provinces, cities and/or municipalities may jointly and severally undertake capital improvement projects commonly beneficial to them and for the purpose may negotiate and contract for loans in accordance with the provisions of the foregoing paragraphs, subject to the provisions of Letter of Instruction No. 158.