Section 5
SEC. 5. Loans and investments authorized—Total liabilities of a single borrower—Additional liabilities and security required.—Said National Bank is hereby authorized: To purchase or discount promissory notes, drafts and bills of exchange issued or drawn for agricultural, industrial or commercial purposes, with the securities required by the Bank, or the proceeds of which have been used or are to be used for such purposes. To make 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 market value thereof on the date of the loan: Provided, further, That the crops so mortgaged shall be insured by the mortgagor for the benefit of the National Bank for their entire market value: And provided, finally, That if, owing to any circumstance whatever, the value of the crops given as security shall diminish, the mortgagor shall obligate himself to furnish additional security or refund such part of the loan as the Bank may leem necessary. Such loans shall be granted for a period of not to exceed one year, subject to extension, in the discretion of the Bank. To make loans to agriculturists in installments, on standing crops of the natural products of the Philippines such as rice, hemp, copra, sugar, tobacco, corn, maguey, etc., not in excess of seventy per centum of the estimated value of such crops: Provided, however, That before granting such loans, the National Bank may require additional security in the nature of mortgages on real estate duly registered in the name of the debtor, or chattel mortgage, including those upon livestock, machinery, and agricultural implements, or personal bonds with sufficient surety or sureties, satisfactory to the Bank. To make loans to the several provincial and municipal governments and to any other branch or subdivision of the Republic of the Philippines on promissory notes guaranteed by the National Government, as shown by the endorsement thereon of the Secretary of Finance, approved by the President of the Philippines or to purchase bonds lawfully issued by such provincial and municipal governments and any other branch or subdivision of the Government of the Philippines, Generally, to make advances or discount paper for agricultural, manufacturing, industrial, or commercial purposes: Provided, That loans, discounts or advances made under this section shall have maturities not exceeding one year, renewable from year to year, in the discretion of the Bank. The aggregate amount of loan for any single industry shall at no time exceed twenty per cent of the Bank's lending capacity. The total liabilities to the Bank of any person, or of any company, corporation, or firm for money borrowed, including in the liabilities of the company or firm, the liabilities of the several members thereof, shall at no time exceed fifteen per centum of the unimpaired capital and surplus of the Bank. But the discount of bills of exchange drawn in good faith against actually existing values and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as money borrowed, and in addition to the fifteen per centum of the unimpaired capital and surplus of the Bank, hereinbefore provided for, the total it of any borrower may amount to a further fifteen per centum of the unimpaired capital and surplus of the provided such additional liabilities are secured by shipping documents, warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable stocks, when such staples are fully covered by insurance and when such staples have a market value equal to at least one hundred twenty-five per centum of such additional liabilities. The Bank shall not make any loan upon, the stock of any other corporation as collateral if the aggregate market value of all such stock held as collateral exceeds an amount equal to fifteen per centum of the unimpaired capital stock and surplus of the Bank. The term "loan" whenever used in this Act shall include overdrafts and the limitations contained in this section shall apply to any loan of any kind whenever secured wholly or partly by real estate mortgage. BOARD OF DIRECTORS—COMPOSITION AND ORGANIZATION