Section 3
SEC. 3. The President of the Philippines is, likewise, hereby authorized, in behalf of the Republic of the Philippines, to guarantee, upon such terms and conditions as may be agreed upon, foreign loans extended directly to, or bonds for sale in international markets issued by, corporations owned or controlled by the Government of the Philippines for industrial, agricultural or other economic development purposes or projects authorized by law, such as those mentioned in Section one of this Act, including the rehabilitation and modernization of the Philippine National Railways, the cash capital requirements of the Land Bank, electrification, irrigation, river control and drainage, telecommunication, housing, construction and/or improvement of highways, airports, ports and harbors, school buildings, waterworks and artesian wells, air navigation, development of the fishing industry, iron and nickel exploitation and development, and others: Provided, That at least seventy-five per cent shall be spent for purposes or projects which are revenue-producing and self-liquidating. The loans and/ or bonded indebtedness of government-owned or controlled corporations which may be guaranteed by the President under this Act shall include those incurred by government-owned or controlled financial institutions for the purpose of re-lending to the private sector and the total amount thereof shall not be more than five hundred million United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the guarantee is made: Provided, That the government-owned or controlled financial institutions shall relend the proceeds of such loans and/ or bonded indebtedness to Filipinos or to Filipino-owned or controlled corporations and partnerships, at least sixty-six and two-thirds per centum of the outstanding and paid-up capital of which is held by Filipinos at the time the loan is incurred, such proportion to be maintained until such time as the loan is fully paid: Provided, however, That during anytime that any amount of the loan remains outstanding, failure to meet with the capital ownership requirement shall make the entire loan immediately due and demandable, together with all penalties and interests, plus an additional special penalty of two per centum on the total amount due.