Law Summary

SECTION 1: Authorization for Investment

• Legal Principle: The National Loan and Investment Board (NLIB) is authorized to invest specific funds in advances to the National Government for constructing toll bridges.
• Key Definitions:
  • Postal Savings Bank Fund: Established under Act No. 1493 and governed by Act No. 2711, as amended.
  • Teachers' Retirement and Disability Fund: Created under Act No. 3050, as amended.
  • San Lazaro Estate Fund: Established under Act No. 2478, as amended.
• Important Requirements:
  • Investment is contingent upon a request from the Secretary of Public Works and Communications and a recommendation from the Director of Public Works.
  • Advances shall be used for the construction of permanent toll bridges.
  • Interest on the advances is fixed at five percent per annum.
• Relevant Timeframes:
  • The repayment period for the amount invested and interest is not to exceed twenty years.

SECTION 2: Payment Provisions

• Legal Principle: Establishes the payment structure for advances made under Section 1.
• Key Definitions:
  • Monthly Amortization: The minimum amount to be paid monthly on the advances and interest, as determined by the NLIB.
• Important Requirements:
  • Tolls collected must first cover the salaries of toll collectors before being applied to the amortization.
  • If tolls are insufficient to meet the monthly amortization and interest, the National Government is responsible for covering the deficiency.
• Relevant Timeframes: None specified; ongoing payment obligations as long as the toll bridges operate.
• Consequences:
  • The National Government is appropriated necessary funds from the Philippine Treasury to address any deficiencies in payments.

SECTION 3: Effectivity

• Legal Principle: This Act shall take effect upon its approval.
• Important Requirements: None specified beyond the approval date.

Key Takeaways

• Commonwealth Act No. 112 authorizes the NLIB to invest the Postal Savings Bank Fund, Teachers' Retirement and Disability Fund, and San Lazaro Estate Fund in the construction of toll bridges with specific conditions regarding interest and repayment.
• The National Government guarantees payment for any shortfalls in toll revenue used for amortization.
• The Act is effective immediately upon approval, underscoring its immediate applicability to fund infrastructure development initiatives.