Establishment and Management of a Sinking Fund
- A sinking fund shall be created to ensure the redemption of bonds at maturity.
- Annual contributions shall be sufficient for redemption, accruing interest as determined by the Secretary of Finance and Monetary Board.
- The Central Bank of the Philippines shall manage the sinking fund and invest it with approval from the Monetary Board.
- Investment expenses shall be charged to the sinking fund; interest income and other earnings credited to it.
Appropriations for Sinking Fund, Interest, and Expenses
- Standing annual appropriation from the National Treasury's general fund shall cover the sinking fund contributions and interest on bonds.
- Sinking fund and interest payments may come from special funds created by bond-financed projects.
- For revenue-producing projects, payments shall come from net project income or toll collections.
- Only if project receipts are insufficient shall payments be made from the annual general fund appropriation.
- Additional appropriation shall be made for expenses related to bond issuance and sale.
Authority to Manage Bond Issuance Logistics
- The Secretary of Finance or the Central Bank as agent may purchase materials and services necessary for the issuance, placement, sale, servicing, redemption, or payment of bonds.
Congressional Oversight Committee
- A committee of three Senators and three Representatives is appointed to review and approve projects financed by bond issues.
- The committee may function during Congressional recesses and must report its findings and recommendations to Congress.
Presidential Reporting Requirement
- The President must submit an annual report to Congress within thirty days from the opening of Congress on the progress of projects financed by the bond issues.
Effectivity
- The Act took effect immediately upon approval on June 12, 1954.