Law Summary
Transfer of City Bonds to the National Government and Bond Fund Establishment
- President is authorized to convey and transfer the city bonds to the Republic of the Philippines.
- The transfer is considered a sale, charged against proceeds of equivalent national government bond sales.
- Proceeds from the transfer will be deposited with the Central Bank of the Philippines.
- Funds credited to an Expropriation Bond Fund specific to the City of Manila.
- Withdrawals from the fund are only for expropriation payments and require Secretary of Finance's authorization.
Issuance and Terms of National Government Bonds Secured by City Bonds
- The Republic of the Philippines, through the President, may issue three million pesos in bonds for ten years payable in equal annual installments.
- These bonds are secured by City of Manila bonds transferred to the National Government.
- The President determines the bonds’ form, issue date, interest rates (not exceeding six percent per annum), and interest payment dates.
- Bonds may be coupon or registered, registered in the Central Bank, payable in pesos or US dollars.
- Sale of these bonds will be by public auction through the Central Bank under terms favorable to the Republic.
- Proceeds from the bond sales are deposited with the Central Bank for the National Government’s credit.
Appropriation of Proceeds for Payment of City Bonds
- Proceeds from the sale of the national government bonds are appropriated to pay the City of Manila bonds used as security.
Taxation Exemption on Issued Bonds
- Both the City of Manila bonds and national government bonds issued under this Act are exempt from taxation by the Republic and any political or municipal subdivision.
Establishment of a Sinking Fund for Bond Redemption
- A sinking fund shall be established to ensure sufficient annual contributions for full redemption of bonds at maturity.
- The fund will accumulate interest and income, managed by the Central Bank.
- The Central Bank invests the fund under approval by the Monetary Board and deducts investment expenses from the fund.
Annual Appropriations for Sinking Fund, Interest, and Bond Issuance Expenses
- Standing annual appropriation from the National Treasury’s general fund to support the sinking fund and bond interest payments.
- Additional appropriations cover expenses related to bond issuance and sale.
Secretary of Finance’s Authority Over Issuance-Related Expenses
- Secretary of Finance or Central Bank may purchase materials, order printing, advertising, and other services needed for bond issuance, servicing, and redemption.
Effectivity Clause
- The Act takes effect immediately upon approval on June 18, 1954.