Foreign Loans Authorization Act

The total principal amount of loans or indebtedness authorized is capped at one billion US dollars or equivalent in foreign currencies.
Annual borrowing limits are set at 250 million US dollars per fiscal year.
Loans must be project-specific and approved per the government’s economic program.
Project plans require preparation by relevant agencies, recommendation by the National Economic Council and Central Bank Monetary Board, and approval by the President.

The President is authorized to guarantee foreign loans or bonds issued by government-owned or controlled corporations for similar development purposes.
Eligible projects include rehabilitation, modernization, and economic development areas detailed in Section 1.
At least 75% of funds guaranteed must be spent on revenue-generating and self-liquidating projects.
Guarantees cover loans by government financial institutions for relending to the private sector, limited to an aggregate of 500 million US dollars.
Loans guaranteed for relending must be extended to Filipino-owned or controlled corporations with at least 66 2/3% Filipino ownership, which must be maintained while the loan is outstanding.
Failure to maintain ownership structure results in immediate loan demand, penalties, interest, and a 2% special penalty on total due.

Implementation follows procedures under Executive Order No. 236 (1957) relating to development finance planning, government securities issuance, fund disbursement, and creation of oversight councils.
Executive Order No. 26 (1966) amendments are recognized so long as consistent with this Act.

The President must report to Congress within 30 days from the opening of each regular session.
Reports must detail amounts borrowed, guarantees extended, purposes and projects financed, and any loans reloaned to Filipino entities.

Congress is tasked to appropriate necessary funds from the National Treasury to meet principal and interest payments on these foreign loans and indebtedness when due.