Section 7Sec./Art. 7

Capitalization of Home Insurance Guaranty Corporation (HIGC).- The authorized capital stock of the HIGC is hereby increased from One billion pesos (₱1,000,000,000) to Two billion five hundred million pesos (₱2,500,000,000) to strengthen the capability of the Corporation in the provision of guarantee, loan/credit insurance and other incentives to assist home building/development and to sustain housing finance:Provided, however,That the aggregate amount of the outstanding guaranty obligations shall not, at any one time, exceed twenty (20) times the capital and surplus of the HIGC.

Accordingly, Sections 3 and 5 of Executive Order No. 535 are hereby amended to read as follows:

"Section 3. The authorized capital of the Corporation shall be Two billion five hundred million pesos (₱2,500,000,000), divided into two million five hundred thousand (2,500,000) shares of common stocks, with a par value of One thousand pesos (₱1,000) per share to be fully subscribed and paid by the Government of the Republic of the Philippines."

"There shall be a continuing annual appropriation of at least Three hundred million pesos (₱300,000,000) starting 1995 and subsequently thereafter until the entire authorized capital stock of the Corporation shall have been paid in full."

"Section 5. The Republic of the Philippines hereby guarantees to payment by the Corporation both of the principal sums and interests of the bonds, debentures, collateral, notes or other such obligations of the Corporation, issued or incurred by virtue of its Charter and this Executive Order and shall pay such principal sums and interest in the event that the Corporation fails to do so:Provided, however, That the aggregate amount of the outstanding obligations shall not, at any one time, exceed twenty (20) times the capital and surplus of the Corporation."

"In such event, the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures, collateral, notes or other instruments to the extent of the payments made, unless the sums so paid by the Republic of the Philippines shall be refunded by the Corporation within a reasonable time."