Practice question
After a destructive typhoon, advisers propose that the President immediately guarantee a foreign lender's loan to an infrastructure company on behalf of the Republic. The documents would commit the Republic as guarantor. No prior Monetary Board concurrence has been obtained. The advisers say Section 20 applies only when the Republic directly receives the borrowed cash and therefore does not reach a guarantee. Assume no other relevant exception or issue. Which response correctly applies the provision?
- The guarantee is outside Section 20 simply because the company receives the cash.
- The President's constitutional guarantee power is expressly unconditioned.
- Section 20 applies only to domestic-currency loans.
- The Monetary Board's role is replaced by the company's board of directors.
- The argument fails because Section 20 expressly covers guaranteeing foreign loans on behalf of the Republic as well as contracting them.
Legal references
- 1987 Constitution, Article VII, Section 20: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/3/353
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