Sec. 3. Pursuant to section two of this Act, the National Shipyards and Steel Corporation is authorized and empowered to construct and/or to enter into an irrevocable contract for the construction of vessels and watercrafts of not less than one hundred gross tons with any natural-born citizens of the Philippines, or any government agency, or associations or corporation organized under the law of the Philippines, one hundred per cent of the capital (or sixty - seventy-five percent) of which is owned by natural-born citizens of the Philippines which is engaged in the coastwise shipping business.

Provided, That bids first be opened inviting offers for payments in shorter terms than twenty years and in large installments. If there are two or more desiring to build, preference should be given to those who have made larger investments and contributed more to the growth of the shipping industry in the Philippines.cralaw

Sec. 4. All construction, other than of government agencies, authorized under this Act shall be upon the security of a preferred mortgage on the vessel including its equipment and the certificates or any other form of authorization for the operation of such vessel.cralaw

Sec. 5. All such funds used for the construction of the vessels or watercrafts herein contemplated shall be self-liquidating within a period not to exceed twenty years and shall bear interest at the rate of not more than four and one-half per cent per annum: Provided, however, That a down payment from owner or operator of not less than twenty per cent of the price of the vessel shall be paid upon the execution of the contract of the construction of such vessels or watercrafts: Provided, further, That such vessels shall be fully insured by the owner or operator: And provided, finally, That no right secured under this Act by the owner of the vessel shall, during the existence of the contractual agreement, be transferred or encumbered to third parties without the consent of the National Shipyards and Steel Corporation.

Sec. 6. All moneys representing payments of principal and interest on construction made pursuant to this Act shall be considered as revolving fund to be used exclusively to carry out the provisions of this Act.cralaw

Sec. 7. The National Shipyards and Steel Corporation is authorized and empowered to bid for and purchase at any foreclosure or the sale, or otherwise to acquire the vessel or watercraft, including all other equipment, certificate or authorization for the operation of such vessel, pledged or mortgaged to secure any construction expenses made pursuant to this Act, to accept title to any vessel or watercraft including all its property and equipment, certificate or authorization and to sell such vessel or watercraft and all its property, certificate or authorization for its operation, so acquired, upon such terms and for such consideration as the National Shipyards and Steel Corporation shall determine to be reasonable.

Sec. 8. The National Shipyards and Steel Corporation is empowered to issue the necessary rules and regulations to carry out the provisions and purposes of this Act subject to the limitations imposed in this Act.cralaw

Sec. 9. All laws, executive orders and regulations, or parts thereof, which are inconsistent with this Act are hereby repealed.cralaw

Section 10. This Act shall take effect upon its approval.cralaw

Approved: June 22, 1957