Local Government Code of 1991
Section 300. Inter-Local Government Loans, Grants, and Subsidies. - Provinces, cities, and municipalities may, upon approval of the majority of all members of the sanggunian concerned and in amounts not exceeding their surplus funds, extend loans, grants, or subsidies to other local government units under such terms and conditions as may be agreed upon by the contracting parties.
Local government units may, upon approval of their respective sanggunian, jointly or severally contract loans, credits, and other forms of indebtedness for purposes mutually beneficial to them.