Implementing Guidelines of Certain Provisions of Republic Act (RA) No. 11494, or the "Bayanihan to Recover as One Act," Concerning Local Finance and Treasury Operations of Local Government Units (LGUs)

November 6, 2020 BLGF MEMORANDUM CIRCULAR NO. 017-20 TO : All BLGF Central and Regional Directors; All Provincial, City and Municipal Treasurers; and Others Concerned SUBJECT : Implementing Guidelines of Certain Provisions of Republic Act (RA) No. 11 494, or the "Bayanihan to Reco ver as One Act," Concerning Local Finance and Treasury Operations of Local Government Units (LGUs) In accordance with RA No. 11494 and pursuant to the Memorandum from Executive Secretary Salvador C. Medialdea dated 23 October 2020, entitled " Implementation of Temporary Emergency Response and Recovery Measures under Republic Act (RA) No. 11494, Otherwise Known as the Bayanihan to Recover as One Act ," copy hereto attached, the following Implementing Rules and Regulations (IRR) of RA No. 11494, relative to COVID-19 response and recovery interventions concerning local finance and treasury operations are hereby disseminated for the guidance and compliance of all concerned: 1. Sec. 4 (q) : Debt Service Ceiling and Loan Ceiling Cap of LGUs Provision of RA No. 11494 x x x . . . The LGUs may also increase their respective personnel services cap by up to ten percent (10%) for first (1st) to third (3rd) class municipalities and up to five percent (5%) for the fourth (4th) to sixth (6th) class municipalities, and cities, and provinces: Provided, That the same shall be used for the hiring of additional health workers, the generation of temporary jobs for marginalized and hard-hit sectors as well as for other emergency employment programs undertaken by the LGU in response to the COVID-19 pandemic: Provided, further, That the allowable debt service ceiling of LGUs is increased to thirty percent (30%) of their annual regular income including their share in the national taxes: Provided, finally, That the LGUs shall be exempt from the loan ceiling cap imposed by the Department of Finance (DOF). x x x . . . IRR Per Memorandum from the Executive Secretary 9.3 Realignment of LGU funds x x x . . . 9.3.1. The allowable debt service ceiling of the LGUs is increased to thirty percent (30%) of their annual regular income including their share in the national taxes, where regular income refers to the estimates of regular income for the budget year, as determined by the local finance committee, and that the said ceiling shall apply only to existing loan amortizations that may be paid by the LGUs until 19 December 2020, subject to modification by the concerned LGU and lending institution of the approved amortization schedule: 9.3.2. The LGUs shall be exempt from the loan ceiling cap imposed by the DOF. For new LGU loan applications during the said period, the requirements under DOF Department Order No. 054.2016 and BSP Circular No. 926, s. 2016, shall still apply. 2. Sec. 4 (tt) : Moving of Deadlines for Payment of Local Taxes, Fees, and Charges CAIHTE Provision of RA No. 11494 Moving of statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees, and other charges required by law, and the grant of any benefit, in order to ease the burden on individuals under CQ. IRR Per Memorandum from the Executive Secretary 9.2 Deferment of deadlines for payment of local taxes, fees and charges The deadlines for the payment of all local taxes, fees and charges duly authorized and imposed by LGUs within their respective territorial jurisdictions as of 14 September 2020 shall be extended until 19 December 2020. 9.2.1 The counting of the period within which to pay local taxes, fees, and charges shall likewise be suspended during the said period. In the event that an LGU had already extended the deadlines prior to the effectivity of the Act, such deadlines shall be deemed modified with the period set forth herein. Any further extension thereof shall be subsequently authorized by the LGU concerned in accordance with the provisions of the Local Government Code (LGC). 9.2.2 As a result of the moving of deadlines of payment and the suspension of the counting of the period within which to pay local taxes, fees, and charges, no interest, surcharge or any form of penalty shall be applied on any local tax, fee or charge accruing on or due and demandable during the period provided above. 9.2.3 All local tax delinquencies prior to the effectivity of the Act shall remain, and shall be due and demandable following the expiration of the deadline set in this Section. The applicable interests, penalties, and surcharges shall begin to run again and shall be due and demandable after the lapse of the effectivity of the Act. 9.2.4 The LGUs are encouraged to provide appropriate benefits to taxpayers and business establishments, particularly those extending assistance and providing essential services for COVID-19 response, in accordance with the LGC and other applicable laws and policies. 9.2.5 The DOF, through the Bureau of Local Government Finance (BLGF), shall provide the necessary technical assistance and shall promulgate supplementary rules and guidelines for the purpose. Additional Reference/Remarks Department Circular No. 003.2020 dated 23 October 2020 was issued by Secretary Carlos G. Dominguez, and disseminated under BLGF Memorandum Circular No. 16.2020 dated 30 October 2020. 3. Sec. 4 (jjj) : Use of Special Education Fund (SEF) Provision of RA No. 11494 Notwithstanding the provisions of Section 272 of Republic Act No. 7160 or the "Local Government Code of 1991," a portion of the SEF may be used for the support of alternative learning modalities, digital education, digital infrastructure, and continuity plans, such as the purchase of equipment, materials, and supplies related thereto, printing and delivery of self-learning modules, provision of safe schools infrastructure, equipment and facilities such as handwashing stations, soap, alcohol, sanitizers, and other disinfecting solutions, as well as medical health supplies deemed appropriate by public health officials such as thermometers, face masks, and face shields, subject to existing accounting and auditing rules; IRR Per Memorandum from the Executive Secretary 9.4 Utilization of Special Education Fund x x x . . . 9.4.1 All local treasurers shall submit their quarterly and annual financial reports through the electronic Statement of Receipts and Expenditures (eSRE) System of the DOF-BLGF. 4. Sec. 4 (kkk) : Extension of the Term of Standby Loans of LGUs Provision of RA No. 11494 Extension of the term of standby loans entered into by LGUs; IRR Per Memorandum from the Executive Secretary 9.7 Extension of term of the LGU standby Extension of term of standby loans of LGUs, shall include loans pre-approved by the duly recognized lending institution(s), to cover ongoing negotiations or processed applications prior to the effectivity of the Act, but will be implemented or disbursed during the period covered by the Act. HEITAD 5. Sec. 4 (lll) : Use of Unexpended Trust Fund Balances Provision of RA No. 11494 Utilization of unexpended cash balances of public funds held in trust by LGUs, for purposes that have been completed or abandoned and allow the transfer of these funds to the general fund of the LGUs concerned to be made available for appropriation to support local government programs and projects in response to the COVID-19 pandemic. IRR Per Memorandum from the Executive Secretary 9.5 Utilization of unexpended cash balances of public funds held in trust by the LGUs The tax or a portion thereof paid under protest, pursuant to Section 252 of the LGC, shall continue to be held in trust by the treasurer concerned, until resolution thereof. 9.5.1 All provinces, cities, and municipalities, through the local treasurers, shall submit their financial report on quarterly and annual bases through the eSRE system of the DOF-BLGF. 6. Sec. 4 (mmm) : LGU Permits, Licenses, Clearances and Registration Requirement Provision of RA No. 11494 "Directing the DPWH and other government agencies to expedite the implementation of infrastructure programs and projects to generate local employment and stimulate the local economy: Provided, That infrastructure flagship projects identified by the National Economic and Development Authority (NEDA) shall be fast-tracked to pump prime the economy and help promote national economic recovery: Provided, further, That all permits and licenses including local government permits, licenses, clearances and registration requirement for infrastructure flagship projects shall be deemed waived for a period of one (1) year from the effectivity of this Act: Provided, furthermore, That permit requirements relating to environmental laws, health and occupational safety shall continue to be applicable and subject to a processing time of seven (7) working days: Provided, finally, That all laws requiring the permits waived under this provision shall be deemed amended during this one (1) year period of fast-track development;" IRR Per Memorandum from the Executive Secretary 9.6 Regulatory relief by the LGUs in infrastructure programs and projects In expediting the implementation of infrastructure programs and projects under the DPWH and other government agencies, regulatory relief shall be granted through the following: x x x . . . 9.6.1 All permits, licenses, clearances and registration requirements of LGUs, and applications for such, for infrastructure flagship projects identified by the National Economic and Development Authority (NEDA) shall be deemed waived for a period of one (1) year from the effectivity of RA No. 11494. 9.6.2 For this purpose, all local treasurers shall not assess and collect the fees and charges for such permits, licenses, clearances and registration requirements issued by the LGU concerned for NEDA-identified infrastructure flagship projects only. 9.6.3 All fees and charges in connection with waived LGU requirements of NEDA-identified infrastructure flagship projects shall be deemed waived. All concerned are likewise advised to be guided by the supplementary guidelines and issuances from concerned oversight agencies pertinent to the foregoing provisions of RA No. 11494, in view of the directives under Section 14 and Annex A of the IRR, as contained in the abovementioned Memorandum from the Executive Secretary. ATICcS All BLGF Central and Regional Directors are hereby directed to widely and immediately disseminate this Memorandum Circular within their respective jurisdictions. (SGD.) NIO RAYMOND B. ALVINA Executive Director ATTACHMENT Memorandum from the Executive Secretary October 23, 2020.