Repealing BLGF MC 08-2012 Thereby Rendering BLGF MC 31-2009 in Force and Effective

August 20, 2012 BLGF MEMORANDUM CIRCULAR NO. 058-12 TO : All Regional Directors for Local Government Finance; Metropolitan Manila Treasurers; City, Provincial and Municipal Treasurers; and All Others Concerned SUBJECT : Repealing BLGF Memorandum Circular No. 08-2012 dated February 9, 2012 thereby Rendering BLGF Memorandum Circular No. 31-2009 Dated October 7, 2009 in Force and Effective In view of and pursuant to the Joint Congressional Oversight Committee on Cooperative (JCOCC) RESOLUTION NO. 01-2012, adopted on June 6, 2012, copy attached and made an integral of * hereof, which provides, among others: ". . ., the Bureau of Local Government Finance IS HEREBY DIRECTED TO REPEAL Memorandum Circular No. 08-2012 dated February 9, 2012 issued by the BLGF OIC-Executive Director Atty. Salvador M. del Castillo addressed to all Regional Directors for Local Government Finance; Metropolitan Manila Treasurers; City, Provincial and Municipal Treasurers; and others concerned. Re: Clarification on the Exemption of Cooperatives from the payment of Local Taxes, Fees and Charges embodied in BLGF MEMORANDUM CIRCULAR NO. 31-2009 dated October 7, 2009 and in relation to R.A. No. 7160 otherwise known as the Local Government Code (LGC) of 1991, specifically Section 133(n) on the ground that it is inconsistent with the provisions of two (2) aforementioned memorandum circulars (BLGF Memorandum Circular No. 31-2009 dated October 7, 2009 and DILG Memorandum Circular No. 2010-120 dated October 20, 2010) and that it is not compliant with the requirements under Section (sic) 138 of the Philippine Cooperative Code of 2008." acEHSI In this connection, All BLGF Regional Directors are hereby instructed to disseminate the contents of this Circular to all Provincial, City and Municipal Treasurers and all others concerned within their respective jurisdictions. All concerned are enjoined to comply strictly and be guided accordingly. This Circular shall take effect immediately. (SGD.) ATTY. SALVADOR M. DEL CASTILLO OIC-Executive Director ATTACHMENT BLGF Memorandum Circular No. 008-12 February 9, 2012 BLGF Memorandum Circular No. 031-09 October 7, 2009 Senate of the Philippines House of Representatives Congress of the Philippines Joint Congressional Oversight Committee on Cooperatives August 22, 2012 The Honorable The Secretary Cesar V. Purisima Department of Finance Manila Secretary Purisima: The undersigned Committee Secretaries of the Senate Committee on Cooperatives and the House of Representatives Committee on Cooperatives Development, respectively, upon the instruction of the Senate Chair of the Committee on Cooperatives, Senator Manuel M. Lapid and the House of Representatives Chair of the Committee on Cooperatives Development, Honorable Jose R. Ping-ay submit the herein attached JCOCC RESOLUTION NO. 01-2012, the dispositive portion of which reads as follows, to quote: "RESOLVED FURTHER THAT, the Bureau of Local Government Finance IS HEREBY DIRECTED TO REPEAL Memorandum Circular No. 08-2012 dated February 9, 2012 issued by the BLGF OIC-Executive Director Atty. Salvador M. del Castillo addressed to all Regional Director for Local Government Finance; Metropolitan Manila treasurer; City, Provincial and Municipal Treasurers; and others concerned, Re: Clarification on the Exemption of Cooperatives from the payment of Local Taxes, Fees and Charges embodied in BLGF MEMORANDUM CIRCULAR NO. 31-2009 dated October 7, 2009 and in relation to RA 7160 otherwise known as the Local Government Code (LGC) of 1991, specifically Section 133(n) on the ground that it is inconsistent with the provisions of the two (2) aforementioned memorandum circulars and that it is not compliant with the requirements under Section 138 of the Philippine Cooperative Code of 2008. RESOLVED FINALLY, that the Bureau of Local Government Finance, the Cooperative Development Authority, the League of Provinces of the Philippines, the League of Cities and the League of Municipalities are hereby tasked to inform and disseminate the repeal of BLGF Memorandum Circular No. 08-2012 dated February 9, 2012 issued by the BLGF OIC-Executive Director Atty. Salvador M. del Castillo." Unquote. DTIACH The House Committee on Cooperatives Development had conducted a congressional inquiry on the basis of House Resolution No. 2201 introduced by Rep. Jose R. Ping-ay and Cresente C. Paez, entitled: "RESOLUTION DIRECTING THE COMMITTEE ON COOPERATIVES TO CONDUCT A CONGRESSIONAL INQUIRY, IN AID OF LEGISLATION, ON THE CASE OF SORSOGON PROVINCIAL COOPERATIVE BANK (SPCB) RELATIVE TO THE ALLEGED PAYMENT OF EXCESSIVE BUSINESS TAX AND COMMUNITY TAX CERTIFICATE AS INDICATED IN THEIR LETTER DATED 1 FEBRUARY 2012" the recommendations of the House Committee on Cooperatives Development was subsequently referred to the Joint Congressional Oversight Committee on Cooperatives pursuant to Article 138 of the Philippine Cooperative Code of 2008 for its consideration and recommendation. Hence, this instant Resolution. For your information, guidance and implementation. Very truly yours, (SGD.) PUTLI SUHARNI SAMANODI-CANDAO (SGD.) ATTY. MARIA ELVIRA R. URSAL Senate of the Philippines House of Representatives Congress of the Philippines sitting as the Joint Congressional Oversight Committee on Cooperatives during its meeting held on June 6, 2012 at the Leyte-Samar Function Room of the Sofitel Hotel attended by Senator Manuel M. Lapid, Chairperson and Senator Ferdinand R. Marcos, Jr. Vice-Chairperson of the Senate Panel and Representative Jose R. Ping-ay, Chairperson, Representative George P. Arnaiz, Vice-Chairperson and Representative Emmeline Y. Aglipay, Member, House of Representatives Panel has RESOLVED AND AS IT IS HEREBY RESOLVED THAT: DSHcTC JCOCC RESOLUTION NO. 01-2012 Pursuant to the agreement between the Joint Congressional Oversight Committee on Cooperatives represented by its Members from the Senate and House of Representatives, respectively and the Department of Finance-Bureau of Local Government Finance represented by its Officer-in-Charge, Atty. Salvador M. Del Castillo that, to wit: BLGF Memorandum Circular No. 31-2009 dated October 7, 2009 addressed to all Regional Director for Local Government Finance; Metropolitan Manila treasurer; City, Provincial and Municipal Treasurers; and others concerned Re: Exemption of Cooperatives from the Payment of Local Taxes and Charges signed by Executive Director Ma. Presentacion R. Montesa as approved by the Joint Congressional Oversight Committee on Cooperatives and DILG Memorandum Circular No. 2010-120 dated October 20, 2010 addressed to all Provincial Governors, City Mayors, Municipal Mayors, DILG Regional Directors, the Regional Governor of the Autonomous Region in Muslim Mindanao, and others concerned Re: Exemption of Duly Registered Cooperatives from Payment of Applicable Taxes, Fees and Charges issued by the Secretary of the Department of Local Government, Jesse M. Robredo in consonance with BLGF MC No. 31-2009 SHALL REMAIN IN FORCE AND IN EFFECT . RESOLVED FURTHER THAT, the Bureau of Local Government Finance IS HEREBY DIRECTED TO REPEAL Memorandum Circular No. 08-2012 dated February 9, 2012 issued by the BLGF OIC-Executive Director Atty. Salvador M. del Castillo addressed to all Regional Director for Local Government Finance; Metropolitan Manila treasurer; City, Provincial and Municipal Treasurers; and others concerned, Re: Clarification on the Exemption of Cooperatives from the payment of Local Taxes, Fees and Charges embodied in BLGF MEMORANDUM CIRCULAR NO. 31-2009 dated October 7, 2009 and in relation to RA 7160 otherwise known as the Local Government Code (LGC) of 1991, specifically Section 133 (n) on the ground that it is inconsistent with the provisions of the two (2) aforementioned memorandum circulars and that it is not compliant with the requirements under Section 138 of the Philippine Cooperative Code of 2008. RESOLVED FINALLY, that the Bureau of Local Government Finance, the Cooperative Development Authority, the League of Provinces of the Philippines, the League of Cities and the League of Municipalities are hereby tasked to inform and disseminate the repeal of BLGF Memorandum Circular No. 08-2012 dated February 9, 2012 issued by the BLGF OIC-Executive Director Atty. Salvador M. del Castillo. Let copies of this Resolution be furnished to all concerned. HDIaET Adopted, June 6, 2012, Manila, Philippines. (SGD.) REPRESENTATIVE JOSE R. PING-AY (SGD.) SENATOR MANUEL M. LAPID Chairperson House Panel Chairperson, Senate Panel (SGD.) REPRESENTATIVE GEORGE P. ARNAIZ (SGD.) SENATOR FERDINAND R. MARCOS, JR. Vice Chairperson, House Panel Vice-Chairperson, Senate Panel (SGD.) REPRESENTATIVE PABLO P. GARCIA (SGD.) SENATOR EDGARDO J. ANGARA Member, House Panel Member, Senate Panel (SGD.) REPRESENTATIVE ISIDRO T. UNGAB (SGD.) SENATOR LOREN B. LEGARDA Member, House Panel Member, Senate Panel (SGD.) REPRESENTATIVE EMMELINE Y. AGLIPAY (SGD.) SENATOR PIA S. CAYETANO Member, House Panel Member, Senate Panel Congress of the Philippines Senate Pasay City JOINT CONGRESSIONAL OVERSIGHT COMMITTEE ON COOPERATIVES Date: Wednesday, June 6, 2012 Time: 10:00 a.m. Venue: Hotel Sofitel Roxas Boulevard Pasay City Agenda: Bureau of Local Government Finance (BLGF) Memorandum Circular No. 08-2012 issued last February 9, 2012 re: Clarification on the Exemption of Cooperatives from the Payment of Local Taxes, Fees and Charges embodied in BLGF Memorandum Circular No. 31-2009 dated October 7, 2009 and in relation to R.A. 7160 otherwise known as the "Local Government Code (LGC) of 1991" ATTENDANCE SENATE PANEL: HON. MANUEL "LITO" M. LAPID - Chairman HON. FERDINAND R. MARCOS, JR. - Acting Chairman HOUSE PANEL: HON. JOSE R. PING-AY - Chairman HON. EMMELINE Y. AGLIPAY HON. GEORGE P. ARNAIZ GUESTS/RESOURCE PERSONS: Asst. Director Mariano Gabito - Bureau of Local Government, Department of Interior and Local Government (BLG-DILG) Atty. Leonor Hernandez - Director, Legal and Registration Department, Cooperative Development Authority (CDA) Ms. Nonie Hernandez - Director, Manila Extension Office, CDA Ms. Fe D. Caingles - Director, IDD, CDA Mr. Inocencio M. Malapit - CDA Mr. Salvador M. Del Castillo - OIC, Executive Director, Bureau of Local Government Finance, Department of Finance (BLGF- DOF) Mr. Tomas R. Carillo - Acting Chief, Local Tax Policy Research Division, BLGF-DOF Ms. Angelica Sanchez - Head of Policy, League of Provinces of the Philippines SENATORS' STAFF: Mr. Juan M. Bara, Jr. - O/S Marcos Mr. Jessie M. Pusag - O/S Marcos Mr. Nelson Ortiz - O/S Marcos HOUSE OF REPRESENTATIVE'S STAFF: Mr. Francis Jornacion - Office of Rep. Ping-ay SENATE SECRETARIAT: Ms. Putli Suharni Samanodi-Candao - Leg. Committee Secretary Ms. Araceli D. Masicap - Leg. Ctte. Stenographer Ms. Cecilia T. Sotto - -do- Ms. Ma. Emperatriz L. Novero - -do- Ms. Sonia N. Tupaz - -do- Ms. Ana Marie Deplomo - Assisting Clerk Ms. Charlene Bautista - OJT (Please see attached Attendance Sheet for complete list) Joint Congressional Oversight Committee on Cooperatives ADMasicap I-1 June 6, 2012 10:39 a.m. AT 10:39 A.M., HONORABLE FERDINAND BONGBONG MARCOS, ACTING CHAIRMAN OF THE SENATE PANEL AND HONORABLE JOSE PING-AY, CHAIRMAN OF THE HOUSE PANEL CALLED THE MEETING TO ORDER RESPECTIVELY. THE ACTING CHAIRMAN (SEN. MARCOS). Good morning ladies and gentlemen. On the part of the Senate, the Joint Congressional Oversight Committee on Cooperatives is called to order. cCHITA THE CHAIRMAN (REP. PING-AY). Good morning ladies and gentlemen. On the part of the House of Representatives, this Joint Congressional Oversight Committee meeting is now called to order. Mr. Chairman of the Committee, Senator Lapid and Senator Bongbong, we would like to introduce the members of the House of Representatives and members of the Committee on Cooperatives: Honorable George Arnaiz, the Vice Chair and also Honorable Emmy Aglipay of Party-list Diwa. Mr. Senator, this Joint Congressional Oversight Committee was requested by this humble representation in view of the several issuances that were issued by the Bureau of Local Government Finance specifically Memo Circular No. 31-2009 issued by Executive Director Montessa then reiterated by the secretary of the Department of the Interior and Local Government, No. 120, dated October 2010 reiterating the previous issuance of the Bureau of Local Government Finance. However, on February 9, 2012, there is another issuance that is Memo Circular 08 of 2012 issued by the OIC Executive Director of the Bureau of Local Government Finance, Mr. Salvador del Castillo. Having the last dispositive provision of this memo circular, it is perceived as contrary to the previous issuances of the Bureau of Local Government Finance and that of the issuance of the secretary of the Department of the Interior and Local Government. So, that is the reason why we called for this we requested for this meeting, Mr. Senator, Mr.Chairman. THE ACTING CHAIRMAN (SEN. MARCOS). Thank you, Mr. Chairman. We are specifically here to try to address these apparent contradictory issuances by the BLGF. So we are going to now it turns out in our private discussions that there has been a lot of communication terms of what has been decided in the Oversight Committee and which must be taken into account with the issuances that have been made. So, I think that the best thing is to first ask Mr. del Castillo to give us a chronological account of how they came to issue Memorandum Circular No. 8, Series of 2012 issued on February 9, 2012. So, if we could ask Mr. del Castillo, please. MR. DEL CASTILLO. Thank you very much, Mr. Chairman, Your Honors, good morning. Actually, Mr. Chairman, when I assumed as officer in charge of the bureau last December of last year, we reviewed several issuances of the Bureau of Local Government Finance and one of them is BLGF Memorandum Circular 31-2009. And during our review we cannot find legal basis for the imposition of the 1,000 and P500 as community tax. So, numerous queries have reached the Bureau of Local Government Finance which asking us on what is our legal basis for the in pegging the amount of P1,000 and P500 for community tax. So, after that review, we cannot find any law under Republic Act 9520 of such an amount. So, we deemed it that we correct ourselves because we perceived that we were wrong in the previous issuance. So, we issued another memorandum to correct our first issuance without knowledge that the Department of the Interior and Local Government, through the Honorable Secretary Robredo, have issued a circular to that effect. cDICaS In all honesty, Mr. Chairman, Your Honor, we do not know that there is such a DILG circular which adopted the portion of BLGF Circular 31-2009. THE CHAIRMAN (REP. PING-AY). Mr. Chairman, if I may respond? THE ACTING CHAIRMAN (SEN. MARCOS). I think Congressman Ping-ay can explain what happened. I was not yet a member of the Joint Congressional Oversight Committee at that time. So, the Congressman was, so he can explain to all of us what was agreed upon during one of their oversight dialogues. THE CHAIRMAN (REP. PING-AY). Well, in the first place there was during the crafting of the implementing rules and regulations of the different provisions of the law that required the issuance of an implementing rule, BLGF also came up with a proposed memo circular in the furtherance of this requirement so that during the presentation of this proposed memo circular, the first presentation was there was no imposition. There was no 1,000 for business permit and there was no 500 for CTC of the Cooperatives. However, after a period of time, when the proposal was made, there was an appeal made by the League of Governors, League of Mayors, League of City Vice Mayors that there should be a minimal amount that shall be imposed. So, when this was discussed, the Joint Congressional Oversight Committee, in a formal meeting, accepted the proposal that we will just allow BLGF to impose 1,000 for business permit, maximum; and 1,000 for the Community Tax Certificate of a cooperative, local government iyan. So that because of that the previous proposed memo circular by then Director Montessa was finalized and it was approved by the Joint Congressional Oversight Committee based on those agreements. So, it was reiterated because when the implementing rules were already crafted and approved by the Joint Congressional Oversight Committee, this representation, because we were then in receipt of so many complaints coming from local government units, I sent a letter, I wrote a letter to the secretary of the DILG to reiterate the compliance to Memo Circular No. 31-2009 by the BLGF. So that consequently Secretary Robredo issued Memo Circular No. 120-2010 as an offshoot of our letter to him asking him to reiterate the issuance reiterate compliance. So, that was the basis actually of why there is 1,000. You cannot find. You cannot find any place, any provision in Republic Act 9520 about this 1,000 and 500 maximum. . . THE ACTING CHAIRMAN (SEN. MARCOS). Oo. Oo. THE CHAIRMAN (REP. PING-AY). . . . to be paid by every cooperative in a local government unit. So that I, again, when we conducted a committee hearing in the House of Representatives and in the Committee on Cooperatives Development, Mr. Senator, Mr. Chairman, because of the complaint, acting on the complaint, of the Cooperative Bank of Sorsogon City and a cooperative in Polomolok, Cotabato relative to the imposition of these local government units which are very excessive, as a matter of fact. One specific example is that of Cotabato. They paid more than 500,000 for business permit. And also in Sorsogon City, one cooperative was made to pay 39,000 and the other was more than 100,000. So, those are the reasons, Mr. Chairman, Mr. Senators, na kung bakit nagpatawag tayo ng Oversight Committee para magkakaroon na sana tayo ng isahang pag-interpret dito sa provision ng ating batas, ng Cooperative Code. aSTAIH THE ACTING CHAIRMAN (SEN. MARCOS). To be specific, I think the offending section or part is still last paragraph which reads that cooperatives. . ./ admasicap Joint Congressional Oversight Committee on Cooperatives Ctsotto II-1 June 6, 2012 10:49 a.m. THE ACTING CHAIRMAN (SEN. MARCOS). . . . which reads that cooperatives I will paraphrase. "Cooperatives transacting business with both members and non-members are required to obtain or secure a mayor's permit and other regulatory permits, we implemented under police powers and pay the corresponding amounts of fees and charges for such permits that a local government unit may have imposed." It is on the basis of that last paragraph that the charges that the Congressman has explained to us were founded on. Now what we need to do is formalize the arrangement or the agreement that was made in the previous Oversight Committee meetings as to the 1,000 and the 500 limit that were imposed. So that that as Mr. Del Castillo has very rightly pointed out, there is no basis in law but there is a basis because this agreement was, in fact, approved by the Joint Oversight Committee. So we must we are asking them now, the BLGF, to incorporate that agreement in perhaps a further issuance. We will decide how we will remedy the situation. THE CHAIRMAN (REP. PING-AY). Also, Mr. Chair, this representation would like to apprise this Committee kung anong nangyari doon sa ating ginawang congressional inquiry doon sa Kongreso noong nakaraang linggo na ang nagiging desisyon ng ating mga local government units na nandoon noon ay willing sila na magbalik ibabalik daw nila iyong mga ibinayad lahat ng mga kooperatiba. Dahil na talagang napatunayan na iyong unang circular Memo Circular No. 31-2009 and reiterated by 120-2010 of DILG is really the memo circular that was approved by the Joint Congressional Oversight Committee. So as a result of that, Mr. Chairman, Mr. Senator, willing iyong mga local government units na magbalik iyong mga ibinayad. Kasi ang ginawa ng mga kooperatiba, they paid under protest. So with that iyon ang nagiging THE ACTING CHAIRMAN (SEN. MARCOS). Well it seems it seems to me anyway that there is no disagreement here from either the BLGF, from the Joint Oversight Committee. Even the local governments have already agreed to reimburse payment if it is eventually shown that those charges should not have been made. So I think all we have to do now is decide on a remedy so that we can we can there was another besides the fees, there was another article here that we were discussing. Ah iyon na nga, yung 500 and 1,000. SEIDAC So perhaps it's time let's ask Mr. Del Castillo. How do you suggest that we remedy the situation so that we can now ask the our cooperative members can now ask the local governments, two examples of which were given by Congressman Ping-ay. They can now ask we can give a basis for our cooperatives to now ask for the reimbursement of their payment and for the local governments to understand that they do not charge on that basis. They do not charge the fees for the permits on the basis that they have been doing. So Mr. Del Castillo. MR. DEL CASTILLO. Thank you, Mr. Chairman. Your Honor, what we will just ask the Joint Oversight Committee is a formal communication to us in the minutes of this proceeding so that we will have a solid basis to rectify whatever misunderstanding of our issuance. And as whatever amount that this Honorable Committee will agree, we will adopt that, Mr. Chairman. THE CHAIRMAN (REP. PING-AY). Mr. Chairman. THE ACTING CHAIRMAN (SEN. MARCOS). Yes, please. THE CHAIRMAN (REP. PING-AY). The reaction of this representation relative to the EO Issuance No. 8-2012 is, it did not specifically assail the imposition of 1,000 and 500. It did not. However, it opened up the doors for the imposition of local government fees. That is the only one. That is why there is no I think, I think, Mr. Del Castillo, I think there is no need to rectify the 1,000 and the whatever agreement was made by the Joint Congressional Oversight Committee previously. However, what we need to rectify is the provision, your last paragraph, second to the last paragraph of your issuance na you are now allowing the imposition of local fees which may be passed by the local government units. Iyon lang po ang gusto nating tatalakayin doon at papalitan. Kasi wala naman, hindi mo naman sinabi tungkol dito sa 1,000 at saka 500. Wala naman iyon. Kaya kung pupuwedeng gawin na natin iyon, di mas mabilis pa. ITScHa THE ACTING CHAIRMAN (SEN. MARCOS). Is it possible for just for us to return by to repeal the Memo No. 8-2012 and return to the BLGF Memorandum Circular 31-2009, series of 2009, and the DILG Memorandum Circular 120, series 2010, signed by Secretary Robredo? That would remedy the situation very easily. THE CHAIRMAN (REP. PING-AY). Yeah, yun na nga. MR. DEL CASTILLO. Mr. Chairman, maybe all we have to do is to repeal Memo Circular 8-2012 so that we will restore back to THE ACTING CHAIRMAN (SEN. MARCOS). You can make that you can do it you can repeal it on the basis of a communication that the Joint Oversight Committee can send you, informing you of and providing you with the minutes or even the transcript of the Joint Oversight Committee where these agreements were made. And on that basis, you can the easiest way I think to correct this, would be, as I said, to repeal Memorandum Circular 31. Is that possible? Would that be a reasonable way to remedy this situation now? MR. DEL CASTILLO. Yes. Actually, Mr. Chairman, I believe that's the best way that we can remedy the situation. THE ACTING CHAIRMAN (SEN. MARCOS). Okay. We take note I suggest that we write a letter the Joint Oversight Committee will write a letter to BLGF, to Mr. Del Castillo in particular, and say that we take note of Memorandum Circular No. 8-2012 and we would like to inform the BLGF that during the Joint Oversight Committee dated, whatever it is, it was decided and you attach the transcripts or minutes of that meeting and that would give sufficient basis for Mr. Del Castillo to repeal this memorandum circular. I think that's para naman mayroon siyang ground oo para naman mayroong ground ang BLGF para bawiin iyong memorandum. THE CHAIRMAN (REP. PING-AY). So I hope that will now solve THE ACTING CHAIRMAN (SEN. MARCOS). I think that solves the problem. As I said, madali ito dahil wala namang there is no disagreement with anyone. Maybe to avoid this thing in the future, we just have to keep in mind that the in the Philippine Cooperative Code of 2008, that this Joint Oversight Committee approves must approve all the issuances. So I suppose just a closer coordination between the BLGF and the Joint Oversight Committee, whenever the subject of cooperatives comes up para naman you know, we cannot blame also the BLGF. They were not informed of this, so that is why when you look as you said, for a basis in law, it does not exist, it comes from a different source. So I think that would be the simplest way to handle it. So maybe the Committee Secretary will draft that letter, including the attachments which are the minutes or the transcripts, whichever we decide transcript na para so that it's very detailed and very precise. We'll send to them the transcripts and then on that basis, we will await the action of the BLGF, Mr. Del Castillo, to rectify. ScHADI MR. DEL CASTILLO. Yes, Your Honor, upon receipt of that advisory from Joint Congressional Oversight Committee, we will immediately issue . . . cts Joint Congressional Oversight Committee on Cooperatives Melnovero III-1 June 6, 2012 10:59 a.m. MR. DEL CASTILLO. . . . we will immediately issue the necessary circular. THE CHAIRMAN (REP. PING-AY). Yes, Rep. Arnaiz. REP. ARNAIZ. May I inquire from Director Del Castillo what was his basis of reviewing Memorandum Circular No. 31-02-009? MR. DEL CASTILLO. The basis, Mr. Chairman, Your Honors, is there are numerous complaints in our office questioning the P1,000 mayor's permit fee and the P500 community tax which is contained in the circular. So we researched based on our records and on our files and honestly we have not find any that can stand as the basis of Joint Memorandum Circular 31-2009. That's the reason why we rectified our mistake, Mr. Chairman. REP. ARNAIZ. Are these complaints in writing? MR. DEL CASTILLO. Yes, Mr. Chairman. REP. ARNAIZ. Do you have copies of the complaints in writing in your office? Were the complaints in writing sent to you? MR. DEL CASTILLO. Yes, Mr. Chairman, we have in our office the communication from other local government units and the. . . REP. ARNAIZ. Because I was thinking, Mr. Chairman, maybe it would not even be necessary for the committee secretary to write Director Del Castillo a letter. After all, there is a clear provision in the Cooperative Code, more specifically Article 138, that the Joint Oversight Committee shall review and approve the implementing rules and regulations of this code and monitor this properly. When we say rules and regulations, necessarily this will include all other issuances. Because the rule and regulation is of higher category than a policy or memorandum circular of a BLGF memorandum. So to my mind, it may not be necessary, Director Del Castillo, to really to amend this memorandum circular which he issued on February 9, 2012. Would you need a letter from the oversight committee or that will not be necessary anymore? So that we can already make the changes as fast as we can. THE CHAIRMAN (SEN. MARCOS). I think to give the Director a complete legal cover on this situation, so that he has a very firm ground to repeal or to withdraw this memorandum. Para naman meron siyang maipakita na "Nagkamali kami and it brought to our attention and the transcript has been given to us. It is clear that this agreement was made by the Joint Oversight Committee and that parts of this issuance were contrary to these agreements that were made." So madali lang naman yan. We will just write a letter that we all agreed here. So but it is important that when it is is it going to be repealed or withdrawn? What are we going to SDcITH THE CHAIRMAN (REP. PING-AY). It has to be withdrawn. THE ACTING CHAIRMAN (SEN. MARCOS). Okay, it has to be withdrawn in favor what procedure do you suggest? Do you repeal it? Do you withdraw it? THE CHAIRMAN (REP. PING-AY). In favor of the old. THE ACTING CHAIRMAN (SEN. MARCOS). How should we correct? Anong gagawin dito sa Memorandum No. 8, 2012? MR. DEL CASTILLO. Your Honor, Mr. Chairman, either way, Mr. Chairman, repeal it or withdraw because of that advice that we will be receiving from the Joint Oversight Committee. THE ACTING CHAIRMAN (SEN. MARCOS). I think it is also very important for the Joint Oversight Committee. I think what we will have to do is that once it is withdrawn by the BLGF, we must inform everyone of that withdrawal. Hindi lang pwedeng basta you will issue a memo withdrawing this memo but it has to be we have to inform also some of the LGUs because as we have seen, they are already operating on the basis of this memorandum para maliwanag sa lahat. Because the worst thing is that, I'm sure, we will have cases coming up that they are still continuing to work on this basis. So kailangan lahat ng I suppose we'll have to make a communication. We will give the either withdrawal of this memo together with the memo of Secretary Robredo. THE CHAIRMAN (REP. PING-AY). The memo of Secretary Robredo is all right. SDTcAH THE ACTING CHAIRMAN (SEN. MARCOS). Precisely. Sasabihin natin yun ang last that will be the last memo, the DILG position and that is what we are operating under. Para maliwanag sa lahat because yung mga LGUs, of course, you cannot blame the LGUs, di ba, dahil may collection yan eh, so sayang din yun, di ba? So, but then, para naman hindi there's no confusion, I think, in fact, if we have done that previously, maybe we would not have had this problem. But anyway, there is a simple solution but I think just to make things clear, we will have to make to send a letter or a memo to LGUs about this return to the previous basis. THE CHAIRMAN (REP. PING-AY). As a matter of fact, Mr. Chairman, alam mo ang susunod dito yung mga electric cooperatives that are CDA-registered. This now opens the floodgate of all local government units imposing on every electric post that is situated in their locality. So malaki magugulo itong circular nating ito kung ipapatupad ng mga electric cooperatives that are CDA-registered like the cooperatives. So I hope that that will rectify and what is worst is if we do not do any rectification of the issuance, there is an impending collective action by the cooperatives of the entire country that on the basis of Article 140 of the 9520, I think they are going to seek redress over these impositions kung hindi ma-withdraw ito. So I'm very hopeful, Mr. Director, that this will be done as soonest para as a matter of fact, we planned with the Joint Congressional Oversight Committee, Mr. Senator, that we do conduct just like what we have been doing magkakaroon tayo ng roadshow para ipaalam doon sa Mindanao, sa Visayas and Luzon na ganito na yung final na susundin natin. Kasi marami nang problema itong nagawa nito sa ating mga kooperatiba at saka napakalaki yung mga impositions ng mga local government units. So all of these problems are now reaching my office complaining. So I filed a resolution to investigate itong kuwan na ito. So I think, Mr. Chairman, that's all. REP. ARNAIZ. Mr. Chairman, let's make some clarifications. Who will now inform the local government units that this memorandum circular will now be withdrawn? THE ACTING CHAIRMAN (SEN. MARCOS). Everybody BLGF, with the Joint Oversight Committee and DILG should also REP. ARNAIZ. Is it within our authority and power to inform local governments? THE ACTING CHAIRMAN (SEN. MARCOS). Well, if it is just providing an information that does not require any special authority. So we will just explain what transpired at this meeting and make very, very clear that we have reverted to the two previous memoranda in the policy on fees and charges for permits. I think more rather than less, kahit na magdoble-doble yung information, wala namang masama doon. Mabuti na yung sobra kaysa sa kulang. REP. ARNAIZ. Would it be all right for the Director si Director del Castillo to inform local government units about what we did? THE CHAIRMAN (REP. PING-AY). But, you know, the memorandum circular issued by Director Del Castillo is not addressed to local governments but to regional directors for local government finance. IDSaAH THE ACTING CHAIRMAN (SEN. MARCOS). Wala na. Nagkaka-out of the bag eh. The information has not remained at the regional; sa mga RED lang. Eh nag-impose na nga ng fees eh kaya they are already using it. So we have to I think that's to be very thorough. We will have to inform everyone at least at the provincial level, provinces and cities man lang at the minimum. I think, again, then we can should we make it a joint memo or information or letter with BLGF and then the Committee? THE CHAIRMAN (REP. PING-AY). Mr. Chairman, remember, during last year, we spent the whole year going around the country conducting tax fora inviting local government no, no, the Bureau of Internal Revenue. THE ACTING CHAIRMAN (SEN. MARCOS). Yeah, but we are trying REP. ARNAIZ. Kasi if you ask the Secretary of the Interior and Local Government to do this again, then he will tell us the answer is, "I have not changed my memorandum circulars in this thing." Or maybe the Secretary can . . ./meln Joint Congressional Oversight Committee on Cooperatives SNTUPAZ IV-1 June 6, 2012 11:09 a.m. REP. ARNAIZ. . . . Or maybe the secretary can issue a memorandum circular reiterating this memorandum circular. THE ACTING CHAIRMAN (SEN. MARCOS). You know, we have here League of Provinces representative. Do we have a League of Cities representative? 'Yon siguro we can ask the leagues 'yong mga LMP, 'yong League of Provinces and the League of Cities. Again, I beg if we do too much. It is not if they receive the information three times, that is not a problem. But again I don't know, but it must come also from the Joint Congressional Oversight. The key entities that must be informing the LGUs should be the Committee and the BLGF. REP. ARNAIZ. Ano talagang kasi para 'yong ika nga united front, hindi ba? Para maliwanag na maliwanag na ito na talaga ang THE ACTING CHAIRMAN (SEN. MARCOS). And then we can ask, we can inform, we can send the letter to the leagues and ask them to disseminate that. . . THE CHAIRMAN (REP. PING-AY). Even CDA, Mr. Senator. THE ACTING CHAIRMAN (SEN. MARCOS). CDA. And the CDA definitely because 'yong mga nasa probinsiya ninyo kailangan. Kasi, I am sure when they receive this, they will go to CDA, ano ba talaga ang sitwasyon? And so your people should also be ready to inform the LGUs, to inform the cooperatives, both the actors and. . . THE CHAIRMAN (REP. PING-AY). And also, Mr. Senator, the DILG is represented here today. CSIcHA THE ACTING CHAIRMAN (SEN. MARCOS). Yes, yes. THE CHAIRMAN (REP. PING-AY). Let's do the same. Disseminate the same information. THE ACTING CHAIRMAN (SEN. MARCOS). But we must decide on one official because I anticipate what will happen is that when we send this letter, tama, they will go straight to the the LGUs will go to the CDA and say, "What really is the what are we operating under now?" Then, you can explain to them. You can also explain to the cooperatives na hindi sila dapat i-charge ng because we have returned to the previous regimen. Okay. THE CHAIRMAN (REP. PING-AY). Okay. Agree lahat? VOICES. Agree. Yes, sir. THE CHAIRMAN (REP. PING-AY). Thank you. So, Mr. Senator, it has been a very fruitful discussion and we thank all our resource persons for being here today. However, before we adjourn, Mr. Chairman, I would like to reiterate that we our Joint Congressional Oversight Committee siguro kailangan magsulat din sa Department of Justice. Because the Department of Justice has not issued a circular relative to Article 61, Section 3 which calls for non-collection of the dito sa pag-registro ng mga kooperatiba 'yong kanilang mga collaterals sa Register of Deeds. Doon sa dating memo circular kasi, singkwenta mil lang ang libre up to 50,000. Pero dito sa ating bagong batas, up to 250,000 na 'yan pero hindi sinusunod ng mga taga Register of Deeds ito. Kailangan daw nila 'yong memo circular coming from the Department of Justice to implement this particular provision of 9520. That is why, I am directing the Committee Secretariat to please write a letter for our signature requesting the Department of Justice to issue a circular relative to this provision of the law. Because that is what is being waited for by the different Register of Deeds entire the country. * Hindi nila kinikilala ang bagong batas kung walang circular. That is one. And also, Mr. Senator, very swiftly, mayroong administrative order coming from the Supreme Court. . . THE ACTING CHAIRMAN (SEN. MARCOS). Supreme Court. Oo. THE CHAIRMAN (REP. PING-AY). . . . which now allows the imposition of sheriff's fees and other kinds of fees whenever a cooperative files a complaint or a collection fee in the regular course of law which before ang una ang una na issuance, administrative order, coming from the Supreme Court was 'yong sheriff's fees payable libre 'yan pero sheriff's expense babayaran 'yan ng kooperatiba. 'Yan ngayon ang kuwan. So the cooperatives really agreed to pay the sheriff's expense because we realized also na kailangan, kailangan din noong mga 'yong gastusin ng sheriff para mag-issue noong mga kuwan. So anything that we can do, I do not know, what do we need to do, Mr. Senator, relative to this? THE ACTING CHAIRMAN (SEN. MARCOS). I was going to suggest to consult with the Chief Justice . . . (laughter) . . . but maybe that option is no longer available to us. We will have to talk to we will have to see what we can do. We have to talk to the Supreme Court because that is really part of the judicial THE CHAIRMAN (REP. PING-AY). Mediation. THE ACTING CHAIRMAN (SEN. MARCOS). Talagang ganyan na 'yan. Maybe we can pakiusapan na lang kung pwedeng bawasan because 'yong ating mga kooperatiba don't really have that much resources. Precisely by definition, they are a small entity. Pero wala 'yan, directive 'yan from the Supreme Court. And I don't think that right now the Supreme Court is very busy with some very big issues. But it doesn't mean it doesn't preclude us from going and ask in the form of a Committee and trying to see if we can renegotiate that THE CHAIRMAN (REP. PING-AY). Okay. So having said that, Mr. Senator, on the part of the House of Representatives, the Joint Congressional Oversight Committee meeting is now adjourned. IaAEHD THE ACTING CHAIRMAN (SEN. MARCOS). On the part of the Senate, ladies and gentlemen, thank you. Good morning, we are adjourned. (THE MEETING WAS ADJOURNED AT 11:16 AM.)