Guidelines and Procedures in the Release and Utilization of the Share of Provinces from the CY 2012 Collection of Burley and Native Tobacco Excise Tax Pursuant to Republic Act (RA) No. 8240, as Amended, and Share of Provinces, Cities and Municipalities from the CY 2012 Excise Tax on Locally Manufactured Virginia-Type Cigarettes under RA No. 7171, Chargeable against the Allocation to Local Government Units (ALGU) under the FY 2014 General Appropriations Act (GAA), RA No. 10633, Continuing Appropriations

February 18, 2015 DBM LOCAL BUDGET MEMORANDUM NO. 069-15 TO : Local Chief Executives, Members of the Local Sanggunian, Local Finance Committees, Local Budget Officers, Local Treasurers and All Others Concerned SUBJECT : Guidelines and Procedures in the Release and Utilization of the Share of Provinces from the CY 2012 Collection of Burley and Native Tobacco Excise Tax Pursuant to Republic Act (RA) No. 8240, as Amended, and Share of Provinces, Cities and Municipalities from the CY 2012 Excise Tax on Locally Manufactured Virginia-Type Cigarettes under RA No. 7171, Chargeable against the Allocation to Local Government Units (ALGU) under the FY 2014 General Appropriations Act (GAA), RA No. 10633, Continuing Appropriations 1.0 Background The existing guidelines in the release and utilization of the share of local government units (LGUs) from tobacco excise tax allocate these shares as follows: (i) 30% to the provinces; 40% to the cities and municipalities; and 30% to the congressional districts with respect to excise taxes from locally manufactured Virginia-type cigarettes under RA No. 7171; and (ii) 10% to the provinces; 10% to the cities and municipalities; and 80% to the congressional districts with respect to excise taxes from Burley and Native tobacco under RA No. 8240, as amended. However, in view of the Supreme Court Decision in Greco Antonious Beda B. Belgica, et al. vs. Honorable Paquito N. Ochoa, Jr., et al., (G.R. Nos. 208566, 208493, 209251, November 19, 2013), any form of post-enactment intervention by legislators in the implementation of the budget, except in the exercise of their oversight function, the existing procedures requiring legislative consultation, or identification of programs and projects by legislators prior to the release of the congressional district share has already been deemed unconstitutional and thus, prohibited. Pending the issuance of comprehensive guidelines consistent with the foregoing SC Decision and RA Nos. 7171 and 8240, as amended to cover the release of the full share of LGUs from the two types of tobacco excise tax, these guidelines shall cover only the release and utilization of the 10% share of provinces from the CY 2012 collection of Burley and native tobacco excise tax pursuant to RA No. 8240, as amended, and 30% share of provinces and 40% share of cities and municipalities from the CY 2012 excise tax on locally manufactured Virginia-type cigarettes under RA No. 7171. 2.0 Purpose 2.1 To prescribe the guidelines and procedures in the release and utilization of the 10% share of provinces from the CY 2012 collection of Burley and native tobacco excise tax pursuant to RA No. 8240, as amended, and 30% share of provinces and 40% share of cities and municipalities from the CY 2012 excise tax on locally manufactured Virgina-type cigarettes under RA No. 7171, and emphasize the posting and reporting requirements to enhance transparency and accountability; and cSEaTH 2.2 To inform the beneficiary LGUs of their respective share. 3.0 General Guidelines 3.1 The individual share of the beneficiary LGUs are indicated in the following attachments: 3.1.1 Annex A Share of Provinces, Cities and Municipalities from the CY 2012 Excise Tax on Locally Manufactured Virginia-Type Cigarettes under RA No. 7171; and 3.1.2 Annex B Share of Provinces from the CY 2012 Collection of Burley and Native Tobacco Excise Tax under RA No. 8240, as Amended. 3.2 Consistent with the amounts indicated per item 3.1 hereof, the beneficiary LGUs shall submit to the DBM Regional Office (RO) concerned, a list of programs and projects to be implemented, supported by the following: (i) approved sanggunian ordinance or resolution; (ii) mechanism and period of implementation; and (iii) projected and estimated number of beneficiaries. 3.3 In the preparation and submission of the above-mentioned pertinent requirements, the following procedures shall be observed: 3.3.1 The recipient LGUs shall ensure that the programs and projects to be implemented are included in the approved Annual Investment Program. 3.3.2 In the implementation of projects undertaken by cooperatives, the recipient LGUs shall ensure that the following documentation requirements are complied with by said cooperatives: 3.3.2.1 Copy of Certificate of Registration from the Securities and Exchange Commission; and 33.2.2 Copy of Certificate of Accreditation from the Cooperative Development Authority. 3.4 The Special Allotment Release Orders and Notices of Cash Allocation covering the share of beneficiary LGUs shall be comprehensively released by the DBM RO concerned upon issuance of this Memorandum. The corresponding Authorities to Debit Account and Notices of Authority to Debit Account Issued shall be released by the same ROs upon receipt of the LGUs' submission of the list of programs and projects together with the necessary supporting documents per items 3.2 and 3.3, subject to cash programming, budgeting, accounting and auditing and other applicable laws, rules, and regulations. ESAHca 3.5 The fund shall be treated as trust by the beneficiary LGUs. 4.0 Uses of the Fund 4.1 Share of Provinces, Cities and Municipalities from the Collection of Excise Tax on Locally Manufactured Virginia-Type Cigarettes under RA No. 7171 The fund shall be utilized to advance the self-reliance of the tobacco farmers through: 4.1.1 Cooperative projects that will enhance better quality of products, increase productivity, guarantee the market and as a whole increase farmers' income; 4.1.2 Livelihood projects particularly the development of alternative farming system to enhance farmers' income; 4.1.3 Agro-industrial projects that will enable tobacco farmers in the Virginia tobacco-producing provinces to be involved in the management and subsequent ownership of these project such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization; and 4.1.4 Infrastructure projects such as farm-to-market roads. 4.2 Share of Provinces from the Collection of Burley and Native Tobacco Excise Tax Pursuant to RA No. 8240, as Amended The fund shall be exclusively utilized for programs in pursuit of the following objectives: 4.2.1 Programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including, but not limited to, high-value crops, spices, rice, corn, sugarcane, coconut, livestock and fisheries; 4.2.2 Programs that will provide financial support for tobacco farmers who are displaced or who cease to produce tobacco; 4.2.3 Cooperative programs to assist tobacco farmers in planting alternative crops or implementing other livelihood projects; 4.2.4 Livelihood programs and projects that will promote, enhance, and develop the tourism potential of tobacco-growing provinces; SIcEHC 4.2.5 Infrastructure projects such as farm to market roads, schools, hospitals, and rural health facilities; and 4.2.6 Agro-industrial projects that will enable tobacco farmers to be involved in the management and subsequent ownership of projects, such as post-harvest and secondary processing like cigarette manufacturing and by-product utilization. 5.0 Posting/Reporting Requirement 5.1 The recipient LGUs shall prepare reports on fund utilization and the status of projects/accomplishments, and these reports shall be posted in the LGUs' websites and in at least three (3) conspicuous public places in the locality for transparency and accountability, and in compliance with the pertinent provisions of RA No. 7160 (The Local Government Code of 1991) and Full Disclosure Policy of the Department of the Interior and Local Government. 5.2 Likewise, the recipient LGUs shall comply with the posting requirements prescribed under RA No. 9184. 6.0 Responsibility and Accountability The responsibility and accountability in the implementation of programs and projects and proper utilization and disbursement of the LGU share rest with the local chief executive and other local officials concerned. It is also the responsibility of the said local officials to ensure that the LGU share is utilized strictly in accordance with applicable budgeting, accounting, and auditing rules and regulations, and pertinent provisions of RA No. 9184 (The Government Procurement Reform Act). CIAHDT 7.0 Effectivity This Memorandum shall take effect immediately. (SGD.) FLORENCIO B. ABAD Secretary Department of Budget and Management ANNEX A Share of Provinces, Cities and Municipalities from the CY 2012 Excise Tax on Locally Manufactured Virginia Type Cigarette under RA No. 7171, Chargeable against the FY 2014 GAA, RA No. 10633, Continuing Appropriations LGU Volume of Percentage Share LGU Share Production 1. Abra 5,200,727.70 12.85559321% 432,631,219.00 2. Ilocos Norte 6,378,084.30 15.76588161% 530,571,595.00 3. Ilocos Sur 23,241,958.60 57.45141495% 1,933,421,142.00 4. La Union 5,634,209.70 13.92711023% 468,691,144.00 Grand Total 40,454,980.30 100.00% 3,365,315,100 =========== =========== =========== LGU Volume of Percentage Share LGU Share Production Province Abra 185,413,380 Municipalities 1. Bangued 255,437.50 4.91157228% 10,649,249 2. Boliney 4,578,108 3. Bucay 13,065.00 0.25121484% 4,888,632 4. Bucloc 4,578,108 5. Daguioman 4,578,108 6. Danglas 591.50 0.01137341% 4,592,167 7. Dolores 46,317.00 0.89058691% 5,678,953 8. La Paz 4,578,108 9. Lacub 4,578,108 10. Lagangilang 4,578,108 11. Langiden 4,578,108 12. Langayan 4,578,108 13. Licuan-Baay 4,578,108 14. Luba 347,642.40 6.68449533% 12,840,740 15. Malibcong 4,578,108 16. Manabo 1,880.50 0.03615840% 4,622,803 17. Penarubbia 108,224.50 2.08094917% 7,150,347 18. Pidigan 397,701.50 7.64703563% 14,030,526 19. Pilar 1,747,112.40 33.59361422% 46,102,811 20. Sal-lapadan 4,112.50 0.07907547% 4,675,852 21. San Isidro 746,510.50 14.35396243% 22,320,886 22. San Juan 93,121.50 1.79054750% 6,791,384 23. San Quintin 91,465.00 1.75869619% 6,752,013 24. Tayum 368,642.00 7.08827728% 13,339,852 25. Tineg 4,578,109 26. Tubo 43,792.10 0.84203793% 5,618,943 27. Villaviciosa 935,111.80 17.98040301% 26,803,492 Total Lone District 5,200,727.70 100.00% 247,217,839.00 Total, Abra 5,200,727.70 100.00% 432,631,219 ========== ========== =========== Province Ilocos Norte 6,378,084.30 227,387,826 Municipalities 1st District 1. Adams 6,590,951 2. Bacarra 6,590,951 3. Bangui 6,590,951 4. Burgos 6,590,951 5. Carasi 6,590,951 6. Dumalneg 6,590,951 7. Pagudpud 6,590,952 8. Pasuquin 6,500,952 9. Piddig 187,113.50 2.93369437% 11,038,195 10. Sarrat 133,395.00 2.09145872% 9,761,434 11. Vintar 169,367.00 2.65545252% 10,616,402 12. Laoag City 6,590,952 Total 1st District 489,875.50 7.68060560% 90,734,593 2nd District 13. Badoc 1,110,259.50 17.40741338% 32,979,177 14. Batac City 1,675.814.60 26.27457589% 46,421,076 15. Banna (Espiritu) 457,704.00 7.17619866% 17,469,486 16. Currimao 296,168.50 4.64353380% 13,630,171 17. Dingras 175,783.90 2.75606110% 10,768,916 18. Marcos 394,483.00 6.18497626% 15,966,873 19. Nueva Era 166,844.50 2.61590302% 10,556,449 20. Paoay 39,630.50 0.62135428% 7,532,875 21. Pinili 1,513,189.80 23.72483224% 42,555,872 22. San Nicolas 58,330.50 0.91454577% 7,977,329 23. Solsona 6,590,952 Total 2nd District 5,888,208.80 92.3193440% 212,449,176 Total, Ilocos Norte 6,378,084.30 100.00% 530,571,595 ========== ========== ========== Province Ilocos Sur 23,241,958.60 828,609,061 Municipalities 1st District 1. Bantay 16,247,236 2. Cabugao 2,123,016.60 9.13441348% 66,706,288 3. Caoayan 16,247,236 4. Magsingal 1,049,840.20 4.51700400% 41,199,439 5. San Ildefonso 133,146.50 0.57287126% 19,411,811 6. San Juan 1,542.628.50 6.63725690% 52,911,844 7. San Vicente 16,247,237 8. Santa Catalina 16,247,237 9. Sto. Domingo 105,799.50 0.45520905% 18,761,839 10. Sinait 1,210,418.00 5.20790016% 45,015,993 11. Vigan City 16,247,237 Total 1st District 6,164,849.30 26.52465485% 325,243,397 2nd District 12. Alilem 69,077.20 0.29720903% 17,889,037 13. Banayoyo 962,729.50 4.14220469% 39,129,025 14. Burgos 1,108,615.40 4.76988802% 42,596,386 15. Candon City 2,294,037.20 9.87024045% 70,771,040 16. Cervantes 19,828.00 0.08531123% 16,718,500 17. G. del Pilar 521,210.30 2.24254035% 28,635,164 18. Galimuyod 635,692.00 2.73510512% 31,356,122 19. Lidlidda 370,088.60 1.59232966% 25,043,361 20. Nagbukel 563,367.00 2.42392222% 29,637,129 21. Narvacan 1,704,026.80 7.33168331% 56,747,897 22. Quirino 236,932.90 1.01941882% 21,878,567 23. Salcedo 967,127.10 4.16112565% 39,233,545 24. San Emilio 854,364.40 3.67595698% 36,553,445 25. San Esteban 573,304.50 2.46667895% 29,873,321 26. Santiago 1,439,847.20 6.19503384% 50,468,978 27. Sigay 478,776.40 2.05996581% 27,626,613 28. Sta. Cruz 1,847,236.70 7.94785298% 60,151,657 29. Sta. Lucia 1,124,981.70 4.84030507% 42,985,375 30. Sta. Maria 1,160,480.70 4.99304177% 43,829,101 31. Sugpon 475.00 0.00204372% 16,258,527 32. Suyo 20,359.80 0.08759933% 16,731,142 33. Tagudin 124,550.90 0.53588814% 19,207,515 34. Santa 16,247,237 Total 2nd District 17,077,109.30 73.47534515% 779,568,684 Total, Ilocos Sur 23,241,958.60 100.00% 1,933,421,142 =========== =========== =========== Province La Union 5,634,209.70 200,867,633 Municipalities 1st District 1. Bacnotan 495,610.20 8.79644576% 18,475,063 2. Balaoan 2,013,998.62 35.74589387% 54,563,542 3. Bangar 485,145.60 8.61071252% 18,226,344 4. Luna 11,714.90 0.20792446% 6,974,023 5. San Fernando City 307,529.52 5.45825478% 14,004,833 6. San Gabriel 6,695,588 7. San Juan 522,213.04 9.26861206% 19,107,349 8. Santol 215,905.89 3.83205279% 11,827,156 9. Sudipen 573,242.97 10.17432791% 20,320,208 Total 1st District 4,625,360.74 82.09422415% 170,194,106 2nd District 10. Agoo 400,763.26 7.11303415% 16,220,777 11. Aringay 156,742.80 2.78198378% 10,420,991 12. Bagulin 6,695,588 13. Bauang 104,519.50 1.85508715% 9,179,768 14. Burgos 6,695,588 15. Caba 145,923.00 2.58994620% 10,163,831 16. Naguilian 200,900.40 3.56572458% 11,470,512 17. Pugo 6,695,588 18. Rosario 6,695,588 19. Santo Tomas 6,695,587 20. Tubao 6,695,587 Total 2nd District 1,008,848.96 17.90577585% 97,629,405 Total, La Union 5,634,209.70 100.00% 468,691,144 ========== ========== ========== ANNEX B Share of Provinces from the CY 2012 Collection of Burley and Native Tobacco Excise Tax under RA No. 8240, Chargeable against the FY 2014 GAA, RA No. 10633, Continuing Appropriations LGU Volume of Percentage Share Provincial Share Production 1. Abra 105,038.00 0.43238554% 359,918.00 2. Kalinga 7,782.00 0.03203435% 26,665.00 3. Mt. Province 5,269.00 0.02168967% 18,054.00 4. Ilocos Norte 713,130.00 2.93557664% 2,443,580.00 5. Ilocos Sur 2,122,546.70 8.73739502% 7,273,025.00 6. La Union 2,223,263.50 9.15199248% 7,618,137.00 7. Pangasinan 3,904,599.80 16.07315912% 13,379,330.00 8. Cagayan 2,820,019.00 11.50851724% 9,662,953.00 9. Isabela 10,010,167.00 41.20652953% 34,300,398.00 10. Nueva Viscaya 88,115.00 0.36272255% 301,931.00 11. Quirino 1,340.00 0.00551607% 4,592.00 12. Tarlac 366,271.30 1.50774399% 1,255,049.00 13. Occidental Mindoro 1,454,300.40 5.98658068% 4,983,242.00 14. Misamis Oriental 246,064.29 1.01291571% 843,153.00 15. Maguindanao 128,170.00 0.52760767% 439,182.00 16. North Cotabato 96,595.86 0.39763374% 330,991.00 Total 24,292,671.85 100.00% 83,240,200.00 ========== ========== ==========