Guidelines on the Release of the Remaining Shares of Cities and Municipalities from the Prior Years' Collections of Excise Taxes from Locally Manufactured Virginia-Type Cigarettes under Republic Act (RA) No. 7171 and Burley and Native Tobacco under RA No. 8240, as Amended by RA No. 10351, Chargeable Against the FYs 2010-2013 General Appropriations Acts (GAAs)

March 8, 2016 DBM LOCAL BUDGET MEMORANDUM NO. 073-16 TO : Local Chief Executives, Members of the Local Sanggunian, Local Budget Officers, Local Treasurers, Local Development and Planning Officers, Local Accountants, and All Others Concerned SUBJECT : Guidelines on the Release of the Remaining Shares of Cities and Municipalities from the Prior Years' Collections of Excise Taxes from Locally Manufactured Virginia-Type Cigarettes under Republic Act (RA) No. 7171 and Burley and Native Tobacco under RA No. 8240, as Amended by RA No. 10351, Chargeable Against the FYs 2010-2013 General Appropriations Acts (GAAs) 1.0 Background The previous guidelines on the release and utilization of the shares of LGUs from tobacco excise taxes provide the following allocation formula: (i) for excise taxes from locally manufactured Virginia-type cigarettes under RA No. 7171 30% to the provinces; 40% to the cities and municipalities; and 30% to the cities and municipalities in the congressional districts of a beneficiary province; and (ii) for excise taxes from Burley and Native tobacco under RA No. 8240 10% to the provinces; 10% to the cities and municipalities; and 80% to the legislative district. Further, legislative consultation was required prior to the release of the congressional district shares in the subject excise taxes. However, in view of the Supreme Court (SC) pronouncement in Greco Antonious Beda B. Belgica, et al. vs. Honorable Paquito N. Ochoa, Jr., et al. (G.R. Nos. 208566, 208493 and 209251, November 19, 2013) against any form of post-enactment intervention by legislators in the implementation of the budget, except in the exercise of their oversight function, the said process where legislators identify the programs and projects to be implemented prior to the release of the congressional district shares shall no longer be allowed having been declared by the SC as unconstitutional. Accordingly, these guidelines are being issued to cover the release and utilization of the remaining shares of cities and municipalities from the prior years' collections of excise taxes from locally manufactured Virginia-type cigarettes under RA No. 7171 and Burley and Native Tobacco under RA No. 8240, as amended by RA No. 10351, chargeable against the FYs 2010-2013 GAA, RA Nos. 9970, 10147, 10155 and 10352, respectively, consistent with the aforecited SC decision. 2.0 Purposes 2.1 To prescribe the guidelines on the release and utilization of the subject remaining shares of cities and municipalities from tobacco excise taxes and emphasize the concomitant posting and reporting requirements to enhance transparency and accountability; and 2.2 To inform the beneficiary cities and municipalities of their respective shares. 3.0 General Guidelines 3.1 The individual shares of the beneficiary cities and municipalities are computed based on the volume of production and trade acceptances of tobacco-producing LGUs per relevant certifications provided by the National Tobacco Administration (NTA), as shown in the following attachments: 3.1.1 Annex A Remaining Shares of Cities and Municipalities from the CYs 2008, 2009 and 2011 Excise Taxes on Locally Manufactured Virginia-Type Cigarettes under RA No. 7171 The shares of the cities and municipalities were computed based on the volume of production and trade acceptances as certified by the NTA in accordance with RA No. 7171. 3.1.2 Annex B Remaining Shares of Cities and Municipalities Within a Beneficiary Province from the CYs 2008, 2009 and 2010 Collection of Burley and Native Tobacco Excise Taxes under RA No. 8240, as Amended by RA No. 10351 The individual LGU shares were allocated based on their respective volume of production and trade acceptances as certified by the NTA in accordance with RA No. 8240, as amended by RA No. 10351. 3.2 Consistent with the amounts of their individual shares, the beneficiary cities and municipalities 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 The recipient LGUs shall ensure that the programs and projects to be implemented are included in the approved Annual Investment Program. 3.4 In case a program/project is to be undertaken by a cooperative, the recipient LGU shall ensure that an authenticated or a certified true copy of the Certificate of Registration from the Cooperative Development Authority is submitted by the cooperative to the LGU prior to the implementation of the program/project. CAIHTE 3.5 The Authorities to Debit Account and Notices of Authority to Debit Account Issued shall be released upon receipt of the LGUs' submission of the list of programs and projects together with the necessary supporting documents per Item 3.2 hereof, subject to cash programming, budgeting, accounting and auditing rules and regulations, and other applicable laws, rules and regulations. 4.0 Uses of the Fund 4.1 Shares 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 projects 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 Shares of Cities and Municipalities from the Collection of Burley and Native Tobacco Excise Tax Pursuant to RA No. 8240, as amended by RA No. 10351 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; 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 Requirements 5.1 The recipient LGU shall prepare quarterly reports on fund utilization and status of program/project implementation using the attached format (Annex C), and said reports shall be posted within twenty (20) days from the end of each quarter on the LGU's website, the website established by the DBM for the purpose, and in at least three (3) conspicuous public places in the locality for transparency and accountability, consistent with the Full Disclosure Policy of the Department of the Interior and Local Government. 5.2 Likewise, the recipient LGU shall comply with the posting requirements prescribed under RA No. 9184 (The Government Procurement Reform Act). 6.0 Responsibility and Accountability The responsibility and accountability in the implementation of programs and projects and proper utilization and disbursement of the LGU shares shall rest upon the local chief executive and other local officials concerned. It is also the responsibility of the said local officials to ensure that the LGU shares are utilized strictly in accordance with applicable budgeting, accounting, and auditing rules and regulations, and pertinent provisions of RA No. 9184. 7.0 Effectivity This Memorandum shall take effect immediately. (SGD.) FLORENCIO B. ABAD Secretary ANNEX A Remaining Shares of Cities and Municipalities from Prior Years' Collections of Excise Taxes from Locally Manufactured Virginia-Type Cigarettes Charged Against the FYs 2010, 2011 and 2013 GAAs, RA Nos. 9970, 10147 and 10352, Respectively LGUs FY 2008 Share FY 2009 Share FY 2011 Share Total Share Charged Charged Charged Against the FY Against the FY Against the FY 2010 GAA 2011 GAA 2013 GAA Province of Abra Municipalities 1. Bangued 2,222,501.00 2,222,501.00 2. Danglas 424,277.00 424,277.00 3. Dolores 294,612.00 294,612.00 4. Luba 2,755,861.00 2,755,861.00 5. Penarubbia 3,171,485.00 3,171,485.00 6. Pidigan 5,195,688.00 5,195,688.00 7. Pilar 23,151,568.00 23,151,568.00 8. San Isidro 8,940,614.00 8,940,614.00 9. San Juan 467,506.00 467,506.00 10. San Quintin 2,416,453.00 2,416,453.00 11. Tayum 4,584,642.00 4,584,642.00 12. Tubo 37,911.00 37,911.00 13. Villaviciosa 12,894,645.00 12,894,645.00 Total, Abra - - 66,557,763.00 66,557,763.00 ============ ============ Province of Ilocos Norte Municipalities 1. Piddig 2,482,860.00 5,432,827.00 4,324,404.00 12,240,091.00 2. Sarrat 2,295,152.00 4,889,529.00 3,860,129.00 11,044,810.00 3. Vintar 567,580.00 2,861,954.00 2,936,656.00 6,366,190.00 Total, Ilocos Norte 5,345,592.00 13,184,310.00 11,121,189.00 29,651,091.00 =========== ============ =========== =========== Province of Ilocos Sur Municipalities 1. Cabugao 32,935,538.00 32,935,538.00 2. Magsingal 12,920,023.00 12,920,023.00 3. San Juan 26,687,803.00 26,687,803.00 4. Sto. Domingo 1,160,795.00 1,160,795.00 5. Sinait 10,581,779.00 10,581,779.00 6. Banayoyo 14,277.00 14,277.00 7. Burgos 10,698.00 10,698.00 8. Candon City 50,412.00 50,412.00 9. G. del Pilar 5,315.00 5,315.00 10. Galimuyod 7,126.00 7,126.00 11. Lidlidda 4,230.00 4,230.00 12. Nagbukel 1,196.00 1,196.00 13. Narvacan 27,553.00 27,553.00 14. Quirino 1,834.00 1,834.00 15. Salcedo 12,541.00 12,541.00 16. San Emilio 12,602.00 12,602.00 17. San Esteban 5,528.00 5,528.00 18. Santiago 11,927.00 11,927.00 19. Sigay 5,678.00 5,678.00 20. Sta. Cruz 15,217.00 15,217.00 21. Sta. Lucia 8,162.00 8,162.00 22. Sta. Maria 13,934.00 13,934.00 23. Tagudin 1,770.00 1,770.00 Total, Ilocos Sur - 210,000.00 84,285,938.00 84,495,938.00 ========= =========== =========== Province of La Union Municipalities 1. Bacnotan 3,987,675.00 3,987,675.00 2. Balaoan 30,393,241.00 30,393,241.00 3. Bangar 7,739,597.00 7,739,597.00 4. Luna 242,303.00 242,303.00 5. San Fernando City 1,505,368.00 1,505,368.00 6. San Juan 7,134,946.00 7,134,946.00 7. Santol 2,553,613.00 2,553.613.00 8. Sudipen 4,853,756.00 4,853,756.00 Total, La Union - - 58,410,499.00 58,410,499.00 Grand Total 5,345,592.00 13,394,310.00 220,375,389.00 239,115,291.00 =========== ============ ============ ============ ANNEX B Remaining Shares of Cities and Municipalities from Prior Years' Collections of Excise Taxes from Burley and Native Tobacco Charged Against the FYs 2010, 2011 and 2012 GAAs, RA Nos. 9970, 10147 and 10155, Respectively DETACa LGUs FY 2008 Share FY 2009 Share FY 2011 Share Total Share Charged Charged Charged Against the FY Against the FY Against the FY 2010 GAA 2011 GAA 2012 GAA Province of Abra Municipalities Bangued 191,977.00 191,977.00 Dolores 145,008.00 145,008.00 Lagayan - Pilar 59,280.00 59,280.00 San Isidro 68,400.00 68,400.00 San Juan - Total, Abra - - 464,665.00 464,665.00 ========= ========= Province of Ifugao Municipality Alfonso Lista 89,412.00 89,412.00 Total, Ifugao - - 89,412.00 89,412.00 ======== ======== Mt. Province Municipality Paracelis 89,412.00 89,412.00 Total, Mt. Province - - 89,412.00 89,412.00 ========== ========= Province of Ilocos Norte Municipalities Bacarra 952,355.00 952,355.00 Burgos 184,681.00 184,681.00 Pasuquin 2,035,707.00 2,035,707.00 Piddig 193,085.00 193,085.00 Vintar 1,165,302.00 1,165,302.00 Badoc 284,097.00 1,268,763.00 1,552,860.00 Banna (Espiritu) 671,636.00 1,961,542.00 2,633,178.00 Batac City 1,690,233.00 4,751,859.00 6,442,092.00 Currimao 111.00 55,998.00 56,109.00 Dingras 962,615.00 3,903,884.00 4,866,499.00 Marcos 66.00 575,983.00 576,049.00 Nueva Era 128,600.00 643,181.00 771,781.00 Paoay 71,258.00 71,258.00 Pinili 1,052,361.00 1,052,361.00 San Nicolas 11,106.00 41,599.00 52,705.00 Solsona 551,560.00 1,744,356.00 2,295,916.00 Total, Ilocos Norte - 8,902,412.00 15,999,526.00 24,901,938.00 ========== ============ ============ Province of Ilocos Sur Municipalities Cabugao 468,078.00 468,078.00 Magsingal 524,727.00 524,727.00 San Juan 1,529,110.00 1,529,110.00 Sinait 936,156.00 936,156.00 Sto. Domingo 676,894.00 676,894.00 Quirino 45,063.00 45,063.00 Tagudin 742,162.00 108,683.00 351,283.00 1,202,128.00 Total, Ilocos Sur 742,162.00 153,746.00 4,486,248.00 5,382,156.00 ========== ========= =========== =========== Province of La Union Municipalities Bacnotan 265,365.00 862,795.00 1,128,160.00 Balaoan 1,233,154.00 3,906,780.00 5,139,934.00 Luna 255,305.00 808,692.00 1,063,997.00 San Fernando City 58,796.00 186,512.00 245,308.00 San Juan 284,144.00 914,050.00 1,198,194.00 Santol 61,255.00 194,342.00 255,597.00 Sudipen 77,575.00 245,598.00 323,173.00 Naguilian 152,881.00 483,762.00 636,643.00 Pugo 43,280.00 47,040.00 148,850.00 239,170.00 Total, La Union 43,280.00 2,435,515.00 7,751,381.00 10,230,176.00 ======== =========== =========== ============ Province of Pangasinan Municipalities Burgos 19,719.00 19,719.00 Bayambang 194,761.00 882,141.00 251,501.00 1,328,403.00 Calasiao 20,040.00 20,040.00 Malasiqui 4,444,057.00 1,635,135.00 4,051,831.00 10,131,023.00 Mapandan 128,444.00 93,892.00 198,187.00 420,523.00 Sta. Barbara 3,560,923.00 1,079,946.00 7,088,386.00 11,729,255.00 Manaoag 4,516,040.00 4,516,040.00 Mangaldan 867,919.00 867,919.00 San Fabian 27,725,719.00 27,725,719.00 San Jacinto 14,578,177.00 14,578,177.00 Alcala 25,442,037.00 25,442,037.00 Bautista 644,198.00 505,808.00 1,150,006.00 Binalonan 58,366.00 41,032.00 80,470.00 179,868.00 Laoac 2,626,030.00 250,000.00 2,876,030.00 Sto. Tomas 274,913.00 9,897,749.00 10,172,662.00 Sison 5,966,012.00 8,738,625.00 14,704,637.00 Villasis 9,594,506.00 9,594,506.00 Asingan 555,958.00 555,958.00 Balungao 15,834,795.00 15,834,795.00 Natividad 75,994.00 75,994.00 Rosales 4,851,631.00 4,851,631.00 San Manuel 5,507,581.00 5,507,581.00 Sta. Maria 12,847,022.00 12,847,022.00 Umingan 323,975.00 323,975.00 Total, Pangasinan 8,386,551.00 13,283,058.00 153,783,911.00 175,453,520.00 ========== ============ ============ ============ Province of Cagayan Municipalities Alcala 12,848,448.00 2,203,853.00 13,250,671.00 28,302,972.00 Baggao 3,685,994.00 803,050.00 4,469,329.00 8,958,373.00 Gattaran 7,151,442.00 7,151,442.00 Gonzaga 918,108.00 918,108.00 Piat 2,160,874.00 2,160,874.00 Sto.Nio 3,079,228.00 3,079,228.00 Amulung 32,163,449.00 6,742,972.00 32,252,549.00 71,158,970.00 Iguig 190,689.00 190,689.00 Penablanca 975,162.00 251,455.00 1,044,147.00 2,270,764.00 Solana 6,275,344.00 1,774,745.00 7,272,394.00 15,322,483.00 Tuao 5,269,838.00 5,269,838.00 Tuguegarao City 2,893,188.00 3,561,401.00 14,068,510.00 20,523,099.00 Total, Cagayan 59,032,274.00 15,337,476.00 90,937,090.00 165,306,840.00 =========== =========== =========== ============ Province of Isabela Municipalities San Pablo 244,232.00 119,232.00 363,464.00 Aurora 17,733,180.00 10,609,668.00 38,764,859.00 67,107,707.00 Burgos 6,788,888.00 6,788,888.00 Gamu 3,534,358.00 701,870.00 2,092,465.00 6,328,693.00 Ramon 15,963.00 15,963.00 Total, Isabela 21,511,770.00 11,446,733.00 47,646,212.00 80,604,715.00 =========== =========== =========== =========== Province of Quirino Municipalities Maddela 303,757.00 759,483.00 1,063,240.00 Nagtipunan 66,047.00 224,049.00 290,096.00 Total, Quirino - 369,804.00 983,532.00 1,353,336.00 ========= ========= ========== Province of Nueva Vizcaya Municipalities Bagabag 287,189.00 1,513,709.00 1,800,898.00 Bayombong 87,770.00 410,294.00 498,064.00 Diadi 11,198.00 38,411.00 49,609.00 Quezon 46,278.00 62,875.00 109,153.00 Solano 28,379.00 120,599.00 148,978.00 Villaverde 17,755.00 17,755.00 Total, Nueva Vizcaya - 478,569.00 2,145,888.00 2,624,457.00 ========= ========== ========== Province of Nueva Ecija Municipalities Cuyapo 52,665.00 89,412.00 142,077.00 Nampicuan 12,595.00 12,595.00 Total, Nueva Ecija - 65,260.00 89,412.00 154,672.00 ======== ======== ========= Province of Tarlac Municipalities Anao 69,070.00 319,416.00 388,486.00 Moncada 2,011,999.00 9,924,401.00 11,936,400.00 San Manuel 2,182,543.00 10,231,531.00 12,414,074.00 Total, Tarlac - 4,263,612.00 20,475,348.00 24,738,960.00 ========== ============ =========== Province of Occ. Mindoro Municipality Rizal 300,000.00 300,000.00 Total, Occidental - - 300,000.00 300,000.00 Mindoro ========= ======== Province of Mis. Oriental Municipalities Alubijid 3,193,621.00 675,533.00 1,140,522.00 5,009,676.00 El Salvador City 297,324.00 563,930.00 861,254.00 Gitagum 1,914,248.00 741,405.00 1,865,876.00 4,521,529.00 Initao - 42,730.00 42,730.00 Laguindingan 436,463.00 1,387,934.00 1,824,397.00 Libertad 54,391.00 11,651.00 77,547.00 143,589.00 Opol 78,196.00 196,769.00 274,965.00 Total, Misamis Oriental 5,162,260.00 2,240,572.00 5,275,308.00 12,678,140.00 ========== ========== ========== =========== Province of North Cotabato Municipality Pikit 1,570,653.00 87,012.00 804,708.00 2,462,373.00 Total, North Cotabato 1,570,653.00 87,012.00 804,708.00 2,462,373.00 ========== ======== ========= ========== Province of Maguindanao Municipality Pagalungan 50,641.00 832,712.00 883,353.00 Datu Montawal (Pagagawan) 58,124.00 329,644.00 387,768.00 Total, Maguindanao - 108,765.00 1,162,356.00 1,271,121.00 Grand Total 96,448,950.00 59,172,534.00 352,484,409.00 508,105,893.00 =========== =========== ============ ============ ANNEX C Share of Local Government Units from the Collection of Tobacco Excise Taxes under RA Nos. 7171 and 8240 Report on Fund Utilization and Status of Program/Project Implementation For the Quarter Ended ______ Fund Date of Type of Name/Title Specific Mechanism/ Estimated Amount Estimated Program/ Source Notice of Program/ of Program/ Location Mode of Number of Period of Project Authority Project Project Implementation Beneficiaries Received Obligation Disbursement Completion Status to Debit Account Issued (NADAI) _______ _________ __________ ________ _________ ____________ ____________ _______ ___________ _________ _________ ______ _______ _________ __________ ________ _________ ____________ ____________ _______ ___________ _________ _________ ______ Prepared by: The Local Finance Committee (LFC) Attested by: ______________________________ ______________________________ Local Budget Officer Local Chief Executive ______________________________ Local Treasurer ______________________________ Local Planning and Development Coordinator Instructions: 1. The report shall be prepared by the LFC in coordination with the other local officials concerned ( e.g. , local accountant on the allotment, obligation and disbursements; local engineer on the status of infrastructure projects, as may be applicable). 2. The fund source shall be based on the NADAI issued to the LGUs. 3. The type of program/project shall be identified consistent with the authorized uses enumerated under this LBM. RA No. 7171 Cooperative projects; livelihood projects; agro-industrial projects; or infrastructure projects RA No. 8240, as amended Support programs for tobacco farmers shifting to production of other agricultural products; programs that will provide financial support for tobacco farmers who are displaced or who cease to produce tobacco; cooperative programs; livelihood programs and projects; agro-industrial projects; or infrastructure projects 4. Amount received refers to the amount received by the LGU as its share; it is the amount indicated in the NADAI. Obligation refers to the total amount obligated by the LGU as of reporting period. Disbursement refers to the total amount paid by the LGU as of reporting period. 5. The estimated period of completion refers to the projected date (month and year) to complete the program/project. 6. The status of programs/projects refers to the percentage of physical completion as of reporting period. aDSIHc