RP-US Assistance Agreement for Mindanao Peace and Development Activities

DOJ OPINION NO. 064 , s. 2007 November 7, 2007 Undersecretary Virgilio L. Leyretana Chairman Mindanao Economic Development Council (MEDCo) Malacaang, Manila Sir : This refers to your letter requesting an opinion pertaining to the Assistance Agreement between the United States of America and the Government of the Republic of the Philippines for Mindanao Peace and Development (MPAD) Activities, particularly on the provision under Art. 5, 1 (a), thereof, to quote: TCAHES Article 5. Conditions Precedent to Disbursement . xxx xxx xxx (a) An Opinion of counsel acceptable to USAID that (i) this Agreement has been duly authorized or ratified by, and executed on behalf of the Grantee, and (ii) that it constitutes a valid and legally binding obligation of the Grantee, in accordance with all of its terms, and (iii) all internal actions and approvals necessary to give effect to this Agreement have been obtained by or on behalf of the Grantee; and . . . As stated, the MPAD Agreement aims to develop needed infrastructure, improve the governance and social services, and expand the economic opportunity in vulnerable and conflicted areas of Mindanao (CAAM), with the end view or promoting peace and security. After submission to this Department of the Special Authority signed by President Gloria Macapagal-Arroyo, the Mindanao Economic Development Council (MEDCo), as the Grantee, has been duly authorized by the government to enter into the MPAD. This is very clear as the President has already issued in favor of the MEDCo Undersecretary, among other responsible officers of the MEDCo, a Special Authority to conclude and sign in accordance with law, for and on behalf of the Government of the Republic of the Philippines, the Mindanao Peace and Development Assistance Agreement with the Government of the United States of America. EHDCAI Anent the issue however, whether the MPAD Agreement is valid and legally binding obligation of the MEDCo, we find no legal and/or constitutional objection to the validity of the Agreement, except however to the provision under Section 6.2, thereof, providing tax exemption for the contractor, sub-contractor, grantee, sub-grantee or other organization and other related applicable persons, which extends to their 'personally owned automobiles', among others. In view thereof, we submit that the Department of Finance (DOF)/Bureau of Internal Revenue (BIR), be accorded the opportunity to consider the same as it involves matter within its policy sphere and jurisdiction. This time honored policy is dictated not only by practical considerations but by a sincere respect for the expertise on, and familiarity with, the policies relating to the subject (DOJ Opinion No. 1, s. 1983; No. 97, s. 1982; No. 123, s. 1980; and No. 149, s. 1976). cCDAHE Please be guided accordingly. Very truly yours, (SGD.) RICARDO R. BLANCAFLOR Undersecretary Officer-in-charge