FIRB Resolution No. 002-15

March 27, 2015 FIRB RESOLUTION NO. 002-15 WHEREAS, the Millennium Challenge Corporation (MCC) has for its mission, the reduction of global poverty through the promotion of sustainable economic growth; WHEREAS, the United States of America, acting through the MCC, and the Government of Republic of the Philippines (herein referred to as Government), entered into a Millennium Challenge Compact (herein referred to as the Compact) on September 23, 2010 for the grant of MCC assistance amounting to US$434 million to facilitate poverty reduction through economic growth in the Philippines; WHEREAS, the Millennium Challenge Account-Philippines, Inc. (MCA-P) is a non-stock government corporation registered with the Securities and Exchange Commission (SEC) pursuant to Executive Order (EO) No. 849 (December 15, 2009), as amended by EO No. 48 (July 5, 2011); WHEREAS, the MCA-P was designated by the Government as the entity mandated to implement the Compact Program; WHEREAS, Section 17 of EO No. 849 and Article 2, Section 2.8 of the Compact Program provide that the Government shall assume all taxes, duties and other fiscal levies which may be imposed in the Republic of the Philippines, including any taxes, duties and other fiscal levies imposed by local government units on MCA-P, other parties involved in the development and implementation of the Compact, and transactions related to the development and implementation of the Compact except for taxes imposed on income, profits or gross receipts of natural persons who are citizens or permanent residents of the Philippines and legal persons organized under Philippine laws and Section 2.4 of the Program Implementation Agreement (PIA) (May 9, 2011) among and between the Government, MCA-P and MCC which provides that the Government agrees to assume from its national funds any taxes imposed on or in respect of the Compact Program; DHCSTa WHEREAS, the MCA-P has requested tax subsidy in the amount of PhP599,762,731.36 for 2015; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to approve the application of the MCA-P for tax subsidy in the amount of Five Hundred Ninety Nine Million Seven Hundred Sixty Two Thousand Seven Hundred Thirty One Pesos and 36/100 (PhP599,762,731.36) to cover the payment of twelve percent (12%) value-added tax (VAT) and income tax broken down as follows: Particulars Total Projected Value-Added Tax Income Tax Total Tax Subsidy Cash Requirement (VAT) Revenue Administration Reform 818,533,000.00 98,223,960.00 8,185,330.00 106,409,290.00 Project (RARP) Secondary National Road 3,655,740,765.66 438,688,891.88 36,557,407.66 475,246,299.54 Development Program (SNRDP) Environmental, Social and 267,000.00 32,040.00 2,670.00 34,710.00 Gender Assessment Kalahi CIDSS 1,112,500.00 133,500.00 11,125.00 144,625.00 Monitoring and Evaluation 227,172,500.00 27,260,700.00 2,271,725.00 29,532,425.00 Program Management and 75,908,411.50 9,109,009.38 759,084.12 9,868,093.12 Oversight Total tax subsidy requirement 4,778,734,177.16 573,448,101.26 47,787,341.77 621,235,442.66 Less: Available tax subsidy 21,472,711.67 balance from 2014 Total Tax Subsidy Application 551,975,389.59 47,787,341.77 599,762,731.36 for 2015 ============ =========== ============ The corresponding Certificate of Entitlement to Subsidy (CES) shall be issued covering the approved amount of PhP599,762,731.36 : Provided , that for purposes of tax subsidy availment, the MCA-P shall submit to the FIRB the certified list of contractors involved in the Compact Program: Provided, further , that such tax subsidy availment shall be in accordance with the terms and conditions of Section 14 of Republic Act No. 10651 (2015 General Appropriations Act), the Rules and Regulations to Implement the Subsidy Provision under Executive Order No. 93, and Revenue Regulations No. 12-2010. CHTAIc (SGD.) LAURA B. PASCUA Undersecretary Department of Budget and Management (SGD.) ADRIAN S. CRISTOBAL, JR. Undersecretary Department of Trade and Industry (SGD.) EMMANUEL F. ESGUERRA Deputy Director-General National Economic and Development Authority (SGD.) ESTELA V. SALES Deputy Commissioner Bureau of Internal Revenue (SGD.) ALEXIS F. MEDINA Director Bureau of Customs (SGD.) TRINIDAD A. RODRIGUEZ OIC-Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) JEREMIAS N. PAUL, JR. Undersecretary Department of Finance Presiding Officer-FIRB