Millennium Challenge Account — Philippines (2)

December 8, 2011 FIRB RESOLUTION NO. 012-11 SUBJECT MATTER : Millennium Challenge Account Philippines (2) 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 Republic of the Philippines, acting through the Philippine Government (Government), entered into a Millennium Challenge Compact (Compact) on September 23, 2010 for the grant of MCC assistance amounting to $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 dated December 15, 2009, as amended by EO No. 48 dated 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 provides 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) dated May 9, 2011 among the Government, MCA-P and MCC (PIA) provides that the Government agrees to assume from its national funds any taxes imposed on or in respect of the Compact Program; WHEREAS, the Fiscal Incentives Review Board (FIRB) issued FIRB Resolution No. 9-11 which grants tax subsidy to the MCA-P in the amount of Php151,358,582.00, with the condition that the corresponding Certificate of Entitlement to Subsidy (CES) shall be issued only upon submission by the MCA-P to the FIRB of its actual tax liability based on the assessment of the Bureau of Internal Revenue (BIR); WHEREAS, in view of the commitment of the Government under the Compact, the MCA-P requested the issuance of the CES to cover taxes and duties that are not yet due, and without the need of submitting BIR assessments; CADSHI WHEREAS, the MCA-P has requested that only value-added tax subsidy in the amount of Php11,831,159.87 be issued for calendar year 2011; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to amend the dispositive paragraph of FIRB Resolution No. 9-11 to read as follows: "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 Eleven Million Eight Hundred Thirty One Thousand One Hundred Fifty Nine Pesos and 87/100 (Php11,831,159.87) for value-added tax: Provided, that the corresponding CES shall be issued covering the amount of Php11,831,159.87 only: Provided, further, 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, finally, that such tax subsidy availment shall be in accordance with the terms and conditions of Section 13 of Republic Act No. 10147 (otherwise known as the 2011 General Appropriations Act), the Rules and Regulations to Implement the Subsidy Provision Under Executive Order No. 93, Revenue Regulations No. 12-2010, and Bureau of Customs Memorandum Order No. 44-2010." ESTDcC (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer-FIRB