Creating a Special Revolving Fund to Apply Foreign Assisted Projects to Local Governments

March 29, 1984

PRESIDENTIAL DECREE NO. 1914

CREATING A SPECIAL REVOLVING FUND FOR PURPOSES OF FOREIGN ASSISTED PROJECTS APPLICABLE TO LOCAL GOVERNMENTS

WHEREAS, it is the stated policy of the National Government to promote self-reliance of local governments in undertaking their socio-economic development programs; casia

WHEREAS, in pursuance of this national policy, various international institutions are providing assistance to the Local Governments, thru the National Government;

WHEREAS, there is a need to establish an effective system to make available to the Local Governments these international assistance; acd

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby order and decree:

SECTION 1. The Municipal Development Fund. — There is hereby created a Revolving Fund to be known as the Municipal Development Fund, hereinafter called MDF, which shall be made available to Local Governments (provinces, cities/municipalities) thru the Ministry of Finance. The Ministry of Finance and local government concerned shall enter into appropriate agreement setting forth the terms and conditions thereof.

SECTION 2. Sources and Operations of Fund. — The MDF shall be capitalized and funded by proceeds of foreign loans, assistance or grants which are to be made available to the Local Governments for specific purposes, project components and activities set forth in international agreements, entered or to be entered into by the Government of the Philippines with foreign governments and international institutions (IBRD, ADB, USAID, etc.). Foreign loans and assistance released and credited to the MDF shall be covered by Advice of Allotment and Cash Disbursement Ceiling. Funds from the MDF shall be made available to the local governments as loans which shall be treated as trust fund and amortized by the local governments, out of their general fund sources. The amortization (interests and principal) made by the local governments to the MDF shall form part of and accrue to the MDF and shall be made automatically available for relending to finance other similar projects of the local governments. The local governments shall include in their annual/supplemental budget the proceeds of loan from the MDF, their utilization as well as amortization.

SECTION 3. For purposes of the proceeding and following sections of this Decree, a Central Project Office (CPO) under the policy directions of a Steering Committee or similar appropriate organizations shall be established as required in international agreements, provided that MOF, OBM, MLG, MPWH and NEDA shall be members in the said Committee. Financial policies, lending terms and technical requirements for MDF financing shall be approved by the committee in accordance with the provisions of international agreements.

SECTION 4. Administration of Fund. — The Ministry of Finance shall administer the MDF provided that the Land Bank, Development Bank of the Philippines or the Bureau of Treasury may be designated by the Minister of Finance as the depository, disbursing and collecting agent of the MDF subject to the terms, conditions and guidelines as the Minister of Finance may prescribe and in accordance with the provisions of international and other implementing agreement.

SECTION 5. Detailed implementing guidelines and procedures for the MDF and the provisions of this Decree shall be promulgated by the Steering Committee and in accordance with the provisions of international agreements entered or to be entered into by the Philippine Government in respect of the MDF.

SECTION 6. Any existing provisions of law, rules, regulations or other issuances in conflict or are inconsistent herewith are hereby repealed or modified accordingly.

SECTION 7. This decree shall take effect upon approval.

DONE in the City of Manila, this 29th day of March, 1984.

            Published in the Official Gazette, Vol. 80 No. 22 Page 3149 on May 28, 1984.