Guidelines for the Evaluation of New or Increased Fees Proposed by Departments, Bureaus, Commissions, etc. ( NEDA Circular No. 01-08 )

July 25, 2008

NEDA CIRCULAR NO. 01-08

 

Memorandum Circular No. 137 dated July 30, 2007, requires all heads of departments, bureaus, commissions, agencies, offices, and instrumentalities of the National Government including government-owned and/or controlled corporations to seek prior clearance from the National Economic and Development Authority (NEDA) Board before authorizing the imposition of new fees or increases in existing fees.

This Circular is hereby promulgated to set the guidelines to be applied by the NEDA Secretariat, as the technical support arm of the NEDA Board, in the evaluation of proposals for new or increases in existing fees. TacSAE

1.0 GUIDING PRINCIPLES

1.1 Section 54 (1), Chapter 12, Book IV of Executive Order No. 292, s. 1987 (Administrative Code of 1987) gives the heads of bureaus, offices or agencies, upon approval of the concerned department head, the continuing authority to revise their rates of fees and charges. On the other hand, government owned and/or controlled corporations exercise the same authority pursuant to their respective charters.

1.2 Fees and charges entail costs to the public as well as affect the cost of doing business in the Philippines. Thus, the evaluation of new or increased fees/charges needs to be coordinated with stakeholders to ensure that rates are just and reasonable and to minimize if not avoid unintended impact on established national priorities and the general public.

2.0 SCOPE

2.1 This Circular shall apply to requests submitted by all departments, bureaus, commissions, agencies, offices, and instrumentalities of the National Government, including government-owned and/or controlled corporations for the imposition of new fees or increases in existing fees to cover the full cost of services rendered. aDHCEA

2.2 This Circular shall not apply to the following fees and charges:

a. Those processed by regulatory agencies in the exercise of their mandate pursuant to their charter to regulate their schedule of charges, tariffs or fares imposed by public utility companies or operators, such as those in the transport, water, power, and telecommunication sectors;

b. Those imposed by local government units pursuant to the Local Government Code and/or their charters, even if the purpose of said imposition is to recover the cost of the service rendered;

c. Those exempted by international agreements; and,

d. Those not subject to increase, namely: (i) fees and charges related to constitutionally mandated free or subsidized services, such as in education and in health services to indigents charged by departments, bureaus, offices, units, and agencies, including government-owned and/or controlled corporations; and, (ii) fees and charges imposed by the Department of Foreign Affairs for the processing of passports of Overseas Filipino Workers (Republic Act No. 8042, Section 36). CAaEDH

3.0 DEFINITION OF TERMS

For the purpose of this Circular, the following terms shall be construed to mean as follows:

3.1 NEDA Board refers to the country's premier social and economic development planning and policy coordinating body pursuant to EO No. 230. 1

3.2 NEDA Secretariat refers to the research and technical support arm of the NEDA Board.

3.3 National Government refers to the entire machinery of the central government, which includes the various departments, bureaus, commissions, agencies, offices, and instrumentalities under its jurisdiction, as distinguished from the different levels of local governments. For brevity, these shall hereinafter be referred to as agencies.

3.4 Government-Owned and/or Controlled Corporations, hereinafter referred to as GOCCs, refer to corporations organized as stock or non-stock corporations vested with functions relating to public needs, whether governmental or proprietary in nature, and owned by the National Government directly or through its instrumentalities either wholly or, where applicable, as in the case of stock corporations, to the extent of at least fifty-one (51%) of its capital stock. This term shall also include financial institutions owned and controlled by the national government, but shall exclude acquired asset corporations and sequestered corporations. CIaDTE

3.5 Fees and Charges refer to levies imposed by agencies and GOCCs to recover the full cost of services rendered in the exercise of their administrative and/or regulatory functions.

3.6 Full cost refers to the aggregate of (1) direct costs (supplies/materials and salaries/wages of personnel involved) and appropriate overhead expenses incurred in rendering the service; and, (2) such other readily identifiable incidental expenses incurred in rendering the service by the agencies and GOCCs. In the case of a national government agency, full cost shall be considered equivalent to the regular appropriation of the operating unit rendering the pertinent service as authorized in the General Appropriations Act or other relevant appropriation measures. In the case of a GOCC, it shall be equivalent to the operating budget of the unit involved. 2

3.7 Socio-economic impact refers to the intended or unintended changes in socioeconomic factors caused long after the introduction/implementation of an intervention such as development policies and programs.

4.0 NEDA TECHNICAL COMMITTEE ON FEES AND CHARGES

4.1 The Technical Committee on Fees and Charges (TCFC) is hereby created to evaluate proposals for new or increases in existing fees with the following composition:

Deputy Director-General	—	Chairperson
Director, National Planning and Policy Staff	—	Vice-Chairperson
Director, Agriculture Staff	—	Member
Director, Information Technology
Coordination Staff	—	Member
Director, Infrastructure Staff	—	Member
Director, Legal Staff	—	Member
Director, Management Staff	—	Member
Director, Project Monitoring Staff	—	Member
Director, Public Investment Staff	—	Member
Director, Regional Development
Coordination Staff	—	Member
Director, Social Development Staff	—	Member
Director, Trade, Industry and Utilities Staff	—	Member

 The Chairperson shall be designated by the Director-General. The concerned members may designate their respective alternates in the TCFC. The TCFC may seek the assistance of NEDA Regional Offices and other NEDA units.

4.2 The TCFC shall be supported by the NEDA-Legal Staff as the Secretariat.

4.3 The TCFC shall meet every first week of the month or as often as may be necessary. DEScaT

5.0 EVALUATION PARAMETERS

The TCFC shall determine the appropriateness of the request based on the following:

a. Legal basis and/or authority of the agency/GOCC to collect fees and charges;

b. Purposes/objectives of the proposed new/revised fees and charges;

c. Current and projected inflation rates;

d. Socio-economic impact of the proposed new/revised fees and charges; and,

e. Other aspects/factors deemed relevant by the TCFC.

6.0 PROCEDURE FOR SUBMISSION AND EVALUATION

6.1 Agency/GOCC requests for NEDA Board clearance shall be submitted to the NEDA Director-General through the TCFC Secretariat. The request shall include the following:

a. Letter of request of the Department Secretary/Head of the GOCC, or his/her representative duly authorized in writing;

b. In case of GOCC, the letter request shall be accompanied by a Board Resolution approving the imposition of new fees or increase in existing fees; EcHaAC

c. Legal basis and/or authority of the requesting Agency/GOCC to collect fees and charges;

d. Agency/GOCC proposal containing the justification/reasons for imposition of new or revised rates;

e. Computational details, collection performance, process flow chart, financial statements and date of last increase;

f. Determination of the probable socio-economic impact/s of the new or increased fees and charges;

g. Report on the conduct of public/stakeholder consultation and the result thereof including the consultation with the Task Force on Revision of Fees and Charges, 3 if warranted; and,

h. Statement under oath that each of the documents submitted is an authentic and original copy, or a true and faithful reproduction or copy of the original, and that all statements and information provided therein are true and correct.

6.2 Upon receipt of the request, the TCFC Secretariat shall conduct the initial screening of the documentary requirements.

a. If complete, the TCFC Secretariat shall forward the request including supporting documents to the concerned NEDA Evaluating Staff (NES) for evaluation. The TCFC Secretariat, in acknowledging the acceptance of the request, shall inform the requesting Agency/GOCC concerned of the name and contact number of the NES. The NES thru the TCFC Secretariat may officially request for additional data/information necessary for its evaluation.

b. If incomplete, the TCFC Secretariat shall inform the requesting Agency/GOCC concerned in writing of the other documents needed not later than three (3) working days from the receipt of the request.

6.3 The request with complete supporting documents shall be evaluated within a period of thirty (30) working days from date of official acceptance by the TCFC Secretariat, including the period of consultation with the Task Force on Revision of Fees and Charges, if warranted. TDEASC

6.4 The result of the evaluation of the TCFC shall be submitted to the NEDA Director-General for consideration. The NEDA Director-General shall then officially inform the requesting Agency/GOCC concerned of the decision prior to presentation to the NEDA Board. The concerned Agency/GOCC shall be given five (5) working days from receipt of the Director-General's letter to respond.

7.0 AMENDMENTS

The TCFC reserves the right to make amendments, modifications, revisions or supplements to these guidelines consistent with existing laws, rules and regulations. However, no such revision, amendment or modification shall be effective unless approved by the Director-General.

 

8.0 RETROACTIVITY

All requests submitted to the NEDA Secretariat pursuant to Cabinet Resolution No. 1, s. 2007 and Memorandum Circular 137, s. 2007 shall be reviewed and processed in accordance with these guidelines.

9.0 EFFECTIVITY

This Circular shall take effect immediately. DHEaTS

(SGD.) AUGUSTO B. SANTOSActing Director-General

Footnotes

1. Reorganizing the National Economic and Development Authority.

2. Section 3.5, DOF-DBM Joint Circular No. 2-94, December 14, 1994.

3. The Task Force on Revision of Fees and Charges is mandated to monitor compliance with EO 197, s. 2000; to provide technical assistance in upgrading the rates of fees and charges, upon the request of agencies; and, to pass upon any request for exemption from EO 197. ACDIcS