QuestionsQuestions (POEA MEMORANDUM CIRCULAR NO. 17, S. 1992)
To provide guidelines on when and how offset credits may be banked (including “forward credits”) under E.O. 120, s. 1993 and its IRR for offset projects under the Philippines Offsets Priorities Plan, facilitating investment and technology/know-how-related projects vital to the Philippine economy.
They are offset credits referred to in Section 3.1.1. Banking is allowed only for (a) credits in excess of an existing offset obligation arising from a Supply Contract with the Philippine Government represented by AFP or PNP; or (b) credits awarded in advance of a Supply Contract under the Offset Priorities Plan.
No. The circular expressly states that counterpurchase activities are not eligible for banking of credits.
It is the clearance issued by PITC to the foreign supplier (or countertrader) authorizing implementation of the proposed offset project. The supplier has one (1) year from the date of issue to start implementation; failure automatically nullifies the certificate and PITC may authorize another party to pursue the same project.
Only the holder of the Certificate of Banked Credits may use/apply them. In the example in the circular, if the countertrader performed the offset obligation and generated bankable credits, only the countertrader (not the foreign supplier) may apply/use those credits.
A foreign supplier or its designated countertrader is prohibited from acquiring/obtaining bankable offset credits from a third party, whether for valuable consideration or otherwise, for purposes of applying them to future offset obligations with the Philippine Government.
Yes only in limited circumstances: transfer/assignment is allowed if the assignee/transferee is a wholly or majority-owned subsidiary or parent company of the certificate holder. Conditions include: (a) credits must be used within the three (3)-year window; (b) the importing government agency/office must approve the application; (c) the assignee/transferee cannot further transfer/assign to another firm/entity; and (d) PITC’s final approval is required. Unauthorized transfers have no legal/binding effect on the Philippine Government.
The supplier/countertrader has three (3) years from the date of the Banking Approval Certificate to complete implementation. A two (2)-year grace period may be granted case-to-case. Failure to complete within these periods results in revocation of the Banking Approval Certificate and no offset credit accrues.
No refund obligation exists for fees paid in connection with banking, and no obligation accrues to PITC or the Philippine Government relative to the credits banked under these guidelines.
They must secure pre-approval and submit: (a) a Letter of Intent/application indicating excess credits or forward credits; (b) an Offset Project Proposal with feasibility study details; (c) a Company Profile including ownership structure and financial statements for last 3 years; and (d) payment of PITC processing fees of US$1,000 per application.
PITC must review and, if acceptable, approve within at least 30 days from submission of complete data/documents. Evaluations include whether the project is in the Offset Priorities Plan, consultations with the agency where the supply contract is expected, viability review with BOI/NEDA/industry sectors, endorsements needed for certain project types, and procuring agency acceptance allowing banking.
Upon completion, the supplier submits a Request for Accreditation (Annex A) and a Transaction Summary supported by, among others: proof of remittance (wire transfers) for equity investments; importation docs for property/equipment; title/lease docs (except residential); other supporting documents; and a Secretary’s Certificate approving the total equity investment value. Then they pay a monitoring/accreditation fee of 1% of the offset value.
They submit a Request for Accreditation and a Transaction Summary supported by: contracts between foreign supplier and offset recipient; an Acceptance Certificate; justification for the offset value claimed; supporting expenditure/receipts; and project completion documents such as final reports and certifications (e.g., IP Office certification, DOST registration for tech transfer). A 1% monitoring/accreditation fee is also required.
For accreditation, a monitoring/accreditation fee equal to 1% of the offset value submitted must be paid, payable to PITC Treasury. Non-payment is a ground to withhold/suspend processing and approval of the accreditation filed.
PITC must maintain: (1) a monitoring logbook for applications and progress; (2) records of certificates released, utilization, and approved transfers/assignments; (3) for completed projects, a Statement of Outstanding Offset Credits every six months; (4) for ongoing projects, a Performance Report Summary every six months. AFP and PNP Bids and Awards Negotiation Committees must be furnished copies of the 6-month statements/summaries.
No. It states that the provisions shall not apply retroactively to offset transactions already completed, undertaken, or approved for implementation prior to April 15, 1998.