QuestionsQuestions (OWWA MEMORANDUM OF INSTRUCTIONS NO. 099)
It is an administrative memorandum/instruction (an OWWA/DOLE implementing issuance), not a statute. It prescribes the general policies and detailed implementing guidelines on the utilization and disbursement of the OWWA Expanded Livelihood Fund (ELF).
The FUND refers to the P20M revolving fund appropriated pursuant to Board Resolution No. 101 (1990). It also includes the principal, interest earned from deposits/investment, interest from loans under the program, the 2% surcharge on delinquent accounts, proceeds from sales or acquired assets, and any special appropriations.
Item 1 (Bridge Fund for NLSF loan) is exclusively for amortization to NLSF when collections are insufficient; allocation is P3.0M. Item 2 (Loan Fund for Non-collateralized Window) is P1.4M. Item 3 (Seed Fund for Small & Microenterprise Financing Scheme/Multilevel livelihood) is P15.6M.
It may only be used exclusively for paying amortization to the National Livelihood Support Fund (NLSF) when actual collection is not sufficient to meet maturing obligations.
It is fully decentralized, with full implementation entrusted to the Regional Units. The Fund is transferred to Regional Units and disbursed according to the memorandum and regional financial management. Each region is allocated a total of P100,000.00 for this scheme.
A monthly report on disbursement must be submitted to the Fund Management Division (FMD)-RPD for recording, which then endorses it to the Resident Auditor for post audit.
Borrowers must open a savings account (deposit only) with any reputable bank and deposit an initial P200.00, considered as the proponent’s equity. During amortization, the borrower must deposit an amount equivalent to 25% of the amortization due per period, in addition to regular downpayment under the program.
For individual guarantors: (1) not a spouse of the applicant, (2) locally employed, and (3) salary per annum of at least P12,000.00 (with proof such as ITR or certificate of employment and an ID card).
The organization must be (1) duly registered with the appropriate government regulatory agency, and (2) have a current ratio not falling below 2:1.
Primary Beneficiary: OCW-returnees or their immediate family whose overseas employment has ceased. Secondary Beneficiary: immediate family of an OCW still gainfully employed—legitimate spouse with marital consent; for a single OCW, parents and single brothers/sisters may avail with proper authorization.
Non-collateralized window: individual projects requiring additional capital of P5,000.00 and below, and group loans with a P50,000.00 loan ceiling (as stated). Micro-enterprise financing: individual additional capital over P500.00 to P15,000.00; group additional capital P5,000.00 to P500,000.00 with total project cost not exceeding P50,000.00. Small enterprise: additional capital over P15,000.00 to P50,000.00; total project cost up to P1.0M. Impact projects: for group projects meeting impact criteria and related limits (and loan ceiling referenced in loan factor/approval thresholds).
Non-collateralized window: Individual loans: 10% (as stated). Group loans: 6%. Additionally, the memorandum includes an interest rate differentiation tied to amount: for P500.00–15,000.00, 12%; and over P15,000.00, 15%.
Non-collateralized window: 95:05. For Micro-enterprise financing: 85:15 for secondary beneficiary and group projects; 95:05 for primary beneficiary. For Small enterprise financing: 80:20 for secondary beneficiary and group projects; 85:15 for primary beneficiary.
ELDD-endorsed approved loans are recorded by the Project Assistant (P.A.), forwarded to FMD Chief to initiate a Disbursement Voucher (DV). FMD does not accept loan dockets without proper documents. DV is prepared by P.A., certified by Department Head (lawful, necessary, supervised), and accounting entries by RPD Accountant (adequate funds and legality). Internal Audit verifies control. Deputy Administrator approves DV, then Cashier prepares checks. Signing/countersigning depends on amount thresholds (e.g., signed by Department Head and FMD Chief for ≤P50k, countersigned by Program Manager for ≤P50k, further countersigning by DA/Administrator for higher amounts). COA does post-audit.
After release, proponents receive orientation on the Promissory Note/Deed of Mortgage, importance of business plan compliance, and monthly amortization/penalty policies, plus forms/instructions. Initial project site visit within 15 days after loan release. Regular visits monthly for the first three months for newly funded projects; thereafter monitoring forms at frequency determined by the PMO. Progress reports are prepared after every visit; Terminal Report prepared upon full payment to serve as basis for re-loan. Monitoring reports from regions must be submitted to Head Office within 7 days after the reference month.
Granted if business is hardly hit by natural calamity; struck by man-made calamity; borrower met accident/contracted disease causing closure/low operation; amortization due date falls during harvest season due to timing in business cycle; gestation periods extended erroneously; high/optimistic projections not realized in actual operations; loan is fully liquid and borrower wishes shorter term; or all other means exhausted and borrower must continue drawing for basic necessities. Denied for mismanagement or diversion of funds without prior notice causing low sales.
Real estate: Regional Units send demand letter; Legal Counsel sends final demand; then extra-judicial foreclosure with Sheriff’s Office under Act 3135 as amended by RA 4118; notice to mortgagor is imperative; after filing, notice sent to mortgagor; publication in a newspaper of general circulation for three consecutive weeks; redemption one year from registration of Certificate of Sale; after one year, highest bidder petitions sheriff for final deed of sale. Chattel: demand letters first; Legal Counsel files extra-judicial foreclosure under Act 1508; no notice needed due to risk of absconding; no publication required; posting of notice for 5–10 days (not exceeding 10); certificates of sale are final without redemption.