QuestionsQuestions (EXECUTIVE ORDER NO. 494)
It cites Section 6 of Article X of the Constitution, which guarantees LGUs a just share in national taxes automatically released to them as determined by law.
EO 494 states that portions totaling P20 Billion were set aside and placed under Unprogrammed Fund, presumably to withhold or manage budget/fiscal targets.
EO 494 refers to Alternative Center for Organizational Reforms, et al. vs. Hon. Ronaldo Zamora, et al. (G.R. No. 144256), where the Supreme Court held that setting apart portions of the IRA to form part of an Unprogrammed Fund was unconstitutional.
EO 494 states that the DOJ Opinion clarified that, in view of the Supreme Court’s declaration of unconstitutionality regarding the withholding of the P17.5 Billion IRA balance, such funds should now be released to the LGUs.
The funds must be released on an installment basis for seven (7) years starting CY 2007 up to CY 2013, or LGUs may avail in advance through a monetization program.
It allows LGUs to avail their respective shares in advance through an IRA Monetization Program.
It gives LGUs the option to collect in advance their shares from the trustee bank at a discounted value, net of interest and other charges from the trustee bank.
The Department of Finance (DOF), Department of Budget and Management (DBM), and Department of the Interior and Local Government (DILG).
DBM must determine each LGU’s share using the formula in the Local Government Code and issue a Notice of Payment Schedule (NPS) showing share and payment schedule.
DOF must provide a letter of confirmation that the P17.5 Billion constitutes an obligation of the Republic of the Philippines; endorse the Joint Issue Managers’ application for necessary financial features; and arrange requirements for opening a Special Trust Account, among other facilities.
Facilities include the Registry of Scripless Securities (RoSS), the Automated Debt Auction Processing System (ADAPS), and such other facilities required for the auction and implementation.
DILG must assist LGUs with dissemination, distribution, collection, and monitoring of Subscription Agreements (SAs) with the corresponding Sangguniang Resolution, and inform DBM of LGUs opting to monetize.
Government Financial Institutions (GFIs) serve as trustee banks. They establish a Special Trust Account for the program’s purposes.
All monetization transactions must be undertaken in accordance with existing accounting, auditing, and budgeting rules and regulations.
COA must provide guidelines in the recording of the obligation in the books of account of the National Government.
The other sections/provisions not affected by the unconstitutional part remain in full force and effect.
It takes effect immediately upon issuance; practically, agencies were expected to begin steps right away for release/monetization arrangements (e.g., NPS determination, endorsements, and trust account preparations).