Question & AnswerQ&A (EXECUTIVE ORDER NO. 252)
The primary purpose is to transfer the assets, functions, funds, personnel, and records of the Municipal Development Fund Office to an affiliate corporation of the Land Bank of the Philippines, aiming to develop a sustainable financing system for local government units (LGUs) to access financing for their investment needs at competitive terms.
The Department of Finance (DOF), through the Policy Governing Board of the MDFO, is tasked to transfer the functions, assets, and personnel to the Municipal Finance Corporation once it is fully organized.
The MFC, as an affiliate organized by the Land Bank of the Philippines, will serve as a corporate entity to provide financing to lower income local governments and social and environmental projects, acting as a principal source of financing local government projects and programs.
The Board of Directors includes the Secretary of Finance (Chairman), Secretary of the Department of the Interior and Local Government (Vice-Chairman), Director-General of the National Economic and Development Authority, Secretary of the Department of Budget and Management, President of the Land Bank of the Philippines, President of MFC, or their duly designated representatives, and a representative from a local government unit appointed by the President.
The MFC shall issue shares of stock to the Republic of the Philippines corresponding to the net value of assets and undrawn relending facilities transferred from the MDFO. The voting power of these shares is vested in the President of the Philippines or an ex-officio member of the Board.
No, the MFC may provide grants only in combination with loans, except where a purely grant basis is approved by the Investment Coordination Committee (ICC).
These loans passed on as grants, including cash or technical assistance, shall continue to be paid by the National Government.
If the organizational changes prejudice third parties, proper notice or comment must be obtained from creditors pursuant to existing agreements before implementation. The Secretary of Finance may renegotiate provisions of loan or grant agreements with foreign lenders as required.
Any portion declared unconstitutional shall not nullify other parts of the Order, as long as the remaining provisions can still subsist and be given full effect.
The Executive Order took effect fifteen (15) days after its publication in a newspaper of general circulation.