Policy, purpose, and program objective
- The Letter of Instruction directs the utilization of rural development loan proceeds for infrastructure equipment acquisition and purchase to accelerate infrastructure development.
- The program objective is to provide immediate national government assistance to upgrade the equipment capability of local governments for project implementation.
- The Letter of Instruction aligns with a countryside development policy through expanded credit and technological support to agriculture, compact farming, rural irrigation, and feeder roads.
- The Letter of Instruction aims to provide depressed and lagging areas with a package of basic infrastructure inputs.
Legal basis and linkage to Rural Roads Program
- The Letter of Instruction is anchored on the Rural Roads Program being implemented by the Department of Local Government and Community Development.
- The Rural Roads Program proceeds are said to arise from a Loan Agreement between the Republic of the Philippines and the United States of America.
- The equipment acquisition and purchase contemplated by the Letter of Instruction is supported by the Rural Roads Program’s rural development loan proceeds through a programmed-amortization scheme for participating provinces.
- The Letter of Instruction creates a separate equipment financing program for LGUs that are not beneficiaries of the Rural Roads Program proceeds.
Who is covered and what areas qualify
- The Letter of Instruction covers provinces, cities, and municipalities that are not beneficiaries of the Rural Roads Program proceeds.
- The Letter of Instruction requires that the loan program be allocated on a concessionary and liberal amortization scheme for qualifying LGUs.
- The financing is directed for equipment acquisition and purchase of brand new construction and/or maintenance equipment for local infrastructure development implementation.
Required loan program for non-beneficiary LGUs
- The Philippine National Bank, the Development Bank of the Philippines, and the Land Bank of the Philippines must devise a Local Government Equipment Acquisition Loan Program.
- The program must provide concessionary and liberal amortization schemes to qualifying provinces, cities, and municipalities.
- The equipment financing is for acquisition and purchase of brand new construction and/or maintenance equipment.
- The program is designed to complement infrastructure development needs by strengthening local government capacity for project implementation.
Government coordination and guideline-making duties
- The Secretary of Local Government and Community Development and the Secretary of Finance must coordinate with the Philippine National Bank, Development Bank of the Philippines, and Land Bank of the Philippines.
- The Secretary of Local Government and Community Development and the Secretary of Finance must immediately formulate the guidelines and procedures necessary to carry out their respective responsibilities.
- The guidelines and procedures must support effective implementation of their responsibilities in the loan program’s administration.
Implementation timeline and directive immediacy
- The Letter of Instruction requires the banks and the two secretaries to act immediately.
- The directive to formulate guidelines and procedures is expressly framed as an immediate action to ensure effective implementation.