Title
Use of SC 38 funds for Palawan projects
Law
Executive Order No. 683
Decision Date
Dec 1, 2007
Executive Order No. 683 allows for the utilization of funds from Service Contract No. 38 to finance development projects in Palawan, resolving a territorial dispute between the national government and the Province of Palawan, while ensuring compliance with existing laws and accounting regulations.
fees
revenues
receipts
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Legal Authority and Presidential Power

  • Presidential Decree No. 910, Section 8 authorizes the use of fees, revenues, and receipts from SC 38 as directed by the President.
  • The President exercises broad authority in utilizing these funds, particularly for development projects in Palawan, part of the Central Philippines Superregion targeted for tourism infrastructure.

Territorial Dispute and Revenue Sharing Issue

  • A pending court dispute exists between the National Government and Palawan Province over the territorial boundaries of the Camago-Malampaya Reservoir.
  • The dispute affects whether Palawan is entitled to 40% of the Net Government Share proceeds from SC 38 under Section 290 of Republic Act No. 7160 (Local Government Code).

Provision for Financial Assistance to Local Government Units

  • Section 25 of RA 7160 permits the President, upon request, to direct national agencies to extend financial, technical, or other assistance to LGUs.

Provisional Implementation Agreement (PIA)

  • The National Government and Palawan’s representatives have agreed on a PIA.
  • This agreement allows 50% of the disputed 40% of the Net Government Share of SC 38 proceeds to be used immediately for development projects benefiting Palawan’s people.

Authorization to Release and Allocate Funds (Section 1)

  • The Department of Budget and Management (DBM) is authorized to release funds to implementing agencies based on:
    1. Directive from the Office of the President or written requests from Palawan LGUs.
    2. Certification that projects align with Palawan’s and the National Government’s development programs.
    3. Certification from the Bureau of Treasury on fund availability from the specified share.
  • DBM’s releases are subject to government accounting rules and actual collections.

Accountability and Financial Management (Section 2)

  • Implementing agencies receiving funds are accountable for project implementation and expenditure.
  • DBM may permit these agencies to open special accounts for the funds.
  • All disbursements adhere to existing budgetary and auditing rules.

Securities Issuance for Securitization of Shares (Section 3)

  • Despite the ongoing dispute, Palawan entities can securitize their shares in the 50% portion of the disputed 40% of Net Government Share.
  • DOE, in coordination with the Department of Finance, will prepare the relevant Net Government Revenues statement through June 30, 2010.

Preservation of Judicial Proceedings (Section 4)

  • Fund releases under this order do not affect ongoing judicial disputes or final rulings regarding jurisdictional claims of Palawan under RA 7160.

Implementation Guidelines (Section 5)

  • DBM is empowered to issue guidelines to ensure the orderly execution of funding provisions.

Repeal of Conflicting Rules (Section 6)

  • Any existing orders, rules, or regulations inconsistent with this Executive Order are repealed or modified accordingly.

Effectivity and Publication (Section 7)

  • The Executive Order takes effect 15 days after publication in a newspaper of general circulation.

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