EXECUTIVE ORDER NO. 41
EXECUTIVE ORDER NO. 41 -
REORGANIZING THE ADMINISTRATIVE STRUCTURE OF THE MUNICIPAL DEVELOPMENT
FUND, CONSOLIDATING ITS FUNCTIONS IN THE DEPARTMENT OF FINANCE AND FOR
OTHER PURPOSES
WHEREAS,
the Constitution declares it a policy of the State to ensure the
autonomy of local governments;
WHEREAS. the 1991 Local Government Code provides for a more responsive
and accountable local government structure instituted through a system
of decentralization whereby local government units have been conferred
more power, authority responsibilities, and resources;
WHEREAS, this system of decentralization has created a need for local
government units to have greater access to sources of funding for
development projects;
WHEREAS, the present administrative structure of the Municipal
Development Fund could be improved to attain these ends;
NOW THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
Philippines, by virtue of the powers vested in me by law, do hereby
order and direct:
Section 1. The Municipal Development Fund. — As
provided for in Presidential Decree No. 1914, the Municipal Development
Fund, hereafter referred to as MDF, is:
(a)
a Revolving Fund which shall be made available to local governments
(provinces, cities and municipalities) as loans which shall be treated
as trust funds and amortized by local governments out of their general
fund sources; and
(b)
capitalized and funded by proceeds of foreign loans, assistance or
grants made available to local governments for specific purposes,
project components and activities set forth in international
agreements, including amortizations (principal and interests) paid by
local governments.
Sec. 2. Reorganization. — The MDF is hereby
reorganized, functionally and structurally, in accordance with the
Organization Chart incorporated herein as an Annex hereof, and pursuant
to the provisions of this Executive Order.
The reorganized MDF will be an office under the Department of Finance
and is hereby renamed Municipal Development Fund Office, hereafter
referred to as MDFO. It will integrate the existing technical functions
handled by the Central Projects Offices of the Department of Public
Works and Highways and other implementing government agencies and the
financial functions of the Municipal Development Fund under the Bureau
of Local Government Finance-Department of Finance under one office. The
expanded functions will entail additional personnel complement,
resources and funding.
Sec. 3. Mandate. — The MDFO shall continue to
perform the following functions:
(a)
as a source of credit finance in support of the decentralization of
services from the national to the local levels of government;
(b) promote
the acceptability of borrowing as a means of financing a wide range of
local government investments;
(c) promote
and assist local governments in the selection of well-justified and
high-quality investments in infrastructure projects and public
facilities;
(d) encourage
a cost-recovery approach to the provision of suitable public services
through the levy of appropriate levels of fees and users’ charges.
In addition, the MDF shall:
(e) perform
loan and credit operations within the context of a financially-viable
and stable credit institution;
(f) provide
credit finance and/or grants to LGUs for the development of sustainable
socio-economic development projects.
(g) provide
technical assistance to LGUs to enhance their capacity to conduct
project identification and selection, loan proposal preparation, and
project management and monitoring;
(h) issue bond
indebtedness and other forms of securities to help finance LGU
projects; and
(i) develop a
system for monitoring LGU creditworthiness and graduating creditworthy
LGUs to private sources of capital.
Sec. 4. The MDFO Policy Governing Board. — The
affairs and business of the MDFO shall be directed, its properties
managed and preserved, and its power exercised by an MDFO Policy
Governing Board to be composed of:
Secretary
of Finance or his duly
designated
Undersecretary
Chairman
Deputy Director General, National
Economic and Development
Authority, or his
representative Member
Undersecretary of Public Works and
Highways, or his
representative Member
Undersecretary of the Budget and
Management, or his
representative
Member
Undersecretary of the Interior and Local
Governments, or his
representative
Member
The representative of the Undersecretary members shall be of a rank not
lower than Assistant Secretary level.
The MDFO Executive Director shall act as an ex-officio member of the
MDFO Policy Governing Board.
Sec. 5. Powers, Duties and Authority. — The Policy
Governing Board shall have, among other powers, the following duties
and authority:
(a)
to formulate policies necessary to effectively carry out the provisions
of this Executive Order.
(b) to adopt,
amend or change, the rules and regulations as may be necessary for the
effective operation of the MDFO in conformity with this Executive
Order, existing laws, and international agreements.
(c) to approve
all MDFO loans, credits and grants and other credit accommodations and
may delegate such approving authority within the MDFO;
(d) to
prescribe such terms and conditions to govern the granting of loans,
credits and grants, and other credit accommodations consistent with the
provisions of this Executive Order and international agreements;
*(f) to create
and establish a “Provident Fund” which shall consist of contributions
made by both the MDFO and its officers and employees to a common fund
for the payment of benefits to such officers and employees;
(g) to acquire
and/or dispose supplies, property and equipment for the MDFO in
accordance with existing rules and procedures on procurement and
disposal of supplies, property and equipment; and
(h) to perform
such other functions and powers as the President of the Philippines or
provisions of existing laws may require.
Sec. 6. The Board’s Staff. — The Board shall have
a staff Secretariat, and an Executive Committee which shall meet upon
the call of the Chairman or any two (2) of its members, whenever urgent
matters requiring Board action have to be acted upon prior to the next
scheduled meeting.
Sec. 7. The Executive Director. — The Chief
Operating Officer of the MDFO shall be the Executive Director who shall
be appointed by the Policy Governing Board with the approval of the
President of the Philippines.
The Executive Director shall be assisted by Consultants and Advisers
hired for specific assignments.
The Board, by rules and regulations, shall determine the powers,
functions and duties of the Secretariat and the composition of the
Executive Director’s staff.
Sec. 8. The Deputy Executive Directors. — The
Policy Governing Board shall appoint, upon the recommendation of the
Executive Director, a Deputy Executive Director for Operations, and a
Deputy Executive Director for Administration and Finance.
The Board, by rules and regulations, shall determine the powers,
functions and duties of the Deputy Executive Directors and the
Divisions, Section s, Offices and Units under their respective
supervision.
Sec. 9. The Deputy Executive Director for
Operations. — The Deputy Executive Director for Operations shall have
supervision over:
(a)
Account Management Division;
(b) Technical Operations Division;
(c) Evaluation and Appraisal Division;
(d) Financial
Management Division.
Sec. 10. The Deputy Executive Director for
Administrative and Finance. — The Deputy Executive Director for
Administration and Finance shall have supervision over:
(a)
Accounting Division;
(b) Administration and Budget Division;
(c) Corporate Planning and Management Information
Services Division;
(d) Financial Management Division.
Sec. 11. MDFO Field Offices. — The field office
for the MDFO will be established as the need arises and upon the
recommendation of the Executive Director and approval of the Board.
Each Field Office shall be composed of:
(a)
Account Management Unit;
(b) Technical Operations Unit;
(c) Evaluation and Appraisal Unit;
(d) Administrative and Finance Unit.
Sec. 12. Depository of the MDFO. — The Land Bank
of the Philippines, the Development Bank of the Philippines, the Bureau
of the Treasury or any such other qualified financial institutions
shall be the depository, disbursing and collecting agent of the MDFO,
subject to the terms, conditions and guidelines, as may be prescribed
by the Policy Governing Board and in accordance with the provisions of
international and other implementing agency agreements.
Sec. 13. Transitory Provision. — Until such time
as the reorganization prescribed herein has been completed and regular
positions in the MDFO re-incorporated in the General Appropriations
Act, or in a Charter of the Municipal Development Fund:
(1)
The MDFO shall utilize the plantilla positions provided under the
Second Municipal Development Project (MDP 11) Central Projects Office.
The key positions in the MDFO, as determined by the Policy Governing
Board shall be filled by consultants/contractuals funded by the Program
Support Account (PSA) and by secondment or detail of personnel of other
Government Departments, Bureaus, Offices and Agencies; Provided that
all personnel with money and/or property accountabilities, regardless
of the nature of their appointments, shall be bonded as required by
existing law.
(2) Priority
in the filling of positions shall be given to those functions which
relate to sub-project evaluation and appraisal (which is currently
under the Central Projects Offices): loan processing and releases
(which is currently under the Bureau of Local Government Finance) and
the provision of technical assistance.
Sec. 14. Notice or Consent Requirement. — If any
organizational change herein authorized is of such substance or
materiality as to prejudice third parties with rights recognized by law
and contract that notice to, or consent of, creditors is required to be
made or obtained pursuant to any agreement entered into with any of
such creditors, such notice or consent requirement shall be complied
with prior to the implementation of such organizational change.
Sec. 15. Funding of the MDFO. — Funds needed to
carry out the provisions of this Executive order shall be provided from
funds made available to the Department of Finance and the Municipal
Development Fund.
Sec. 16. Separately Clause. — Any portion or
provision of this Executive Order that may be declared unconstitutional
shall not have the effect of nullifying other portions or provisions
hereof as long as such remaining portions or provisions can still
subsist and be given effect in their entirety.
Sec. 17. Repealing Clause. — All rules and
regulations, resolutions of the existing Policy Governing Board of the
Municipal Development Fund, and other issuance or parts thereof, which
are inconsistent with the provisions of this Executive Order, are
hereby repealed or modified accordingly.
Done in the City of Manila,
Philippines, this 20th day of November, in the year of Our Lord,
nineteen hundred ninety-eight.
* Copied verbatim from documents obtained directly
from the Malacañang records (missing paragraph (e) of Sec. 5).