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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 1161 -
ESTABLISHING THE PROCEDURE FOR FUNDING, CREDIT AND COLLECTION AND
RELATED MATTERS IN THE KILUSANG KABUHAYAN AT KAUNLARAN (KKK) |
The Director-General of Budget and Management
The Governor, Central Bank of the Philippines
The Chairman, Development Bank of the Philippines
The President, Philippine National Bank
The President, Land Bank of the Philippines
All others concerned
WHEREAS, the Kilusang Kabuhayan at Kaunlaran (KKK) is a new national movement that focuses on the implementation through livelihood projects of the imperatives of development;
WHEREAS, national budgetary resources totalling one billion pesos (P1,000,000,000) are being initially set aside to fund the livelihood projects, in the form of both loans and grants;
WHEREAS, primary importance is placed by the KKK on private enterprise and initiative;
WHEREAS, the magnitude of the resources devoted to KKK calls for the expeditious but careful handling of funds;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order and instruct:
1.
The Office of Budget and Management shall release the sum of one
billion pesos out of budgetary reserves of the national government as
the Capital Fund of the KKK, upon request of the Minister of Human
Settlements;
2. The funds
shall be released as follows: one hundred million pesos (P100 million)
each to the Development Bank of the Philippines, the Philippine
National Bank and the Land Bank of the Philippines and seven hundred
million pesos (P700 million) to the Central Bank of the Philippines;
3. The amounts
remitted to the Development Bank of the Philippines, the Philippine
National Bank and the Land Bank of the Philippines shall be in the form
of equity investment by the National government in these banks. The
cash received shall be set aside as the KKK Capital Revolving Fund, to
be utilized as the grant or "puhunan" component of the KKK program;
4. The amount
remitted to the Central Bank of the Philippines shall be held in trust
and released to rural banks and other participating banking
institutions as Special Time Deposits to be used for purposes of
supporting the loan component of the KKK. The Special Time Deposits
shall be made by the Central Bank on direction of the KKK;
5. The CBP,
DBP, PNB, and LBP shall be advised by the KKK of the loan and "puhunan"
components of individual projects as soon as these are approved. The
loan component shall be released by the CBP in accordance with the
procedure described in item no. 4 hereof while the "puhunan" component
shall be released by the DBP, PNB or LBP as the case may be, to the end
user;
6. Fund
releases to end users, including the amounts of the loan and "puhunan"
components and the financial institutions through which the loan
component will be administered, shall be made in accordance with the
project cycle and approval procedure;
7. The
"puhunan" component shall be released as indicated by the KKK. These
funds shall be used exclusively for the KKK program and any income
earned from the deposit or placement of such funds shall accrue to the
fund;
8. Loan and
"puhunan" loans shall be collected by the financial institutions
through which the funds were released to the end users and in
accordance with the original project approval;
9. Loans
granted by banks for approved livelihood projects may be rediscounted
with the Central Bank for purposes of supporting further KKK projects,
in accordance with such terms and conditions as may be approved by the
Central Bank;
10. Loans and
"puhunan" releases, including those made out of Central Bank
rediscounts, shall be fully guaranteed by the KKK Capital Fund held by
the Central Bank. Guarantee payments shall be deducted from the KKK
Capital Fund and remitted to the institutions concerned;
11. The KKK
shall assign the Capital Fund to the various regions, provinces, cities
or municipalities for purposes of indicating a working figure for loan
and "puhunan" approvals in the localities concerned. Approved loans and
"puhunan" shall be charged to the Capital Fund assigned to the
locality. Similarly, collections shall be credited and guarantees made
good shall be charged to the Fund thus assigned.
Done in the City of Manila, this 10th day of September, in year of Our Lord, nineteen hundred and eighty-one.
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Since 19.07.98.