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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 880 -
REGARDING THE FUNDING OF GOVERNMENT ACTIVITIES FROM FOREIGN OR DOMESTIC
BORROWING SOURCES |
The Minister of the Budget
The Minister of Public Highways
The Minister of Public Works, Transportation and
Communications
The Governor of the Central Bank of the Philippines
The National Treasurer
The Chief of Staff, Armed Forces of the Philippines
All Heads of Ministries, Bureaus, Offices
Agencies of the National Government
All Assistant Secretaries for Finance and Management
WHEREAS, Heads of Office sometimes initiates foreign or domestic borrowings in order to finance projects, activities, or importations;
WHEREAS, the Constitution and budget law state that no funds may be spent unless these are covered by the necessary appropriations;
WHEREAS, it is necessary to ensure that energy borrowings are within approved budgetary levels and comply with Balance of Payments policy and regulations;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby Order and Instruct:
1.
Loans shall not be contracted by agencies of the National government,
including state universities and colleges, unless the full amount of
the loan is covered by "Obligational Authority" issued by the Ministry
of the Budget within the regular budget program. Similarly, loan
proceeds, whether in cash or in kind, shall be utilized only upon the
issuance of a Cash Disbursement Ceiling or equivalent, which shall be
within approved cash budget limits.
2. Contracts
for construction and other capital projects and for the purchase of
equipment, material or other items shall not be entered into without
the appropriate certification of funds availability, notwithstanding
the fact that such contracts include arrangements for deferred
financing.
3. The full
amount of contracts shall be covered by appropriations programmed and
released to the agency in the form of obligational authority as defined
under pertinent budget law.
4. Cash
disbursement ceilings or their equivalent shall be issued prior to the
utilization of loan proceeds, whether in cash or in kind, and shall be
issued in such amounts and at such times as may be consistent with
drawdowns on the loans concerned.
5. The payment
of interest and principal on the loans shall be covered by
appropriations in line with standard practice.
6. This
procedure shall apply to U.S. Foreign Military Sales (FMS) purchases of
the Armed Forces of the Philippines, to Philippine Government
importations funded from the Central Bank "Jumbo Loan" or other similar
consolidated borrowing funds, to loans contracted by the national
government in behalf of specific agencies or projects, and to national
government agencies which are otherwise authorized by law to borrow
directly.
7. The
instructions set forth in LOI 158 dated January 21, 1974 requiring,
among others, the approval in principle by the Monetary Board of the
Central Bank of the Philippines of the purpose and credit terms of all
foreign borrowing proposals of the Government, government agencies and
financial institutions, are hereby reiterated, and shall therefore
remain full force and effect.
Done in the City of Manila, this 21st day of June, in the year of Our Lord, nineteen hundred and seventy-nine.
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Since 19.07.98.
