AN ORDER CREATING THE PROVINCIAL MICROFINANCE UNIT-LIVELIHOOD FOR ECONOMIC RECOVERY AND ACCELERATION PROGRAM (PMU-LEAP) AND ITS IMPLEMENTING GUIDELINES

WHEREAS, Local Government Units are empowered to be self- reliant and exercise their power to provide investment support services including access to credit financing under Section 17, Par. 3, No. ix of Republic Act 7160 also known as the Local Government Code of the Philippines.

WHEREAS, the PAGLAUM Strategic Directions of the Province of Misamis Oriental is to implement a holistic service delivery focused on Participatory Governance, Agriculture Development for Poverty Eradication, Goal- oriented Tourism Development, Livelihood and Employment Through Industry Development, Aggressive Programs for Youth Welfare and Development, Unified Efforts for Health and Social Services Delivery, and Mobilization of Resources Thru Equitable Sharing.

WHEREAS, the Provincial Local Government Unit of Misamis Oriental yearns to develop and support the livelihood and economic activities of MISAMISNONS thereby improving their quality of life.

WHEREAS, there is a need to review, evaluate, improve and formulate pertinent policies related to livelihood assistance program of the Province of Misamis Oriental thus creating the Provincial Microfinance Unit.

NOW THEREFORE, I, PETER M. UNABIA, Governor of the province of Misamis Oriental, by virtue of the powers vested in me by law, do hereby order:

SECTION 1. PROGRAM TITLE. The Creation and Implementation of the Provincial Microfinance Unit-Livelihood For Economic recovery And Acceleration Program (PMU-LEAP) in the Province of Misamis Oriental

SECTION 2. STATEMENT OF VISION, MISSION and GOAL

A. VISION The Provincial Government of Misamis Oriental envisions to have an empowered, self- reliant and financially- literate people of Misamis Oriental and significantly improve their standards of living by increasing opportunities for productive economic investments by 2030.

B. MISSION The Provincial Microfinance Unit - Livelihood For Economic recovery And Acceleration Program (PMU-LEAP) exists to support MSMEs that aim to improve their production and services by assisting them holistically in developing their capacity as entrepreneurs.

C. GOAL To reduce poverty incidence by 15% to 20% in 2030, by empowering the MSMEs through community organizing, capacity building, organizational development and provide financial access.

SECTION 3. COMPONENTS. The Program shall be guided by the following components:

1. Learning Component

a. Community Organizing and Capacity Development

- Education and Training

- People organizations and networks

- Exposures

b. Values Reorientation and Moral Transformation

2. Economic Component

a. Microfinance and Investment

- Systems and Procedures

- Regular Planning

3. Administrative Component

a. Policy Development

b. Monitoring and Evaluation

c. Regulations and Legal Team

- Ensuring clear and best advice on legal matters

- Back up mechanism for challenges

4. Partnership Component

a. Government and Private Sector Institutional Partnership

- National Agencies

- NGO’s

- Academe

- Other Stakeholders

SECTION 4. CREATION OF the Technical Working Group (TWG), Program Fund Management and Evaluation Committee (PFMEC) and the MANAGEMENT TEAM

1. TECHNICAL WORKING GROUP – The composition of the technical working group shall be the following:

1.1 Composition of TWG -

1. Provincial Governor shall act as the Chairman

2. Provincial Cooperative Officer as the Co-Chair

3. Members:

Representatives from:

- Sangguniang Panlalawigan

- Provincial Planning and Development Office

- Provincial Accounting Office

- Provincial Treasurer’s Office

- Provincial Agriculture Office

- Provincial Veterinary Office

- Provincial Legal Office

- Provincial Social Welfare and Development Office

- CDA Region X

- DOLE Misamis Oriental

- DTI Misamis Oriental

- Landbank of the Philippines

- Academe (USTP & XU)

- Livelihood and Investment Development Consultants

- Department of Social Welfare and Development

- Other Concerned NGA’s

1.2 Responsibilities of TWG. The TWG shall:

a. Craft additional Policies and Guidelines on the availment and repayment scheme of the Provincial Microfinance Unit-Livelihood for Economic recovery and Acceleration Program (PMU-LEAP).

b. Define the criteria for eligibility for financial assistance in the form of loan for livelihood projects;

c. Identify the Measurement System to evaluate the submitted Project proposals/ Business plans of the applying parties;

d. Conduct monitoring & evaluation of PMU-LEAP operation;

e. Conduct regular meeting based on a schedule to be determined by the members of the technical working group.

f. Provide technical assistance/skills/capacity training and seminars to availing Micro Small Medium Enterprises (MSMEs).

2. PROGRAM FUND MANAGEMENT AND EVALUATION COMMITTEE. There shall be a Program Fund Management Evaluation Committee composed of the following:

2.1 Composition of PFMEC

a. Provincial Cooperative Officer – Chairman

b Provincial Planning and Development Officer – Co-Chair

c. Sangguniang Panlalawigan Member – Chairman on Cooperatives and MSME

d. Sangguniang Panlalawigan Member – Chairman on Economic Enterprise

e. Provincial Agriculturist

f. Provincial Veterinarian

g. Program Manager

Permanent Representatives from:

h. Provincial Legal Office

i. Provincial Accounting Office

j. Provincial Treasurer’s Office

k. Provincial Budget Office

l. Concerned NGA

2.2 Responsibilities of PFMEC. The PFMEC shall:

1. Review and evaluate Project Proposal/Business Plan of Micro Small Medium Enterprises (MSMEs) for financial assistance.

2. Conduct actual inspection, on-site visit and field evaluation to determine the feasibility of the proposed projects.

3. Approve and disapprove applications based on the applicant’s organizational and financial capability and project viability.

4. Recommend applications to the Governor for final approval and release.

5. Recommend policy enhancement for the effective implementation of the program.

6. Monitor the implementation of the financial assistance and the operation of the financed project.

3. MANAGEMENT TEAM. The Management Team shall ensure effective and efficient implementation of the plans, targets, and budgets of the program.

3.1 Functions.

1. Serves as the program secretariat

2. Develop database with socio-economic profile, Organized, and capacitated target partners

3. Conduct regular financial and enterprise situational analysis/forum of the province for inclusion in the program strategic plans and economic briefings of the PPDO.

4. Submit annual report to PFMEC on the management operations of PMU-LEAP

5. Submit relevant policy recommendations to the PFMEC.

6. Ensure proper documentation of all funds releases and payments in coordination with the provincial accounting and provincial treasurer’s office to monitor fund releases and implementation of projects.

3.2 Personnel. The following personnel shall be designated by the Governor and their corresponding functions:

1. Program Manager- He/ She must perform the following tasks:

1.1. Manage the daily program operation;

1.2. Supervise the working personnel under the PMU-LEAP;

1.3. Render a regular report to PFMEC & TWG on the program status and/or progress;

1.4. Ensure availability of sufficient funds for the operation through regular legislated allocation, crowdsourcing, or resource accessing.

1.5. Order notices of repayment/ collection.

2. Technical and Training Coordinator (Administrative Officer)- He/She must perform the following tasks:

2.1. Collate the reports, filled profiles, presentations, and other relevant documents necessary for the operation of the program;

2.2. Facilitate the process of the loan application;

2.3. Organize a filing system for safe recordkeeping;

2.4. Arrange schedule of meetings, on- site inspection, trainings and workshops;

2.5. Coordinate with national agencies for additional technical support to the availing MSMEs.

3. Finance Administration (Accountant and Collection Officer)- They must perform the following tasks:

3.1. Extend appropriate support in terms of finance system and administration operation;

3.2. Ensure compliance with mandated regulatory provisions applicable to the program.

4. Monitoring & Evaluation (Field Officers of 1^st and 2^nd District)– The must perform the following tasks:

4.1. Handle the operations in their respective districts;

4.2. Conduct needs assessment and submit their recommendations to the TWG;

4.3. Monitor regularly the fund utilization and physical status of the projects using the designed monitoring tool;

4.4. Submit relevant and up-to-date reports to the Program Manager to ensure sustainability of the projects.

SECTION 5. POLICIES AND IMPLEMENTING GUIDELINES

A. Target Beneficiaries

The assistance is open to all qualified MSMEs whose main business operations, but not limited to, are in the following sectors: Agri-Business, Food Services and Logistics.

The beneficiaries shall be residents and whose businesses shall be operating within Misamis Oriental.

B. Eligibility Requirements

Qualifications and requirements shall be eligible for assistance;

1.Must be duly registered with the Cooperative Development Authority (CDA), Securities and Exchange Commission (SEC), Department of Labor and Employment, Department of Trade and Industry, Bureau of Internal Revenue or any other appropriate agency empowered by law;

2. Must be duly registered business entity in their respective Local Government Unit;

3. Must have an updated Certificate of Compliance issued by CDA, if applicable;

4. Must have a copy of resolution stating that they have been accredited by the Sangguniang Bayan/Panglungsod for the current administration, if applicable;

5. Must have a Project Management Team which meets at least once a month, if applicable;

6. Must submit a Board Resolution for Cooperatives and Associations or a letter of intent for individuals seeking assistance;

7. Must submit a copy of proof of ownership or lease agreement of project site;

8. Must submit a viable Project Proposal/ Business Plan;

9. Must submit an Income Tax Return, if operating for more than a year;

10. Must submit a financial statement to assess the financial flow of their business operation;

11. Must have a separate savings or checking account that is intended solely for the livelihood program;

12. Must acquire certificate from C/MPDO or C/MSWD that grantee is development-oriented or an aggrupation of marginalized/less privileged sector of the society;

13. Must undergo Capability Building and Values Orientation with corresponding Certificate of Completion.

C. TERMS AND CONDITIONS. Cooperatives, Individual Enterprise and Community-based Organizations (CBOs) shall comply with the following terms and conditions:

1. Amount of Financial/ Loan Assistance - The loanable amount will depend on the need of the MSMEs and its capacity to pay which will be incorporated in the Project Proposal/ Business Plan. All loan assistance must be accompanied by a promissory note and/or Memorandum of Agreement.

2. Payment Terms - The loan is payable within the period of six (6) years which shall be paid either monthly, quarterly, semi-annually, or annually, depending on the terms of the contract.

3. Full default of payment is regarded when the beneficiary fails to complete the repayment after 3 consecutive demand letters are issued. Total amount of loan balance shall be automatically due and demandable once deemed full default.

4. Interest Rate - The whole amount shall be released in full and shall carry two point five percent (2.5%) per annum at diminishing balance.

5. Re-availment - MSMEs can only re-avail of additional assistance only after 50% payment of the previous assistance.

6. The details and specifications of the financial assistance through a loan program including penalties in case of late payments, or non-payment of the monthly amortization shall be reflected in the Memorandum of Agreement of each of the borrowers before the release of funds.

7. Applicants shall submit a filled out duly prescribed profiling form.

8. Applicants shall undergo necessary trainings and workshop relative to their business operation to be provided by the Provincial Microfinance Unit.

9. Applicants must present documents provided by a government regulatory body relative to the nature of their business (e.g. PCA, BFAR, DENR Certifications)

10. PFMEC shall provide due diligence to the applicant’s business activity.

11. Applicants must defend their Business plan/ Project proposal to the PFMEC.

12. Applicants that acquired at least 70 points in the assessment score by the PFMEC shall be endorsed to the Governor for final approval.

13. A Memorandum of Agreement (MOA) shall be entered into between the applicant and the Provincial Government of Misamis Oriental.

14. A Valid Official Receipt shall be issued upon claiming the proceeds of the livelihood assistance.

SECTION 6. FUND SOURCE AND MANAGEMENT

The program fund is sourced from the different Provincial Government Offices with livelihood assistance program.

The Provincial Government shall establish a separate trust fund account intended solely for the collection of the PMU-LEAP.

SECTION 7. REPAYMENT AND COLLECTION SCHEME

Repayment and Collection Scheme of PMU-LEAP are as follows:

1. Loan proceeds shall be deposited to declared bank account.

2. Repayments may be paid monthly, quarterly, semi-annually, or annually depending on the designed amortization schedule in the business plan and the Memorandum of Agreement.

3. Repayments may be done thru:

a. Over- the- counter at the Provincial Treasurer’s Office in a particular trust fund;

b. The designated collecting officer of the PMU- LEAP;

c. Post-dated- checks;

d. Auto- debiting system; and

e. Online payments

4. Proof of payment must be submitted to the Management Committee of PMU-LEAP for monitoring and evaluation purposes.

5. Other provisions regarding the repayment shall be further detailed in the Memorandum of Agreement.

SECTION 8. DELIQUENCY AND PENALTY CLAUSE

Borrowers are considered delinquent when they failed to pay three (3) monthly, one (1) quarterly, semi-annual or annual amortization, depending on the terms of the contract.

The PGMO have following actions against the delinquent borrower:

1. Demand letters shall be issued to delinquent borrowers.

2. Failure to pay shall be referred to the Provincial Legal Office for further appropriate legal actions.

3. Other relevant provisions and conditions are further detailed in the MOA entered into.

Borrowers who are in default will no longer be permitted to apply for loan assistance under PMU-LEAP and appropriate sanctions will be imposed upon the recommendation of the Provincial Legal Office.

SECTION 10. REPEALING CLAUSE

All orders or issuances not consistent herewith are hereby repealed or modified accordingly.

SECTION 11. EFFECTIVITY

This order shall take effect immediately upon signing hereof shall remain effective unless revoked, repealed or modified.

LET COPIES of this Executive Order be furnished all concerned for their information and guidance.

DONE this __________________, Province of Misamis Oriental, Philippines.

PETER M. UNABIA (SGD)

Provincial Governor