The following guidelines and procedures have been formulated to rationalize the institutional relationship among the NEDA, DBM, DOF, and the CB, in the context of investment planning and financing and BOP monitoring. It shall be updated, as and when necessary, to enable the Investment Coordination Committee (ICC) to perform its mandate more effectively in the context of new policies/developments, and changes in the institutional structures and mandates among agencies and in government as a whole.
I.
Functions of the Investment
Coordination Committee (ICC)2
1.
Review
the fiscal, monetary and balance of payments (BOP) implications of major
capital projects (MCPs) and recommend to the President the timetable of the
implementation of these projects on a regular basis. In this regard, the
following shall be taken into account, among others:
a.
peso
requirements of the project in terms of the current and capital outlays needing
peso support directly or indirectly from the national government (NG) and/or
government financial institutions (GFIs);
b.
foreign
exchange requirements of the project in terms of the current and capital
outlays needing foreign exchange directly or indirectly from bilateral and/or
multilateral sources;
c.
sources
of funds;
d.
terms
and conditions of the proposed financing; and
e.
where
applicable, compliance to foreign debt ceiling under RA. 4860, as amended, per
certification of the Bureau of Treasury.
2.
Submit
to the President a status of the fiscal (budgetary), monetary (credit), and BOP
implications of MCPs.
3.
Review/evaluate
specific MCPs with respect to technical, financial, economic, social, and
institutional development, feasibility/viability as well as from the context of
sectoral plans and geographical strategies, and recommend to the NEDA Board for
approval3.
ICC Cabinet Committee
(ICC-CC)
Secretary of Finance - Chairman
Director-General of NEDA - Co-Chairman
Executive Secretary - Member
Secretary of Budget and
Management - Member
Secretary of Trade and
Industry - Member
Secretary of Agriculture - Member
Secretary of Energy - Member
Governor of the Bangko
Sentral ng Pilipinas - Member
Secretary of Coordinating
Council for
Private Sector Participation - Member
Other government agencies shall be invited to Committee
deliberations as and when necessary.
a.
Recommend
to the NEDA Board for approval decisions on specific projects/programs
submitted for ICC clearance as well as other issues concerning ICC;
b.
Recommend
to the NEDA Board an annual implementation program for MCPs through the
Medium-Term Public Investment Program (MTPIP); and
c.
Submit
to the President through the NEDA Board a status of the fiscal, monetary and
BOP implications of MCPs.
ICC Technical Board (ICC-TB)
The ICC shall be supported by a Technical Board (ICC-TB)
composed of senior representatives from the following agencies:
NEDA - Chairman
Department of Finance
- International Finance Group - Co-Chairman
Department of Finance
- Corporate Affairs Group - Member
Office of the President - Member
Department of Budget
and
Management - Member
Department of Trade
and
Industry - Member
Department of Agriculture - Member
Bangko Sentral ng Pilipinas - Member
Department of Environment
and
Natural Resources - Member
Department of Energy - Member
Coordinating Council for
Private
Sector
Participation - Member
Other government agencies shall be invited to participate
in ICC-TB deliberations, as and when necessary.
The Technical Board shall in general provide technical
support to the ICC-CC. It shall review all matters for the decision of the
Cabinet Committee and present recommendations thereon.
Duties and responsibilities of the ICC-TB:
a.
Discuss/deliberate
on the economic, social, financial, technical, institutional aspects of
projects, including policy issues as evaluated by the ICC Secretariat;
b.
Identify
priority areas for foreign financing to guide the Central Bank in the
evaluation and approval of foreign loan proposals;
c.
Elevate
to the Cabinet Committee for deliberation and decision recommended actions,
policies and issues concerning specific projects submitted to the ICC;
d.
Review
the status of the fiscal, monetary and BOP implications of MCPs and
e.
Consider/formulate
policies relevant to the review of projects in general and other matters
relevant to the performance of the functions of ICC.
The NEDA shall serve as the Secretariat of the ICC Headed by an Executive Officer, the ICC Secretariat shall provide technical support staff to the Technical Board and Cabinet Committee.
Duties and responsibilities of the
ICC Secretariat (in coordination with concerned ICC member agencies):
a.
Undertake
the evaluation of all produce submitted to the ICC with respects to technical,
financial, economic, social, institutional development, feasibility/viability
as well as policy aspects, and come up with comments/recommendations for
consideration by the ICC;
b.
Recommend
the relative priority of projects within and across sectors/regions;
c.
Undertake
continuing improvements on existing methods and guidelines for project
evaluation for dissemination to line/proponent (refer to Project Evaluation
Guidelines);
d.
Maintain
a Project Evaluation Monitor (PEM) of projects cleared by the ICC and/or
approved by the NEDA Board, including those in the pipeline for ICC clearance.
The PEM shall also capture NEDA Board conditions on specific projects for
compliance during loan negotiations;
e.
Conduct
studies supportive of the tasks of the ICC, as deemed necessary;
f.
Perform
administrative tasks such as:
-
preparing
agenda, minutes and other documents requiring action by the Technical Board
and/or Cabinet Committee
-
undertaking
follow-up actions in support of ICC decisions
-
serving
as the liaison between the Technical Board and the Cabinet Committee
-
providing
feedback information to proponent agencies on the status of projects reviewed
by the ICC
-
arranging
the meetings of the Technical Board and the Cabinet Committee and coordinating
the provision of the necessary logistics for the meetings
In general, ICC review is undertaken for projects requiring ICC clearance and/or NEDA Board approval as a pre-conditions for:
a.
loans
and guarantees by the national government;
b.
private
sector access to concessional ODA financing;
c.
obtaining
CB authority to negotiate foreign loans and Monetary Board approval of foreign
borrowing;4 and
d.
budgetary
appropriations.
ICC review/decisions shall cover:
1.
Any
independent undertaking of the public sector with total projects cost of P300
million and above, resulting in new capital formation in the economy,
irrespective of financing (i.e. whether for local funding or though
loans/grants for foreign funding).
New capital formation refers
to real investments involving physical additions to the capital stock of the
economy. Projects involving the above magnitude shall be classified as Major
Capital projects (MCPs). This shall include:
a.
single
or multipurpose projects;
b.
programs/project
packages consisting of independent or interrelated projects such as integrated
area development (IAD); nationwide or inter-regional infrastructures
rehabilitation/upgrading; nationwide infrastructure network such as roads,
power, rural electrification and telecommunications; and
c.
Individual
capital forming project components of program/sector loans which can be treated
as separate and distinct activities.
2.
Public
sector project with foreign borrowing of at least $5 million.
3.
Projects
of the private sector seeking concessional ODA financing under on-lending
arrangements and/or National Government financing guarantees. This shall
include infrastructure projects to be implemented under the BOT/BOO/BT schemes5
Due consideration shall be
given to availability of other financing sources including commercial loans,
special financing programs of the national government, equity, etc., and
financing viability of the project and position of the company.
4.
Other
projects/programs not defined above shall be considered on a case to case basis
(e.g., projects/programs not endorsed by the ICC Secretariat due to resolution
of certain policy issues).
The benchmark for the cut-off costs shall be updated by the ICC Secretariat as appropriate. Moreover, the exchange rates to be applied in converting peso costs to dollar terms shall be based on rates set by the Central Bank.
Attached as Annex A is a matrix indicating the specific courses of action to be undertaken for projects and program of the national government.
On the other hand, the
following items are excluded from ICC review/decisions:
1.
Public
sector projects/programs below the prescribed cut-off level,
a.
For
those requiring less than $5 million foreign borrowings, projects shall no
longer undergo ICC review but shall go directly to the NEDA Board for approval
as may be endorsed by the ICC
Secretariat, copy furnished ICC for notation.
b.
For
grant funding, projects will not require ICC clearance but shall be submitted
to the NEDA Board for approval on a case to case baiss.
2.
Program/policy
and sector loans incurred strictly for BOP and budgetary support which shall be
referred directly to the NEDA Board for approval;
3.
Projects
purely funded by local government units (LGUs) from their own resources;
4.
Recurrent
maintenance and operating expenditures funded under regular budgetary
appropriations;
5.
Acquisition
of spare parts for maintenance purposes;
6.
Projects
of the private sector under relending programs via special credit facilities;
and
7.
Non-capital
forming projects/activities-for technical assistance such as research,
training, and expert services.
I.
Identification/processing
of projects for ICC review
a.
Projects
that should be lined up for ICC discussions/deliberations will be drawn
primarily from the Medium-Term Public Investment Program (MTPIP) in the order
of their relative priority and target commencement schedule. That is, first
priority shall be given to projects whose implementation are targeted for the
first and second years of the MTPIP and whose loan negotiations are
forthcoming. Concerned proponent agencies shall ensure that MTPIP projects
scheduled for implementation in the current year are cleared by the ICC as
necessary.
b.
A
tentative two-month rolling agenda calendar of such projects shall be
predetermined by the ICC Secretariat to systematize the scheduling of ICC
meetings. Said agenda calendar shall nevertheless be flexible to accommodate
other well-prepared and priority projects of proponent agencies (including
those with major policy issues) requiring ICC clearance and/or NEDA Board
approval.
c.
Evaluating
staffs (i.e. NEDA Sector Staffs and
Regional Offices) shall ensure the completeness of submission of ICC
requirements (refer to #4 below) by proponent agencies. Projects without
complete documents shall not be calendared for ICC review.
d.
Projects
are initially reviewed by the ICC Secretariat for possible endorsement to the
ICC Technical Board and Cabinet Committee for clearance.
The DBM, GCMCC, and CB shall
be furnished by the proponent agency/GOCC with pertinent information on the
project for the evaluation of financing terms/options and external financing
requirements. This measures shall effect a simultaneous evaluation by the NEDA
secretariat, CB, GCMCC and DBM to streamline the process in the issuance, MB
approval-in-principle, and clearance for budgetary appropriations.
Once an ICC clearance has
been secured, the project is elevated to the NEDA board for approval, with the
issuance of the NEDA Board Resolution. Exceptions to this, however, include
projects involving foreign borrowings as program/policy and sector loans
incurred strictly for BOP/budgetary support which no longer undergo ICC review.
Rather, these projects can be referred directly to the NEDA Board for approval
as may be endorsed by the ICC Secretariat, copy furnished ICC for
notation/monitoring purposes
e.
The
responsibility of presenting the proposal to the ICC-TB, is lodged with the
proponent. In this regard, a checklist of possible issues which may be raised
at the ICC-TB level (e.g. budgetary, financial, environmental concerns, etc.)
shall be provided to proponent agencies for consideration in their presentation.
Subsequent presentation of the project to the ICC-CC shall be made by the
ICC-TB.
2.
Issuance
of ICC clearance/NEDA Board approval
a.
ICC
clearance shall be secured preferably before projects are appraised by foreign
funding agencies, and always prior to the issuance of approval-in-principle by
the Monetary Board as well as negotiation of project funding/signing of
financing commitment.
b.
In
case a project is cleared by the ICC prior to its appraisal by a prospective
funding source and the project experiences an increase/increment of more than
10 percent in total project cost after appraisal, then the project has to
undergo ICC reevaluation. The proponent should be able to explain the basis for
the revised cost figures. Projects with revisions in scope in any or all of its
components shall likewise undergo ICC reevaluation to the extent that this
would involve a corresponding change in project cost. However, if the change in
project costs and benefits have already been sufficiently captured in the earlier
sensitivity analysis and the project remains viable, then reevaluation may not
be necessary. Instead, ICC clearance for the cost change shall be secured.
c.
ICC
approved costings and other NEDA Board conditions on projects shall be
reflected in the NEDA Board resolution as the basis for loan negotiations, the
compliance of which shall be monitored and reported to the ICC by the head of
the negotiating panel.
d.
To
ensure that projects for NEDA Board approval are no longer subjected to a
parallel review of issues already resolved at the ICC level, a list of resolved
issues shall be drawn up for the certification by the ICC-CC Chairman.
3.
Schedule
of Meetings
a.
The
Cabinet Committee shall meet monthly while the Technical Board shall meet at
least twice a month for project review and every other month for sectoral
review.
b.
Special
meetings shall likewise be called, when deemed necessary, to accommodate
projects and other agenda items requiring immediate consideration/attention, or
when a quorum is not available during regular meetings. In case of the latter,
the agenda set for the canceled regular meeting shall be discussed during the
special meeting.
4.
Submission
Requirements
Submission of projects to
the ICC for evaluation/clearance shall include following:
a.
Feasibility
study
b.
Accomplished
ICC-PE Forms
c.
Endorsement
of the concerned Regional Development Council (RDC) for region-based projects
d.
Endorsement
from other concerned agencies
e.
Clearance
from DBM
f.
Endorsement
from the GCMCC with respect to the financial capacity of the concerned agencies
g.
Agency
Plan for Rights-of-Way (ROW) acquisition (when applicable)
h.
Location
map (when applicable)
i.
Environmental
Impact Statement (EIS)
j.
Environmental
Compliance Certificate (ECC) for projects that fall within the EIS system set
by the EMB.
1 Revised edition approved by the ICC Cabinet Committee on its 11 April 1991 meeting.
2 Executive Order No. 230 (Reorganizing the National Economic and Development Authority, 22 July 1987)
3 ICC Cabinet Committee Meeting on 11 April 1991
4 LOI No. 158, 21 January 1974
5 Details on private sector access to ODA are covered under separate implementing guideline.