SEC. 1. DECLARATION OF POLICY

1.1. General. These guidelines are pursuant to RA 8182, or the Official Development Assistance (ODA) Law, specifically, Section 4: Use of ODA Equitable Development which states that:

"The proceeds of ODA shall be used to achieve equitable growth and development in all provinces through priority development projects for the improvement of economic and social service facilities taking into account factors such as land area, population, scarcity of resources, low literacy rate, infant mortality and poverty incidence in the area: Provided, That rural infrastructure, countryside development and economic zones established under the PEZA law shall be given preference in the utilization of ODA funds. Towards this end, NEDA shall endeavor to obtain ODA funds from donor countries, which shall approximately be five percent (5%) of the total ODA loan from the immediately preceding year. Said funds shall be administered by NEDA for project identification, feasibility studies, master planning at local and regional levels and monitoring and evaluation: Provided further, That ODA shall not be availed of or utilized directly or indirectly for the following: (a) Telephone programs contracted as of 1 January 1996 except basic telephone programs and projects for rural areas not adequately serviced and/or currently developed by private enterprise shall be entitled to ODA loan availments; (b) Projects mandated primarily by law to be served by the private sector; and (c) Financing for private corporations with access to commercial credit."

"NEDA shall ensure that the ODA obtained shall be for previously identified national priority projects which are urgent or necessary. ODA shall not be accepted or utilized solely because of its availability, convenience or accessibility."

"Provided, finally, That the expressed approval of Congress be obtained by the Executive Department prior to the negotiation and implementation of projects funded from ODA on or after 1 January 1995 as well as those that have not been finalized."

1.2. Specific. A fund to be known as Project Development and Monitoring Fund (PDMF) is hereby established for the purpose of project identification, feasibility studies, master planning at local and regional levels, and monitoring and evaluation. It shall be administered by NEDA.

SEC. 2. SOURCE AND REPLENISHMENT OF PDMF

2.1. PDMF shall be comprised of grant assistance by ODA funding agencies intended for the purposes indicated in the ODA Law, and administered by NEDA.

2.2. PDMF resources shall be distinguished from other ODA resources, which are also grant assistance in nature and used for purposes similar to those of PDMF, but are the subject of separate agreements with ODA funding agencies, or not administered by NEDA.

2.3. The target amount of ODA funds mentioned in RA 8182, which is 5% of the total ODA loan of any immediately preceding year, shall not be taken to refer exclusively to PDMF, but rather to the totality of ODA grant resources for the purpose of project identification, feasibility studies, master planning at local and regional levels, and monitoring and evaluation, inclusive of PDMF.

2.4. NEDA shall endeavor to obtain and replenish PDMF during regular consultations with ODA funding agencies. PIS shall be responsible for including PDMF in the agenda for discussion with ODA funding agencies.

SEC 3. TARGET BENEFICIARIES

3.1. The ultimate beneficiaries of PDMF shall be fourth to sixth class LGUs, or clusters thereof, based on the most recent DOF classification. Special cases are subject to approval by the DDG-RDO. In the case of ARMM, the target beneficiaries shall be defined in a MOA between NEDA and RPDO-ARMM.

SEC. 4. ELIGIBLE ACTIVITIES

4.1. The activities eligible for PDMF Assistance are the following:

• Project identification in the form of master planning at local and regional levels;
• Project preparation in the form of feasibility studies and pre-feasibility studies;
• Project monitoring in the form of results monitoring on ongoing projects and impact studies of completed project;
• Training, capability-building and human resources development activities on project identification, preparation, and monitoring may be eligible for PDMF assistance only with prior approval of the DDG-RDO. Otherwise, for these activities other available funding facilities shall be explored.

4.2. Proposals for PDMF assistance may originate from any source, e.g., LGUs, members of Congress, the private sector, NGOs, or the NROs themselves. However, all activities eventually should be endorsed by an eligible LGU and/or the RDC. Final approval for implementation rests with the concerned NRO.

SEC. 5. ELIGIBLE PROJECTS

5.1. The DDG-RDO shall approve the list of sectors and type of projects as well as specific projects eligible for PDMF assistance.

5.2. Projects under the PDMF may be local, regional, inter-regional or national in nature. As such, the executing agencies for projects to be assisted under PDMF, if and when they are implemented, need not necessarily be the beneficiary LGUs but may also be regional/national government agencies.

5.3. Ongoing projects which do not fall under the list of eligible sectors and types of projects may be the subject of monitoring activities under PDMF provided these are endorsed by an eligible LGU, or the RDC, or the ICC of the NEDA Board.

SEC. 6. IMPLEMENTATION ARRANGEMENTS

6.1. Especially for the preparation of major projects, LGUs shall be encouraged to procure the necessary services of consultants. These consultants shall be selected in accordance with pertinent guidelines.

6.2. LGUs may adopt other implementation arrangements appropriate for the type of proposed activity/projects with the approval of the concerned NRO.

6.3. In all cases, NROs shall be responsible for the approval of the scope of work and the implementation arrangements and monitoring of the progress of activities to ensure that the objectives of the PDMF assistance are met.

6.4. If any activity is contracted out to a private entity, NROs shall not act or serve as a subcontractor.

6.5. In the case of ARMM, the implementing arrangements will be defined in a MOA between RPDO-ARMM and NEDA.

SEC. 7. INTERNAL NEDA PROCEDURES

7.1. In accordance with the annual budget calendar, PIS shall issue a report to the DDG-RDO on the amount of PDMF resources available for disbursement in the coming fiscal year. This is expected to trigger off a project identification process in the regions through the initiative of NROs/RPDO-ARMM. To aid in this task, PIS will also provide information on requirements of the ODA funding agencies relevant to PDMF.

7.2. RDCS, upon consultation with NROs/RPDO-ARMM and concerned NEDA-CO staff, shall submit at least once a year for approval of the DDG-RDO the list of sectors and types of projects eligible for PDMF assistance.

7.3. RDCS shall prepare an equitable allocation of PDMF resources among the NROs and RPDO-ARMM, based initially on the incidence of poverty in their respected regions, for approval of the DDG-RDO.

7.4. To encourage high fund utilization rates, the principle of overbooking shall be adopted, such that the total of the funds allocated to all NROs and RPDO-ARMM shall exceed the total available and allocable funds by an amount equivalent to the average allocation per region multiplied by a factor of 1.

7.5. ARMM shall be given its allocation, and the management and utilization of the funds shall be entrusted to RPDO-ARMM. A MOA between NEDA and RPDO-ARMM shall be undertaken for this purpose.

7.6. RDCS with the support of the Administrative Staff shall administer the release of PDMF resources of the NROs. The actual release of funds shall correspond to the work program agreed upon by any NRO and RDCS, as approved by the DDG-RDO.

7.7. NROS shall be the recipient and administrator of the regional PDMF resources, and as such shall be responsible for actual utilization.

7.8. RDCS shall regularly report, at least once every semester, to the Generals the status of utilization of PDMF resources.

SEC. 8. NEDA REGIONAL OFFICE GUIDELINES

8.1. Within three (3) months from the approval of these PDMF guidelines, NROs shall submit to the DDG-RDO for approval of their respective guidelines for the utilization of PDMF. The NRO guidelines shall be consistent with the ODA Law and the NEDA guidelines and shall contain, among others: (a) internal NRO procedures and requirements for utilization and disbursement of fund; (b) criteria to be considered in review and prioritization of proposals; and (c) role of PDACs/RMCs I PDMF.

8.2. RPDO-ARMM is likewise expected to adopt its internal guidelines based on a MOA with NEDA.

SEC. 9. ADMINISTRATION COSTS

9.1. Allocation for administration costs shall conform to existing guidelines. It shall not exceed 15% of the total amount of PDMF for any given year, and shall be approved by the DDG-RDO.