SOP Exhibits

Title:

Rice Loan - MOA

SOP Number : GM-DN16

Exhibit 1

RICE LOAN MEMORANDUM OF AGREEMENT

This Agreement made and entered into this ____ day of ___________________, 19 ____ at Quezon City, Philippines, by and between:

The NATIONAL FOOD AUTHORITY (NFA), an agency of the government created pursuant to PD No. 4 as amended by PD No. 1485 and PD No. 1770 with principal place of business at __________________________________________, represented herein by its Provincial Manager, ______________________, hereinafter referred to as NFA.

AND

The PROVINCIAL/CITY/MUNICIPAL GOVERNMENT of _________________________, a local government unit with principal place of business at the Provincial/City/Municipal Hall located at ______________________________ represented herein by its Governor/City/Municipal Mayor, __________________________________ hereinafter referred to as LOCAL GOVERNMENT UNIT (LGU).

WITNESSETH

WHEREAS, NFA is the government agency charged with, among others, ensuring the nation with adequate supply and distribution of grains;

WHEREAS, under the Local Government Code, Local Government Units have been vested the authority to discharge the functions and responsibilities of national agencies and offices devolved to them;

WHEREAS, the Local Government Units are authorized to set aside five percent (5%) and twenty percent (20%) of their estimated revenue from regular sources as an annual lump sum appropriation for Calamity Fund and Special Development Fund, respectively;

WHEREAS, the Local Government Units have been tasked with providing basic social services at all times particularly in times of calamities;

WHEREAS, in order to provide basic social services to the populace, the LOCAL GOVERNMENT UNIT has requested NFA to allow them to purchase rice on credit for the following purposes: (1) for relief operations whenever a state of calamity is declared in their locality, and (2) for stockpiling in preparation of eventualities/emergencies that may occur at any given time;
WHEREAS, the NFA, cognizant of the needs of the people in times of emergency/calamity, has acceded to the request of the LOCAL GOVERNMENT UNIT for a rice loan;
NOW, THEREFORE, for and in consideration of the foregoing, the parties hereto hereby agree as follows:

I. OBLIGATIONS OF THE NFA:

1. The NFA Provincial Office shall sell rice on credit to the LGUs subject to the approval of the concerned Provincial Manager upon submission by the LGUs of the following documents:

a. A written request from the head of the LGU (Governor/City/Municipal Mayor) specifying the purpose of the rice loan (for relief operations or for stockpiling) indicating therein the quantity and quality of rice to be purchased;

b. A list of the LGU’s representatives authorized to withdraw stocks and sign documents pertaining t their rice loan with the NFA. The list shall be supported by the specimen signature/s and photograph/s of the representatives ;

c. An approved resolution of the Sangguniang Panlalawigan/Panglungsod/Bayan authorizing the LGU to purchase rice on credit from the NFA under the Rice Loan Program and specifying the fund source (i. e., Calamity Fund, Special Development Fund, Emergency Fund) appropriated for such obligation.

d. If the purpose of the loan is for relief operations, a copy of the Proclamation of State of Calamity covering their area as issued by the Office of the President or any other authorized body.

e. Requisition and Issue Voucher (RIV) duly signed by the Governor/City/Municipal Mayor.

f. Purchase Order (PO) duly signed by the Governor/City/Municipal Mayor.

g. Certification as to the available Special Development Fund/Calamity Fund/Emergency Fund or any other fund appropriated for the Rice Loan Program issued by the Provincial/City/Municipal Treasurer.

h. A list of the representative(s) of the LGUs authorized to conduct rice loan transactions with the NFA. The list must be supported with 2 copies of 2 x 2 picture and specimen signatures of the authorized representatives and may be amended through a letter duly signed by the Governor/City/Municipal Mayor.

2. The NFA designated warehouses shall issue rice only to authorized representatives of the LGUs and upon receipt of the Authority to Issue (AI) signed by the concerned Provincial Manager;

3. NFA shall use the AI and the Warehouse Stock Issue (WSI) to document rice issuances to the LGUs and shall retain the original copy of the WSI for billing purposes;

4. The NFA Provincial Office shall bill the LGUs for the rice loan granted to them based on actual stock issuances within five (5) working days reckoned from the date of the last withdrawal as indicated in the WSI.

I. OBLIGATIONS OF THE LOCAL GOVERNMENT UNIT

1. Whenever the LGU desires to purchase rice on credit from NFA whether for relief operations or for stockpiling for distribution during relief operations, the documents enumerated under Par. I Sec B. shall be submitted to the concerned NFA Provincial Office.

2. The concerned Sanggunian Panlalawigan/Panlungsod/Bayan shall approve/pass a resolution authorizing the LGU through its Governor/City/Municipal Mayor to purchase rice on credit from the NFA and appropriating a certain portion of their Calamity Fund, Special Development Fund, Emergency Fund or any other fund covering such obligation;

3. The LGUS undertakes to fully withdraw the authorized quantity of stocks within fifteen (15) working days reckoned from the date of receipt of the Authority to Issue (AI) from the NFA Provincial Office. The balance of stocks which remains unwithdrawn after the prescribed 15-day withdrawal period shall be deemed cancelled.

4. The LGUs undertakes to pay the NFA for the rice stocks issued including delivery fees , if any, within fifteen (15) working days from the date of receipt of the NFA billing. Unpaid bills after 15 days shall have an interest charge of one percent (1%) per month or a fraction thereof based on the value of rice granted on credit and the number of days consumed within the month up to a maximum of six (6) months. If the LGUs still fail to settle their bills after the six-month period, a penalty equivalent to two percent (2%) of the unpaid amount shall be imposed on top of the 1% interest charge until the loan has been fully paid.

III. SPECIAL PROVISIONS

1. The maximum quantity of rice loan that an LGU can avail of within a given fiscal year shall not exceed 5,000 bags for the Provincial Government, 2,000 bags for City Government, and 1,000 bags for Municipal Government, or the rice equivalent of their respective funds appropriated for the Rice Loan Program based on the Certification of the Provincial/City/Municipal Tresurer , whichever is lower. The price of rice shall be based on the NFA Consumers’ Price as indicated in the latest Selling Price Bulletin (SPB).

Rice loans intended for stockpiling shall not exceed ten percent (10%) of the maximum loanable quantity which is equivalent to 500 bags for Provincial government, 200 bags for City Government and 100 bags for Municipal Government, or the rice equivalent of the 10% of their respective appropriated fund, whichever is lower.

2. The price of rice shall be based on the NFA Consumers' Price as indicated in the latest Selling Price Bulletin (SPB).

2. The quantity and quality of rice to be sold under this Agreement shall be based on the formal request and the RIV/PO of the LGU. However, NFA reserves the right to allocate the quantity/quality of rice to be granted in the concerned area depending upon NFA’s stock inventory;

3. Rice purchased on credit under this Agreement shall not be used for any purpose other than as intended. NFA reserves the right to inspect the LGUs warehouse/s and/or distribution/relief operations centers to determine compliance with this Agreement;

4. The NFA shall not be under obligation to issue rice if the LGU has an outstanding account. In the event another disaster/calamity occurs, additional credit may be granted provided it shall not exceed the remaining available funds appropriated for the rice loan program after the outstanding loan has been deducted. The remaining available fund shall be certified by the Provincial/City/Municipal Treasurer.

5. The weight/quantity/quality of stocks as received and acknowledged by the LGU’s authorized representative/s on NFA official documents shall be final and binding and shall be the basis for billing and reconciliation;

6. NFA shall not issue subsequent Authority to Issue (AI) unless all stocks covered by previously issued AI has been fully served/withdrawn

IV. OTHER CONDITIONS:

1. Should NFA be constrained to resort to court action to enforce or safeguard its rights and interest under this Agreement, the LGU shall be liable to NFA for attorney's fees in an amount equivalent to twenty percent (20%) of total claims, exclusive of interest, damages, and expenses of litigation.

2. The terms and conditions of this Agreement may be changed, modified or additional stipulation may be added upon mutual agreement in writing by the parties. Any supplementary agreement shall form an integral part of this Agreement and shall describe and specifically refer to the particular provision of this Agreement which is being changed, modified or superseded.

3. It is clearly understood that failure of NFA to demand compliance with any of the terms and conditions of this Agreement or any act of liberality shall not be construed or considered as a waiver on the part of the NFA of the enforcement of this Agreement nor shall it relieve the LGU of its obligations provided hereunder

V. DURATION:

This Agreement shall be effective _______________________________ and shall be valid and binding for a period of one year. No extension or renewal of this Agreement shall be valid and binding without the written consent of both parties.

Either party, however, may terminate this Agreement without need of judicial action and without prejudice to any right to damages in the event that there is a breach of contract committed by the other by giving the other party a thirty (30) day prior written notice thereof, setting the reason or ground relied upon, particularly specifying the breach complained of. Upon such termination, the PROVINCIAL/CITY/MUNICIPAL GOVERNMENT shall settle its accountabilities with the NFA and any overdue and unpaid account shall be subject to a penalty as provided herein

VI. VENUE:

The parties agree that in case of litigation the venue of action for any cause or causes of action that may arise from this Agreement shall be exclusively laid in the proper courts of _____________________________only.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures on the date and at the place above-written.

NATIONAL FOOD AUTHORITY PROVINCIAL/CITY/MUNICIPAL
GOVERNMENT OF ________________

BY: BY:

_________________________ __________________________________
Provincial Manager Governor/City or Municipal Mayor

SIGNED IN THE PRESENCE OF:

_________________________ _________________________________

A C K N O W L E D G E M E N T

Republic of the Philippines)
__________________________) S.S

BEFORE ME, Notary Public for and in _____________________, this ________ day of ______________________, 1999 personally appeared:

Name CTC No. Date/Place Issued

________________ ____________ __________________
________________ ____________ __________________
________________ ____________ __________________

known to me to be the same persons who executed the foregoing instrument which is a Memorandum of Agreement and they acknowledged to me that the same is their own, free and voluntary act and deed as well as that of the institutions they represent.

The foregoing instrument consist of six (6) pages including this page on which this Acknowledgment is written, and each and every page of which has been signed by the aforesaid parties, their witnesses, and sealed with my notarial seal.

IN WITNESS THEREOF, I have hereto set my hand and seal on the date and place above written.

NOTARY PUBLIC

Doc. No. _____;
Page No. ______;
Book No. _____;
Series of 1999.