ROLE OF FINANCIAL INTERMEDIARY IN THE VOUCHER SYSTEM OF THE NCPP (PHILIPPINES) MR. CARLOS T. CASTRO Vice President, Land Bank of the Philippines 8 th Annual FA Workshop, Washington D.C.
OUTLINE A. Brief Background of the NCPP B. The Philippine Voucher System B.1 Features B.2 Process Flow B.3 Functions of the Financial Intermediary B.4 Status of the Philippine Voucher System
A. Brief Background of the NCPP Ozone Trust Fund Agreement signed on October 6, 1994 and amended to include NCPP requirements on March 26, 2003 DENR is lead implementing agency LBP is financial intermediary and coimplementing agency
Objective To enable the Philippines to completely phaseout its CFC consumption following the phaseout schedule stipulated by the Montreal Protocol and per the agreement set forth during the 38th EXCOM of the Multilateral Fund (MLF)
ODS Reduction Targets 50% reduction or 537.3 ODP MT of CFC 11 by 2005 in the following sectors: foam manufacturing refrigeration servicing air-conditioning servicing 85% reduction or 1,056.3 ODP MT of CFC 12 by 2007 in the refrigeration servicing sector
Investment and Non- Investment Components Type II Subprojects Investment projects to be carried out by small-sized beneficiaries, including service shops in the refrigeration and mobile airconditioning sectors Grant beneficiaries: service sector Disbursement via the Voucher System
B. The Philippine Voucher Voucher System System Financial mechanism to provide partial grant assistance (via vouchers) to service shops Objective To assist service shops in purchasing tools and equipment for the proper servicing/ maintenance/ installation of RAC and MAC systems
The Philippine Voucher System B.1 Features - Maximum grant value (still to be determined) - Service shop to put in at least 10% as equity participation - Pre-numbered with expiration date - Non-refundable and non-transferable - Form of contract between DENR and service shop - Basis for payment by the FI to accredited supplier
B.2 Simplified Process Flow Phase I. Accreditation of Suppliers EQUIPMENT SUPPLIER Submit application for accreditation DENR Technical Screening LBP Financial Screening Accredited Supplier
Simplified Process Flow Phase II. Issuance and Use of Voucher SERVICE SHOP DENR Service Shop Accredited Supplier Submit application for voucher Determination of eligibility Issue voucher for procurement of service tool kits Present vouchers to accredited supplier to purchase service tool kits Require 10% equity contribution Release equipment to service shop
Simplified Process Flow Phase III. Payment of Voucher Accredited Supplier Batch vouchers (minimum of 5) when presenting to LBP for payment LBP Validate vouchers Report to DENR observed disparity or inconsistencies Disburse payment to accredited supplier Report disbursements made against grant
B.2 Simplified Process Flow Phase I. Accreditation of Suppliers EQUIPMENT SUPPLIER Submit application for accreditation DENR Technical Screening LBP LBP LBP Financial Financial Financial Screening Screening Accredited Supplier
B.3 Functions of Financial Intermediary Financial Screening of Suppliers (Per Phase I: Accreditation of Suppliers) Review completeness of documents submitted by supplier Evaluate documents against certain financial criteria Conduct credit and background checking Provide DENR with results of the financial screening
Simplified Process Flow Phase III. Payment of Voucher Accredited Supplier Batch vouchers (minimum of 5) when presenting to LBP for payment LBP LBP Validate vouchers Validate vouchers Report to DENR Report to DENR observed disparity observed disparity or or inconsistencies inconsistencies Disburse payment to Disburse payment to accredited supplier accredited supplier Report Report disbursements disbursements made made against grant against grant
Functions of Financial Intermediary Disbursement of Payment (Per Phase III: Payment of Voucher) Review completeness of documents Ensure 10% equity participation of service shop is complied through supplier s submission of duplicate copy of official receipts issued to service shops Verify authenticity of voucher Pre-numbered vouchers Crosscheck voucher against list of vouchers issued by DENR to service shops Validate signatures of the DENR voucher signatories
Functions of Financial Intermediary Disbursement of Payment (cont..) Checklist of Requirements Approved original copy of voucher Accomplished Grant Disbursement Form Duplicate copy of official receipt indicating 10% equity of service shops DENR Certificate of Accreditation (one-time submission) Savings deposit passbook (one-time submission)
Functions of Financial Intermediary Reporting Provide the following reports on the voucher scheme to the WB and DENR Disbursement Report Status Report - monthly - quarterly Provide the following reports on the NCPP to WB and DENR: Progress Reports Audited Project Financial Statements Unaudited Project Financial Statements - annually - annually - annually Install system for tracking reports to be submitted and received at certain periods of time Maintain complete and updated records and make records available for review/ audit by WB and auditors
Functions of Financial Intermediary Funds Withdrawal and Replenishment Prepare Statement of Expenditure and Withdrawal Application when Special Account reaches 50% of its authorized allocation or within a month from date of last replenishment, whichever comes first
B.4 Status of VOUCHER SYSTEM System still being refined and finetuned. Screening criteria still to be set. Trainings of trainors ongoing Pilot test before implementation