Under the program, LGUs have the option to monetize their respective shares in advance through a special purpose trust (SPT) from the unreleased IRA at a discounted value-net of interest and other charges from the trustee.
The IMP is an off-shoot of Malacañang EO 494 directing the Department of Finance, Department Budget and Management and the Department of Interior and Department of Interior and Local Government to take the necessary steps to ensure that the LGUs will get their respective shares from the P17.5-billion unprogrammed IRA in calendar year 2000 and 2001 on an installment basis for seven years, from 2007 to 2013.
The monetized program will be managed by the respective trust services of the two government financial institutions as co-trustees of a SPT.
DBP president and chief executive officer Reynaldo G. David said that the program offers the lowest rtransaction fees to LGUs, considering that this is a government-to-government transaction. The discount rate of the IRA certified will be auctioned off by the Bureau of Treasury (BTr) at market rates thus attaining competitive and transparent pricing, and maximizing the benefits due to LGUs and its constituents through higher net proceeds.
Distribution of documents for the IMP will be made through the DBP and the LBP branches and the LGU leagues starting March 6.