MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Memorandum of Agreement made and entered into by and between:

The DEPARTMENT OF AGRICULTURE, a national government agency with office

address at Elliptical Road, Diliman, Quezon City, herein represented by its Secretary
EMMANUEL F. PIOL, hereinafter referred to as the DA;

- And -

The PROVINCIAL LOCAL GOVERNMENT UNIT OF MOUNTAIN PROVINCE, a

local government in Cordillera Administrative Region duly organized and existing under
and by virtue of the laws of the Republic of the Philippines with office address at
Poblacion, Bontoc, Mountain Province represented by its Governor, BONIFACIO C.
LACWASAN, JR., herein referred to as PLGU MOUNTAIN PROVINCE;

- Witnesseth -

WHEREAS, the DA is the principal government agency mandated to develop the

countrys agriculture and fishery sector through the provision of support programs and
training services to farmers/producers group to attain food self-sufficiency through
efficient and competitive production costs for global competitiveness;

WHEREAS, the DA is mandated to partner with the LGU in implementing

development programs to attain food self-sufficiency by transforming the country from
a food importer to an exporter;

WHEREAS, one of the priority programs of the DA under the High Value Crops
Development Program (DA-HVCDP) is the production of quality coffee in the country
towards cost competitiveness and increased volume of production as part of the Crop
Enhancement/Expansion Program;

WHEREAS, Section 17 of the Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, provides that municipalities shall deliver extension and on site
research services and facilities related to agriculture and fishery activities which include
dispersal of livestock and poultry, fingerlings and other seedling materials for
aquaculture; palay, corn and vegetable seed farm; medicinal plant gardens; fruit trees,
coconut, and other kinds of seedlings nurseries; demonstration farms; quality control of
copra and improvement and development of local distribution channels, preferably
through cooperatives; inter-barangay irrigation system; water and soil resource
utilization and conservation of mangroves;

WHEREAS, the PLGU MOUNTAIN PROVINCE is recognized by the DA as a

partner in spearheading development efforts and activities of DA programs and projects.

WHEREAS, the PLGU MOUNTAIN PROVINCE has projects for the welfare of the
coffee farmers and foremost for the development of coffee industry;

WHEREAS, the PLGU MOUNTAIN PROVINCE initiated the production of Coffee

in the Province of Mountain Province as part of the support for increasing the volume of
production of the said commodity;

WHEREAS, the DA and the PLGU MOUNTAIN PROVINCE have common and
complementary objectives, and have signified their intention, willingness and

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cooperation in achieving greater production of high quality coffee by farmers and at the
same time achieving financial viability for the farmers themselves;

WHEREAS, the PLGU MOUNTAIN PROVINCE, through Sangguniang

Panlalawigan Resolution No. 2017-211, dated May 9, 2017, authorizes the Provincial
Governor to enter into a Memorandum of Agreement with the DA for the production of
quality coffee towards cost competitiveness, and increased volume of production as part
of the Crop Enhancement /Expansion Program, copy of which is attached as Annex A;

WHEREAS, the PLGU MOUNTAIN PROVINCE has post-audited and accounted for
in books all previously transferred funds by the DA as certified by the Accountant, copy
of the said post-audit and accounting reports are attached hereto and made an integral
part hereof as Annex B.

NOW, THEREFORE, for and in consideration of the foregoing premises and their
mutual covenant hereinafter set forth, the parties hereby agree on the following
provisions:

Article 1.0
The Project

This Memorandum of Agreement (Agreement) refers to and covers the Project

entitled: Coffee Rehabilitation and Expansion in Mountain Province.

Article 2.0
Obligations of the DA

The DA shall:

2.1 For purposes of implementation of the Project, deposit to PLGU MOUNTAIN

PROVINCE with Account No. 1042-1094-32 at Landbank of the Philippines
(LBP)-Bontoc Branch the amount of FIVE MILLION PESOS ONLY (Php
5,000,000.00) as per the conditions set forth in the Commission on Audit (COA)
Circular No. 2012-001, series of 2012;

2.2 Through the Office of the Undersecretary for High Value Crops and Rural
Credit/High Value Crops Development Program National Program Management
Office , review the documents and evaluate the feasibility of the proposed project;

2.3 Ensure that the PLGU MOUNTAIN PROVINCE has no unliquidated cash
advance/fund transfers from the DA. For this purpose, a Certification by the
Accountant from DA OSEC must be issued indicating that funds previously
transferred to the Implementing Agency has been liquidated and
accounted for in the books pursuant to COA Circular No. 2016-002, dated
May 31, 2016;

2.4 Through the DA-HVCDP Program Management Office, audit the documents
involving the transfer of funds to the PLGU MT. PROVINCE pursuant to this
Agreement, within a period of thirty (30) days from the date of receipt of the
fund. Failure to liquidate previous fund transfer precludes the DA to further
release the additional funds;

2.5 Provide, through the DA-HVCDP Regional Field Office-Cordillera

Administrative Region(RFO-CAR), necessary technical support and assistance
to PLGU MOUNTAIN PROVINCE and to the program beneficiaries to ensure
that the programs and objectives are met;
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 2.6 Implement the approved project proposal (with list of approved
beneficiaries/recipients)with the approved schedule and budget in accordance
with the Work and Financial Plan, copies of the approved project proposal and
of the work and Financial Plan are attached hereto and made integral parts
hereof as Annexes C and D, respectively;

2.7 Regularly make coordination and consultation with PLGU MOUNTAIN

PROVINCE regarding the implementation of the project;

2.8 Monitor the status of the project, through the HVCDP Regional Project
Coordinating Office, to validate the progress of the project, the proper utilization
of funds, and the top level and effective coordination with the DA-HVCDP RFO-
CAR in connection with the implementation of the project.

For this purpose, the HVCDP Regional Project Coordinating Office shall submit a
quarterly report on the status of the implementation of the project to the Office
of the Secretary through the Office of the Undersecretary for High Value Crops &
Rural Credit;

2.9 Demand a Terminal Report from the PLGU MOUNTAIN PROVINCE reflecting
the actual amount transferred and received by the PLGU MOUNTAIN
PROVINCE. The liquidation documents should be audited in accordance with
the existing accounting rules and regulations as well as other relevant COA rules
and regulations;

2.10 Demand the submission by the PLGU MOUNTAIN PROVINCE of Fund

Disbursement Report duly audited by the resident auditor and report of physical
accomplishment of the project;

2.11 Issue a certificate of Completion within thirty (30) days upon project
completion;

2.12 Demand from the PLGU MOUNTAIN PROVINCE the return/refund of the full
amount released should any of the following cases occur under Section 3.11 of
this Agreement;

2.13 Issue an Official Receipt (OR) for the unexpanded balance and the refunded
disallowance remitted by the PLGU MOUNTAIN PROVINCE, if any;

2.14 Institute legal action against PLGU MOUNTAIN PROVINCE for failure to
complete the project in accordance with this Agreement and/or for failure to
liquidate within one (1) year from the time that the liquidation of the fund
releases becomes due. The failure of the proponent to liquidate the funds in
accordance with this Agreement shall create the presumption that the funds
have been misappropriated.

Article 3.0
Obligations of PLGU MOUNTAIN PROVINCE

PLGU MOUNTAIN PROVINCE shall:

3.1 Submit approved project proposal including list of approved

beneficiaries/recipients and Work and Financial Plan referred to in 2.6 above;

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3.2 Issue an Official Receipt (OR) in the name of DA corresponding to the amount
transferred and received;
3.3 Provide an equity of not less than twenty percent (20%) of the total project cost
either in the form of land, labor, equipment, machineries, trainings and the like
to be used in the project. For this purpose, the LGU shall submit to the DA the
proof of equity prior to the signing of this Agreement;

Maintain a separate savings/current account for the fund received and keep a
separate subsidiary records for the trust liability.

3.4 Prepare guidelines to ensure successful implementation of the said project;

3.5 Implement the Project in accordance with the approved project proposal
contained in AnnexC; and conduct evaluation to ascertain the
progress/accomplishment of the project and submit the required periodic
financial and physical status of the project to the DA ,which in no case be less
than every quarter of the year;

3.6 Allow and assist visitorial audit by the COA Resident Auditor authorized
officials/representative to perform the audit under approved office order;

3.7 Prepare and submit periodic and regular monitoring, audit and evaluation
reports and other reports as required by the DA or Commission on Audit (COA)
from time to time. Such reports shall be prepared and submitted to the DA not
later than the end of the quarter of the year;

3.8 Prepare the Record of Checks Issued and the Record of Disbursement and with
all supporting vouchers/payrolls and documents through its Accountable Officer
and submit these records within five (5) days after the end of each month to the
Accountant.

3.9 Record all transactions which are related to the utilization of the funds and keep
the books of accounts open for inspection by the DA or its duly authorized
representative and make available all records and files;

3.10 Within (30) days after the project completion, submit the fund utilization report
(terminal report) certified by its accountant and approved by the head to the DA
together with the inspection report and certificate of project completion
rendered/issued by the DA or its authorized representative,
acceptance/acknowledgment of beneficiaries/recipients of the
project/funds/goods/services received. The validity of these documents shall be
the basis of the DA in recording the fund utilization in its books of accounts.
These documents shall support the liquidation of funds granted to PLGU
MOUNTAIN PROVINCE;

3.11 Return/Refund to the DA the full amount released due to the following:

a) misappropriation of funds without prejudice to the filing of administrative

and/or criminal charges as the circumstance may warrant;

b) non-compliance with any provision stated in this Agreement; or

c) commission of any act inconsistent with or contrary to the spirit and avowed
intent of the project;

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3.12 Return/Refund to the DA, portion of the fund unused after the completion of the
project and any disallowed amount after the financial audit pursuant to Section
4.9, COA Circular No. 94-013 dated Dec. 13, 1994;

Article 4.0
Other Terms and Conditions

4.1 Execution of Agreement; Counterparts.

This Agreement may be executed in several counterparts, each of which shall be

deemed an original and all of which shall constitute one and the same
instrument, and shall become effective when counterparts have been signed by
each of the Parties and delivered to the other Parties;

4.2 Supplemental Agreement

Supplemental agreements may be signed by the parties in order to fully

undertake and fulfill the provisions of this Agreement.

4.3 Modification

Modifications or amendments to this Agreement shall be made in writing to be

valid and binding subject to all applicable and appropriate government laws,
rules and regulations.

4.4 Effectivity

This Memorandum of Agreement shall take effect upon its signing and shall be in
force within a period of one (1) year from the date of release of the fund,unless
otherwise expressly extended in writing.

In the event that the PLGU MOUNTAIN PROVINCE determines the necessity to
extend the term of this Agreement, it shall request in writing, at least three (3)
months prior to the expiration of the term, the extension of this Agreement.

4.5 Termination

The DA may terminate this Agreement, upon the occurrence of any of the events
stated in section 3.11 above and for such other acts constituting violation of
existing law, rules and regulations. In such case, in addition to the obligation of
the PLGU MOUNTAIN PROVINCE to return/refund the full or unused funds
transferred to it, the PLGU shall comply with its obligation under other
applicable government accounting and auditing rules and regulations.

In addition to the foregoing, the DA may terminate this Agreement in case of

unavailability of the funds for whatever reasons.

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 4.6 Survival

Any provision of this Agreement that contemplates performance or observance

subsequent to termination or expiration of this Agreement shall survive
termination or expiration of this Agreement and continue in full force and effect.

4.7 Settlement of Differences

In the event of any issue or dispute arising out of or in connection with this
Agreement, the parties shall, in all cases, endeavor to settle the issue or dispute
amicably. Nothing herein contained, however, shall prevent the parties from
submitting any issue of dispute to preventive mediation or arbitration, as the
case may be. In case of failure to reach an amicable settlement between parties,
as herein provided, either of the parties may resort to appropriate judicial
action/s which shall be brought only to the proper courts of Metro Manila and
Bontoc, Mountain Province to the exclusion of other venues.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures this
____th day of _________, 2017 at ____________, Philippines.

DEPARTMENT OF AGRICULTURE PROVINCIAL LGU OF MT. PROVINCE

By: By:

EMMANUEL F. PINOL BONIFACIO C. LACWASAN, JR.

Secretary Governor

Signed in the Presence of:

EVELYN G. LAVIA JOHN K. LIKIGAN

Undersecretary Provincial Agriculturist
High Value Crops & Rural Credit

LORENZO M CARANGUIAN
DA-RFO CAR, OIC Regional Director

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Republic of the Philippines)
City of _________________________) S. S.

ACKNOWLEDGMENT

Before me, this _____ day of __________, 2017, personally appeared:

EMMANUEL F. PIOL CTC No. Date / Place Issued

29022423 April 4, 2017 / Kidapawan City

Identification No. Date Issued

916-507-911 (BIR) October 11, 1999

-in his capacity as Secretary of the Department of Agriculture

BONIFACIO C. LACWASAN, JR. CTC No. Date / Place Issued

04533026 January 16, 2017/ Bauko,MP

Identification No. Date Issued

905-476-434(BIR) Novemver 17, 1999

-in his capacity as Governor of LGU- Mt. Province

-known to me and to me known to be the same persons who executed the foregoing
instrument and who acknowledged to me that the same are their free and voluntary act
and of the government units they represent.

This Memorandum of Agreement, consisting of seven (7) pages including the page on
which this acknowledgment is written, has been signed by the parties and their
instrumental witnesses on each and every page thereof.

IN WITNESS WHEREOF, I have hereunto set my hand and seal on the same date
and place first above written.

Doc. No. ____;

Page No. ____;
Book No. ____; _______________________________
Series of 2017. Notary Public