THE WORLD BANK IBRD * IDA I WORLD BANK GROUP MARA K. WARWICK Country Director, Philippines East Asia and Pacific OFFICIAL DOCUMENTS NW V, 2018 Secretary Carlos G. Dominguez Secretary, Department of Finance DOF Building, BSP Complex Roxas Boulevard, Manila Republic of the Philippines Re: IBRD Loan 8816-PH (Additional Financing for Philippine Rural Development Project) Disbursement and Financial Information Letter ("DFIL") Dear Secretary Dominguez: I refer to the Loan Agreement between the Republic of the Philippines (the "Borrower") and the International Bank for Reconstruction and Development (the "Bank") dated A44,!/ 4, 2018, for the above-referenced Project. The General Conditions, as defined in the Loan Agreement, provide that the Borrower may from time to time request withdrawals of Loan Amounts from the Loan Account in accordance with the Disbursement and Financial Information Letter, and such additional instructions as the Bank may specify from time to time by notice to the Borrower. The General Conditions also provide that the Disbursement and Financial Information Letter may specify Project specific financial reporting requirements. I. Disbursement Arrangements, Withdrawal of loan funds and Reporting of uses of Loan Funds The Disbursement Guidelines for Investment Project Financing, dated February 2017, ("Disbursement Guidelines") are available in the Bank's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.org. The Disbursement Guidelines are an integral part of the DFIL, and the manner in which the provisions in the Disbursement Guidelines apply to the Loan is specified below. (i) Disbursement Arrangements * Provisions (Schedule 1). The table in Schedule 1 sets out the disbursement methods which may be used by the Borrower, information on registration of authorized signatures, processing of withdrawal applications (including minimum value of applications and processing of advances), instructions on supporting documentation, and frequency of reporting on the Designated Account. (ii) Electronic Delivery. Refer to section 10.01 (c) of the General Conditions. The Bank may permit the Borrower to electronically deliver applications (with supporting documents) through the Bank's web-based portal (https://clientconnection.worldbank.org) "Client Connection". This option may be effected if the officials designated in writing by the Borrower who are authorized to sign and deliver Applications have registered as users of "Client Connection". The designated officials may deliver Applications electronically by completing the Form 2380, which is accessible through "Client Connection". By signing the Authorized Signatory Letter, the Borrower confirms that it is authorizing such persons to accept Secure Identification Credentials ("SIDC") and to deliver the Applications and supporting documents to the Bank by electronic means. The Borrower may continue to exercise the option of preparing and delivering Applications in paper form. The Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Borrower. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Borrower confirms through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation, available in the Bank's public website at https://worldbank.org and "Client Connection"; and (b) to cause such official to abide by those terms and conditions. II. Financial Reports and Audits (i) Financial Reports. The Borrower must prepare and furnish to the Bank not later than sixty (60) days after the end of each calendar quarter, interim unaudited financial reports ("IFR") for the Project covering the quarter. (ii) Audits. Each audit of the Financial Statements must cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period must be furnished to the Bank not later than six (6) months after the end of such period. III. Other Information For additional information on disbursement arrangements, please refer to the Loan Handbook available on the Bank's website (http://www.worldbank.org/) and "Client Connection". The Bank recommends that you register as a user of "Client Connection". From this website, you will be able to prepare and deliver Applications, monitor the near real-time status of the Loan, and retrieve related policy, financial, and procurement information. For more information about the website and registration arrangements, please contact the Bank by email at clientconnectionAworldbank.or . If you have any queries in relation to the above, please contact Carmenchu Austriaco at caustriaco@worldbanko.org with copy to Caroline Cheng, Finance Analyst at ccheng2Aworldbank.org using the above reference. Yours sincerely, Mara K. Warwick Country Director, Philippines East Asia and Pacific Region Attachments 1. Form of Authorized Signatory Letter 2. Interim Unaudited Financial Report 3. Form of List of Payments for Contracts Subject to Prior Review With copies: Philippine Rural Development Project Department of Agriculture Elliptical Road, Diliman Quezon City prdpnpco@gmail.com Schedule 1 : Disbursement Provisions Basic information Country Republic of the Philippines Closing Date Section IV.B.3. of Schedule 2 to Loan - Borrower/Beneficiary Republic of the Philippines the Loan Agreement. Number Name of the Project Additional Financing for the Philippine Disbursement Four months after the closing Rural Development Project Deadline Date date. Subsection 3.7 Disbursement Methods, and Supporting Documentation Disbursement Methods Methods Supporting Documentation Section 2 Subsections 4.3 and 4.4 (**) Direct Payment Yes Copy of records e.g. copies of receipts, supplier invoices Reimbursement Yes Interim Unaudited Financial Report in the form attached (Attachment 2) List of payments against contracts that are subject to the Bank's prior review, in the form attached (Attachment 3) Designated Account Yes Interim Unaudited Financial Report in the form attached (Attachment 2) and copy of bank statement List of payments against contracts that are subject to the Bank's prior review, in the form attached (Attachment 3) Special Commitment Yes Copy of Letter of Commitment Designated Account (Sections 5 and 6 ** 5 Segregated Designated Accounts: Each DA managed by: i) National Project Coordination Office Variable Type ii) Luzon A Project Support Office Ceiling iii) Luzon B Project Support Office iv) Visayas Project Support Office v) Mindanao Project Support Office Financial Institution - Name Land Bank of the Philippines Currency USD Frequency of Reporting Quarterly Forecast for two (2) quarters as provided in Subsection 6.3 (**) the quarterly Interim Financial Report Minimum Value of Applications (subsection,3.5) The minimum value of applications for Reimbursement, Special Commitment and Direct Payment is USD 1,000,000 equivalent Address for Paper Communication Authorized Signatures (Subsection 3.1 and 3.2 **) The form for Authorized Signatories Letter is provided in Attachment 1 of this letter Withdrawal and Documentation Applications (Subsection 3.3 and 3.4 For Authorized Signatories Letter: For Withdrawal Applications: The World Bank, 26/F One Global Place 5th corner 25th Street, Bonifacio The World Bank, 26/F One Global Place 5th corner 25th Street, Bonifacio Global City Taguig, Philippines Global City Taguig, Philippines Attention: Mara K. Warwick, Country Director Attention: Loan Department ** Sections and subsections relate to the "Disbursement Guidelines for Investment Project Financing, dated February 2017" Attachment 1 - Form of Authorized Signatory Letter [Letterhead] Department of Finance [Street address] [City] [Country] [DATE] The World Bank 26th Floor, One Global Place 5th Avenue Corner 25th Street Bonifacio Global City Taguig City, Philippines 1634 Attention: Mara Warwick, Country Director Re: IBRD Loan No. - Authorized Signatory Letter (Additional Financing for the Philippine Rural Development Project) I refer to the Loan Agreement ("Agreement") between the International Bank for Reconstruction and Development (the "Bank") and the Republic of the Philippines (the "Borrower"), dated , providing the above IBRD Loan. For the purposes of Section 2.02 of the General Conditions as defined in the Agreement, any [one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Borrower to sign applications for withdrawal under this Loan. For the purpose of delivering Applications to the Bank, including by electronic means, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Borrower, acting 3[individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Bank. This Authorization replaces and supersedes any Authorization currently in the Bank records with respect to this Agreement. ' Instruction to the Borrower: Stipulate if more than one person needs to sign Applications, and how many or which positions, and if any thresholds apply. Please delete this footnote in final letter that is sent to the Bank. 2 Instruction to the Borrower: Stipulate if more than one person needs to jointly sign Applications, if so, please indicate the actual number. Please delete this footnote in final letter that is sent to the Bank. Instruction to the Borrower: Use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Bank. 4 Instruction to the Borrower: Use this bracket only if several individuals must jointly sign each Application; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Bank. [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: Yours truly, / signed / [Position] Attachment 2 - Interim Unaudited Financial Report Deparnment ofAgriculture Rural Devetopment PrRject - LN XXXX - AF Interim Financial Reports for the quarter ended am-dAi-yy STATEMENT OF SOURCIS AND USES OF FUNDS For the Quarter (USS) Year to Date (USS) Inception to Date (USS) WorldBank GOP-DA Total WorldBank GOP-DA Total WorldBank GOP-DA Total SOURCES OF FLNDS Receipts XX xX xxx xxx x xM Nx M T o ta l R e c e ip ts X X X x x X XX x x x x_xx x x_ _ _n _ x x x x USES OF FUNDS Co o i : Local and N ~æ na LeWd Pkr~ng x x m X u m x m xm C4m~ponent 2 : ikatrek~ Dewkrnent~ xx x X XXimi X x Con~onent 3 En erp se D ew k pr en~ x x n X XX x xxx xM Conanent 4 -Pct ~nenanS &or x x XX XX XX m m m xM Total Expenditures xx xx xx xxx rn xxx xxn xx xx SURPLUS /(DEFICIT) x x x xx xx xX xxx xxx xxx OPENING BALANCE US Doflar Account x x x x xx Peso Account x x x x x x Total x x x x x CLOSING BALANCE US Doflar Account x x n x x x x n PesoxAccount x x n x x XX x x XX Total I xx xx xx xx xx xx xx RECAP BY CATEGORIES Category I Category 2 Category 3 Total xn xn xxx Department of Agriculture Rural Derelpment Project - LN XXXX - AF Interim Financial Reports for the quarter ended mm-dd-yyyy STATEMENT OF SOURCES AND USES OF FUNDS For the Quarter (PhP) Year to Date (PhP) Inception to Date (PhP) WorldBank GOP-DA Total WorldBank GOP-DA Total WorldBank GOP-DA Total SOURCIS OF FUNDS Receipts nx n m m m x xm xx Total Receipts xX s xx xxx M xxxx xxxx xxxx xm USES OF FUNDS Conet I : Locaarid Na~a Leed P~rng x m XX XX xm m xxxx Com 2. åastr~ Deve n x x XX XX XX m xm m xu C 3 Enterp~se Deekpment x x X XX XX x x% xm Comonent 4 - Pect rmØmeta6nSprt x x x XX XX xxx m m mx Total Expenditures xx xx xx m m m SURPLUS I (DEFICIT) x x x xx xx X X m xxx OPENLNG BALANCE US Dollar Account x x x x PesoAccount x x x x x i Total x x x x x x CLOSING BALANCE US Dollar Account x x n x x . x Peso Account x x n x x nX x x Total XX xx xx xx xx XX XX XX xx REC.AP BY CATEGORIES Category I xU Category 2 NU Category 3 Total xxx x Department ef Agriculture Rural Development Project - LN XXXX - AF Interim Financial Reports for the quarter ended mm-dd-y.y VARIANCE ANALYSIS OF USE OF FUNDS - CONSOLIDATfED FROM ALL SOURCES Quarter Cumulative for the Ycar Cumulatie - Inception to Date Ik~Anm va c Pk~e A fI Varianced .~ l u Planed ctul |arince Planed Actal arince Planned Actual Variance Component 1: Local and National Level Panning 1. 1 Enhancing AFMP Process x x x xx xx xx xxx xxx xxx 1.2 SupportingAFMP Irptementaton x x x XX xx xx xxx xxx xxx XX XX X xx xx xx xxx xxx xxx Coponent 2: Infras~ructue Development 2.1 Vabe Chæng Inrastncture Spport xx xx x xx xx x xx xx x 2.2 Approachedfrmprovingnfranvesrnents xx xx x xx xx x xx xx x Component 3 : Enterprise Development 3 RurAghery Enerpnse and praokiMy enhancement xx XX x XX xx x xx xx x 32 Technobgy and Inbrmalin for Ent M~et Devt xx XX x XX XX x XX xx x Component 4: Project Imp dmentation Suppo t xx xx xx xx xx xx xX XX XX Note: Reasons for variance in excess of 10% should be explained as notes Department of Agriculture Rural Development Prøject - LN XXXX - AF Interim Financial Reports for the quarter ended mm-dd-yyyy VARIANCE ANALYSIS OF USE OF FUNDS - CONSOLIDATED FROM ALL SOURCES Q er Cumulative for the Year Cumulative - Inception to Date Planned Actual Variance Planned Actual Variance Planned Actual Variance Component 1: Locat and National Leve Planning 1.1 Enhancing AFMP Process x x x xx xx xx xxx xxx xxx 1.2 Supporng AFMP fnperentabaon x x x xx xx xx xxx xxx xxx xx xx xx xx xx xx xxx xxx xxx Component 2: Infrastructure Deve~opment 2.1 Vabe Cha Infrastructure Supp xx xx x xx xx x xx xx x 2.2 Approached rlmprowng Infra investments xx xx x xx xx x xx xx x Component 3: Enterprise Development 3.1 RurArhery Eierprse and pro~áMy enhancemer xx xx x xx xx x Xx xX x 32 Techno~gy and inffrmafin for En! Marke Dev xx xx x xx xx x xx xx x Component 4: Project ImpLmentation Support xx xx xx xx xx xx xx xx xx Note: Reasons for variance in excess of 10% shouid be explaed as notes Department of Agriculture Rural Development Project - LN XXXX - AF Interim Financial Reports for the quarter ended mm-dd-yyyy CASH FOR!ECAST FOR THE 6 MONTHS ENDLNG NI-DD-YYYY - Cash Requirements Quarter Quarter Cash Requirements for ended mmm- ended mmm- Next Six Months dd-y dd-yyyy PhP PhP PhP USD Component I: Local and National Levet P~aning I X xx Consutng Serv~ces i l n n Training XX n xx Sub~tot xx XI n Coponent 2: InfrastrMture Development Tratnings m m XIX XIX Consng Services m m M m Sub-prects m m Sub-tota nx m xxx Co~ponent 3: Enterprise Deveopment Tranings xxx xxx m m Consuting ServWes m m xxx SproJects X xx xxx xxx Sultota m m Component4 :Pojectknpementation SuppoL Goods XI X n Consuing Services XI X xx Training xx xx X X Operafng Costs xx XX xx XX Su a x' XX IX XX XX XX XI Department of Agrickultare Rural Development Project - LN XXXX - AF Interim Financial Reports for the quarter ended mmm-dd-yyyy DESIGNATED ACCOUNT ACTIITY STATEMENT Note USS USS 1 Cumulative Advances to the end of current quarter x 2. Cumulative Expenditure to the end of last quarter x 3. Outstanding Advances to be accounted for (Line 1 minus Line 2) x 4. DA balance at beginning of quarter x 5. Add.Subtract: Cumulative Adjustments (if any) x 6- Advances from Loan proceeds during the quarter x 7. Sub total of Advances and Adjustments x 8- Outstanding Advances to be accounted for (Line 4 plus Line 7) x 9. DA balance at end of quarter x 10 Add Subtract: Cumulative Adjustments (if any) x 11. Expenditure for current reporting period x 12 Sub total of Adjustments and Expenditure x 13. Advances accounted for (Add Line 9 and Line 12) x 14. Difference if any (Line 8 minus Line 13) x 15. Total forecasted amount to be paid by 1WVB x 16. Less: Closing DA balance x IT Forecasted Direct Payments x 18. Sub total of closing DA balance and forecasted payments (Line 16 plus Line 17) x 19. Cash to be disbursed for the next reporting period (Line 15 minus Line 18) x Note: Bank reconciliation statement and copy of the bank statement for the period should be attached Attachment 3 Payments Made during Reporting Period Against Contracts Subject to the Bank's Prior Review Amount Paid to WB WB Supplier Share of Contract Contract Contract Control during Eligible Amount Number Supplier Date Amount Number Period % Paid