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The procedure and
requirements in the release and repayment of loans of LGUs under
the ALRF are provided under Assessment Regulations No. 4-77 dated
23 May, 1977, as follows:
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Loans shall be payable
in equal annual installments for a period of from three (3)
to five (5) years depending upon the financial capacity of the
borrowing LGU (Section 2). Formerly, the repayment period was
five (5) years. However, it was changed to three (3) years to
conform to the term of office of local executives under the
Local Government Code of 1991;
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Section 3 thereof provides
for the scheme in the releases of loan which is 50% initial
release-30% second release-20% final release. Monitoring and
Evaluation of the project is required prior to processing of
second and final releases;
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Period for the repayment
of the loan shall be as stipulated in the loan agreement on
or before the end of December of each year starting with the
year next following the year of completion of the project (Section
4). However, we allow the LGU to pay the loan in equal quarterly
installments instead of annually, and
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In the approved Contract
of Loan, it is provided that in case of any default in payment,
the amortization due shall automatically be charged against
the Internal Revenue Allotment (IRA) of the defaulting LGU.
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