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Duterte issues EO abolishing Municipal Development Fund Office

PRESIDENT Rodrigo R. Duterte has issued an executive order (EO) abolishing the Municipal Development Fund Office (MDFO), which provides technical assistance and credit finance or grants to local government units (LGUs) pursuing sustainable socio-economic development projects.

Executive Order 173, signed on June 10, dissolves the MDFO within 90 working days from the order’s effectivity. The EO designated the Secretary of Finance to implement the order and to oversee the disposition or transfer of the office’s functions, personnel and assets.

“There is a need to promote economy, efficiency and effectiveness in the delivery of public services across all executive departments and office,” Mr. Duterte said in the order, “including the rationalization of functions and activities carried out by the public sector.”

The MDFO made available funds to LGUs and was itself funded by foreign loans, development assistance, or grants.

All assets and liabilities of the office are to be transferred to the Department of Finance (DoF), including its remaining funds, except cash on hand and in bank accounts, which will instead be remitted to the National Treasury.

MDFO’s rights and obligations as administrator of official development assistance funding will also be transferred to the DoF.

The DoF has been instructed to absorb the office’s personnel without change in their rank, salaries and benefits. Workers who are not absorbed will receive corresponding separation and retirement benefits. — Alyssa Nicole O. Tan