REVENUE MEMORANDUM CIRCULAR NO. 25-2014 issued on April 14, 2014 publishes the full text of Circular Letter No. 2013-16 issued by the Secretary of the Department of Budget and Management entitled “Implementation of the Expanded Modified Direct Payment Scheme (ExMDPS) For Accounts Payable Due Creditors/Payees of All National Government Agencies (NGAs)”.

         The circular covers all NGAs/Operating Units (OUs) relative to the payment of their due and demandable A/Ps, including pension benefits but excluding payment for Terminal Leave and Retirement Gratuity (TL/RG) benefits.

         Only valid and legal Accounts Payable (A/Ps) for which goods/services/projects have been delivered/rendered/completed and accepted shall be considered for payment.

  Obligations for which goods/services/projects have not yet been delivered/rendered/ completed by the creditor and accepted by the NGA/OU shall not be recorded as A/Ps at the end of the year. These obligations shall only be recognized as A/Ps on the date of delivery/rendition/completion and acceptance of the goods/services/projects, regardless of the year of incurrence of such obligations.

              Starting January 1, 2014, A/Ps due creditors/payees of all NGAs/OUs shall be settled thru the ExMDPS chargeable against the Notice of Cash Allocations (NCAs) credited under the regular Modified Disbursement System (MDS) sub-account (Common Fund) of the NGA.

        Pursuant to Circular Letter No. 2013-12 (dated November 21, 2013), the NCAs for crediting to NGAs/OUs’ regular MDS sub-accounts for any month of a given quarter shall be valid until the last working day of the 3rd month of that quarter.

         All NGAs/OUs shall use the List of Due and Demandable Accounts Payable-Advice to Debit Account (LDDAP-ADA), which shall be considered an accountable form, in processing payment of A/Ps under the ExMDPS. The printing, use and reporting of the same shall be pursuant to the Commission on Audit’s existing rules and regulations governing accountable forms.

          To facilitate the use of the ExMDPS, all NGAs/OUs shall encourage or advise their creditors/payees to open a Current or Savings Account (CA/SA) with any branch of their authorized Modified Disbursement System-Government Servicing Bank (MDS-GSB).For creditors/ payees, where opening of a CA/SA with MDS-GSBs is not feasible or difficult due to company policy, they shall be advised to open an account with any of the banks included in the List of Participating Banks in the Electronic Peso Clearing System.

           For creditors/payees without existing accounts with the NGA/OU’s MDS-GSB (i.e., with accounts in other GSBs or private banks), the payment of their claims shall be through bank transfer. Payment thru issuance of a Manager’s Check by the MDS-GSB of the NGA/OU shall be discontinued to minimize cases of late payments.

          All payments for A/Ps due creditors/payees reflected in the LDDAP-ADA are assumed duly programmed in the agency-submitted Monthly Disbursement Program, as evaluated by DBM pursuant to NBC No. 550.

   DBM shall release NCAs directly to OUs of agencies, including those cash requirements corresponding to the transferred allotments representing the OUs’ share or allocation from lump-sum funds and centrally-managed items within the agency specific budgets fleshed out during budget execution. The issuance of Notice of Transfer of Allocation shall be discouraged.

          Validation of the MDS sub-accounts of all NGAs/OUs shall be undertaken by the DBM and Bureau of Treasury, together with the MDS-GSB, in support of prospective implementation of the Treasury Single Account.

         For the payment of TL/RG benefits, NCAs corresponding to the pertinent Special Allotment Release Order issued shall continue to be credited to the NGA/OU’s special MDS sub-account being maintained solely for the purpose. All other existing provisions under DBM Budget Circular No. 2013-1 shall remain in force.