Section 20Sec./Art. 20

The National Endowment Fund for Culture and Arts.- A National Endowment Fund for Culture and Arts (the Fund) is hereby established exclusively for Philippine art and cultural programs, projects and activities all over the country.1шphi1

a. The contribution to the Fund shall be the following:

1. the amount of One hundred million pesos (P100,000,000.00) as seed capital shall be taken from the Philippine Amusement and Gaming Corporation (PAGCOR) fund at Five million pesos (P5,000, 000.00) per month for twenty (20) months; Provided, That no grant shall be awarded by the Commission except from the interest drawn from the funds: Provided, further, That no grant shall be awarded until after one (1) year from the organization of the Fund.

2. 2) ten percent (10%) of the travel tax collection, the share to be taken from the annual allotment of the travel tax given to the Philippine Tourism Authority.

b. Government corporations are hereby authorized to give grants to the Fund at their discretion, but not to exceed fifteen percent (15 %) of their unimpaired surplus;

c. The private portion of the Fund shall be raised from donations and other conveyances including funds, materials, property and services, by gratuitous title;

d. Contributions to the Fund shall be deductible for income tax purposes in accordance with the provisions of Section 29 (h) (2) (A) of the National Internal Revenue Code;

e. For the sound and judicious management of the Fund, the Commission shall appoint a reputable government-accredited investment institution as Fund Manager, subject to guidelines promulgated by the Commission;

f. The Commission shall be the administrator of the Fund, and as such, shall prepare implementing guidelines and decision-making mechanisms, subject to the following:

1. unless otherwise stipulated by the private donor, only earnings of private contributions shall be used;

2. no part of the seed capital of the Fund, including earnings, thereof, shall be used to underwrite overhead expenses for administration;

3. not more than twenty percent (20%)) of the Government's annual contribution to the Fund shall be devoted to Administrative functions of the Commission; at least ten percent (10%) shall be earmarked as part of the Fund's capital, and the balance shall be used for its programs and projects;

4. The Commission shall organize a separate staff, administratively independent of the secretariat, to be headed by a comptroller appointed by and directly responsible and accountable to the Commission;

5. There shall be an external auditor to perform an annual audit of its performance;

6. The Fund shall be exempt from pre-audit by the Commission on Audit.