• Abad: Closing of ‘dormant’ accounts saves gov’t P438-M

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    The Aquino administration has generated savings worth P437.8 million by closing dormant and unnecessary bank accounts of national government agencies.

    Budget and Management Secretary Florencio “Butch” Abad on Wednesday said this bold move to shut down dormant bank accounts — 266 in total as of December 31, 2013 — was part of efforts to improve government cash management by installing a Treasury Single Account — a new system that enables the government to consolidate its cash resources on a daily basis.

    “Before, the government incurs debt in order to address perceived cash shortages — even if there’s cash lying around in the many bank accounts of government,” said Abad.

    The total cash hidden from inactive bank accounts was P437 million, he said.

    “Through the years, we’ve been borrowing cash even if we’re liquid anyways, just because such cash is hidden from the Treasury’s view as a result of our fragmented cash management system,” he noted.

    Once it is fully set in place, Abad said, the Treasury Single Account will provide the government with a full view of its cash resources on a daily basis, “and enable us to ‘sweep up’ dormant cash to fund upcoming payables.”

    “The P437.8 million that we recently saved is much smaller than the billions that we can further save from borrowings and money handling costs,” he said.

    The DBM chief further noted that the Treasury Single Account was among the key projects under the Philippine Public Financial Management Reform Roadmap, which seeks to enhance transparency, accountability, and efficiency in the management of public funds.

    “The Aquino administration is working hard to transform Philippine public financial management. Through game-changing reforms such as the Treasury Single Account, we’re making sure that government spends within its means, on the right priorities, and with measurable results,” he stressed.

    Dormant accounts refer to collections deposited in Authorized Government Depository Banks (AGDBs) but have remained inactive for more than five years.

    Previous reports by the Commission on Audit (CoA) have pointed out that dormant accounts form part of the huge cash balances being maintained by government agencies in AGDBs and other institutions.

    CoA will soon issue guidelines and procedures for the transfer of the P437.8 million worth of savings from all the dormant bank accounts to the government’s General Fund.

    DBM Undersecretary and Chief Information Officer Richard E. Moya explained that the Treasury Single Account requires a complete inventory of existing bank accounts of government agencies, along with the closure of dormant ones.

    At present, the Bureau of Treasury (BTr) is still completing the inventory of said bank accounts.

    “The Treasury Single Account is one of the core elements of the Government Integrated Financial Management Information System (GIFMIS), a government-wide ICT solution that will provide accurate and real-time information on government’s finances. This will span the whole financial management process — from budget preparation and programming, to fund release and accountability reporting,” said Moya.

    The Philippine Public Financial Management Reform Roadmap is steered by the DBM, Department of Finance (DoF), CoA, and BTr. Other major financial management reforms include the Unified Account Code Structure, the Comprehensive Human Resource Information System, and Performance-Informed Budgeting, among others. PNA

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    1 Comment

    1. Siony Camacho Bana on

      If Mr Abad under this administeation has been very efficient in developing “illegal DAP ” used it for the incentive pays to Congressmen and Senators for the impeachment of CJ Renato Corona , and again Mr Abad find another ways to close all dormant gov’t accounts and then what is he going to use the funds for, another savings for the administration to spend on what ????? OFW are not remitting as much , some of them lost their jobs abroad and they are coming home jobless, will this administration use the millions for creating jobs or this millions will be used to finance Mar Roxas candidacy and their allies?????