• DOF may revoke rule on govt deposit transfer

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    The Department of Finance (DOF) may revoke a circular issued by the former administration ordering government agencies, state-owned and -controlled corporations, and local governments to deposit funds only in qualified government financial institutions (GFIs).

    If or when the circular is revoked, the government may then set up a single bank account for the national government for better cash management.

    “We have to change that regulation,” Finance Secretary Carlos Dominguez 3rd told reporters late last week, referring to Finance’s Department Circular 001-2015 issued on June 1, 2015 by then Finance Secretary Cesar Purisima, which stated that: “For agencies specifically allowed by law, rules, and regulations to retain income and/or for operations and/or working balances, the deposit of government funds by national government agencies (GOCCs) is limited only to government financial institutions with a universal bank license and a Camels rating of at least 3.”

    The DOF had extended its deadline until June 30, 2017 to give the national government agencies (NGAs), state-owned and -controlled corporations, and local governments more time to transfer their bank deposits to GFIs.

    The DOF secretary said the extension was granted “in view of the numerous requests received by the Department, and to minimize operational impact among NGAs, GOCCs, and LGUs.”

    “We postponed it earlier just because we did not understand it, but I think we will just take it out because that is unreasonable,” Dominguez explained.

    “We just posponed it for one year, but I think we have to take it out already. Is it a really an important deal? I don’t think so. I think we will just remove that,” he said.

    Considering the situation in some municipalities that have not been reached by banking services, Dominguez sees no point in asking the local government operations to apply for GFI accounts. “Why do we have to do that?” he asked.

    Dominguez also mentioned that Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said many rural banks would suffer if the issuance was fully implemented.

    “I asked him [Tetangco] ‘what do you think about this?’ He said: ‘we dont understand why, but if you really do it, many rural banks will be affected’,” he said.

    With this, Dominguez said the government is studying the idea of setting up a single bank account for the national government for better cash management.

    “That idea is very good. We have just one single account so that we can manage our cash better. [For example] NAIA [Ninoy Aquino International Airport] has billions of pesos in cash. If we put it all together maybe our cash flow will be managed much better,” he said.

    “I learned that we have plenty of government accounts. So f you consider it as a single government account and then everybody just draws from that, its much easier to manage the cash,” he added.

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