DOF sets deadline for govt deposits transfer


Government agencies, state-owned and -controlled corporations, and local governments have until June 30 next year to transfer their bank deposits to qualified government financial institutions (GFIs), the Department of Finance (DOF) said over the weekend.

Under a new department circular issued by Finance Secretary Carlos Dominguez 3rd, the extension covers national government agencies (NGAs), local government units (LGUs) and government-owned and -controlled corporations (GOCCs) that have yet to comply with a DOF circular issued last year directing them to deposit funds only in GFIs that have passed the standards set by the Finance department.

The directive refers to Section 5.2 of Department Circular (DC) 01-2015, as amended by DC 03-2015, which states that “all NGAs, GOCCs, and LGUs specifically allowed by law, rules and regulations to retain income for operations and/or working balances shall deposit and maintain accounts with GFIs with a universal bank license and CAMELS rating of at least “3”.

Section 1 of DC 002-2016 issued by Dominguez states that, “Accordingly, all NGAs, GOCCs or LGUs maintaining accounts with banks not compliant with the requirements of Section 5.2 of DC No. 01-2015, as amended, except those allowed under Sections 5.3 and 5.4 thereof, shall have until June 30, 2017 to transfer all funds and cash balances to a bank compliant with the provisions of said Section 5.2.”

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

“From the date of the effectivity of this Circular until June 30, 2017, NGAs, GOCCs and LGUs may maintain existing accounts with a non-compliant bank but may not increase deposit balances beyond what they were as of the effectivity of this Circular,” it stated.

When the June 30, 2017 deadline lapses, “and the bank is still unable to meet the requirements of Section 5.2 of DC No. 01-2015, NGAs, GOCCs or LGUs may request the DOF to extend the deadline indicated in Section 1 hereof by one (1) year, subject to the submission of a transition plan, for DOF’s evaluation and approval,” it added.

The circular added that the request for extension must be submitted at least 90 days before the deadline.

DOF has until the day before the deadline to evaluate, and approve or disapprove the request, it noted.

If the government agency or GOCC does not request for an extension, or if its request is disapproved, it “must transfer all funds and cash balances to banks that meet the requirements of Section 5.2 of DC No. 01-2015.”

The DOF issued DC 01-2015 on June 1, 2015 directing NGAs, LGUs and GOCCs to deposit funds only in qualified GFIs to help ensure that public funds are tightly safeguarded and as part of government efforts to strengthen its overall fiscal position.


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