Department Order No. 27-05 dated December 9, 2005 of the Department of Finance

January 4, 2006 BLGF MEMORANDUM CIRCULAR NO. 001-06 TO : All Bureau Officials and Personnel; Regional Directors for Local Government Finance; District Treasurers of Metropolitan Manila; Provincial, City and Municipal Treasurers; and Others Concerned SUBJECT : Department Order No. 27-05 dated December 9, 2005 of the Department of Finance For the information and guidance of all concerned, quoted hereunder is Department Order No. 27-05 dated December 9, 2005 of the Secretary of Finance, amending Department Order No. 32-03 dated November 10, 2003, directing all Provincial, City and Municipal Treasurers, among others, to deposit their funds and maintain depository accounts with the Land Bank of the Philippines and Development Bank of the Philippines, to wit: "All Provincial, City and Municipal Treasurers, Commissioners of BIR and BOC, Heads of attached agencies of the DOF and Heads of all GOCCs shall deposit their funds and maintain depository accounts with: "a) Land Bank of the Philippines; and "b) Development Bank of the Philippines. "By way of exception, and subject to prior approval of DOF, Provincial, City and Municipal Treasurers, Commissioners of BIR and BOC, Heads of attached agencies of the DOF, and Heads of all GOCCs may likewise deposit their funds and maintain depository accounts with banks where government has shares of stocks or which are allowed by law to be government depository banks: "a. Philippine National Bank granted with the authority to accept government deposits from October 10, 2003 up to 03 May 2007 subject to gradual reduction of the ratio of government deposits to total deposit liabilities in accordance with the limitations prescribed by the Monetary Board; aAHDIc "b) Philippine Postal Savings Bank subsidiary of Philippine Postal Corporation, created under Republic Act No. 7354 ("Postal Service Act of 1992"); "c) Thrift, Rural and Cooperative Banks may act as official depository of government funds pursuant to Republic Act Nos. 7906 ("Thrift Banks Act of 1995"), 7353 ("Rural Banks Act of 1992") and 6938 ("Cooperative Code of the Philippines"), and in exceptional cases as stated in DO No. 11-99 and subject to the prior approval and guidelines of the BSP; 1. Thrift Bank (authorized by Republic Act No. 7906) a thrift bank may act as official depository of national agencies, and of municipal, city or provincial funds in the municipality, city or province where the thrift bank is located, subject to such guidelines as may be established by the Monetary Board; 2. Rural Bank (authorized by Republic Act No. 7353) a rural bank may act as official depository of municipal, city or provincial funds in the municipality, city or province where the rural bank is located, subject to such guidelines as may be established by the Monetary Board; and 3. Cooperative Bank (authorized by Republic Act No. 6938) a cooperative bank may act as a depository of government funds for all government departments, agencies and units of the national and local governments, including government-owned or controlled corporations. "d) United Coconut Planters Bank authorized to continue accepting National Government funds until further notice from the BSP subject to limitations prescribed by Monetary Board; ACDIcS "e) Al-Amanah Islamic Investment Bank of the Philippines authorized by Republic Act No. 6848 (Al-Amanah Islamic Bank Charter) under Section 6 (8) to act as an official government depository, or its branches, subdivisions and instrumentalities and of GOCCs, particularly those doing business in the autonomous region. "f) Philippine Veterans Bank authorized by Section 6 of Republic Act No. 7169 which states that the Secretary of Finance, the National Treasurer and his authorized representatives, city and municipal treasurers, as well as custodians of public funds or those belonging to government-owned-or-controlled corporations, are hereby authorized if they so desire to make and actually maintain deposits of any government or corporate funds with the Veterans Bank, which is hereby declared to be a government depository. stated in DO No. 11-99 and subject to the prior approval and guidelines of the BSP; 1. Thrift Bank (authorized by Republic Act No. 7906) a thrift bank may act as official depository of national agencies, and of municipal, city or provincial funds in the municipality, city or province where the thrift bank is located, subject to such guidelines as may be established by the Monetary Board; 2. Rural Bank (authorized by Republic Act No. 7353) a rural bank may act as official depository of municipal, city or provincial funds in the municipality, city or province where the rural bank is located, subject to such guidelines as may be established by the Monetary Board; and 3. Cooperative Bank (authorized by Republic Act No. 6938) a cooperative bank may act as a depository of government funds for all government departments, agencies and units of the national and local governments, including government-owned or controlled corporations. HCEaDI d. United Coconut Planters Bank authorized to continue accepting National Government funds until further notice from the BSP subject to limitations prescribed by Monetary Board; e. Al-Amanah Islamic Investment Bank of the Philippines authorized by Republic Act No. 6848 (Al-Amanah Islamic Bank Charter) under Section 6 (8) to act as an official government depository, or its branches, subdivisions and instrumentalities and of GOCCs, particularly those doing business in the autonomous region. f. Philippine Veterans Bank authorized by Section 6 of Republic Act No. 7169 which states that the Secretary of Finance, the National Treasurer and his authorized representatives, city and municipal treasurers, as well as custodians of public funds or those belonging to government-owned-or-controlled corporations, are hereby authorized if they so desire to make and actually maintain deposits of any government or corporate funds with the Veterans Bank, which is hereby declared to be a government depository. "In all other cases, the Provincial, City and Municipal Treasurers, Commissioners of BIR and BOC, Heads of attached agencies of the DOF, and Heads of all GOCCs shall secure the prior approval of DOF. "They are further reminded that deposits and maintenance of funds with the foregoing banks must be in accordance with the applicable provisions of DO No. 11-99, as amended, BSP Circular No. 110 Series of 1996, applicable Monetary Board Resolutions, and other pertinent rules and regulations. "This Order shall take effect immediately and accordingly amends DO No. 32-03 dated 10 November 2003." Be guided accordingly. cCSHET (SGD.) MA. PRESENTACION R. MONTESA Executive Director DOF Order No. 027-05 DOF Order No. 032-03 February 24, 1999 DOF ORDER NO. 011-99 TO : All the Provincial, City and Municipal Treasurers, the Commissioners of Bureau of Internal Revenue and Bureau of Customs, Heads of all attached agencies of the Department of Finance, and Heads of All Government Owned and/or Controlled Corporations SUBJECT : Guidelines for the Depository Accounts of Local Government Units (LGUs), Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), attached agencies of the Department of Finance (DOF), and Government Owned and/or Controlled Corporations (GOCCs) 1.0 PURPOSE This Order is issued to direct the LGUs, BIR, BOC, attached agencies of the DOF and GOCCs to deposit their funds to the appropriate financial institutions in congruence with the Bangko Sentral ng Pilipinas (BSP) Circular 110, Series of 1996 with particular attention to Sections 2 to 5. The Circular provides for the guidelines governing the acceptance by banks of deposits of the Government, its political subdivisions and instrumentalities, as well as of GOCCs. The issuance shall supersede DOF Order No. 56-98 dated August 14, 1998 and subsequent DOF Memo dated December 21, 1998. 2.0 GENERAL GUIDELINES 2.1 As part of this Department's efforts to strengthen the fiscal position of the Government, the LGUs, BIR, BOC, attached agencies of the DOF and GOCCs shall deposit their funds and maintain depository accounts preferably with any of the Government Financial Institutions (GFls) namely: the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) nearest to their location. 2.2 By way of exception, the LGUs, BIR, BOC, and attached agencies of the DOF and GOCCs may deposit and maintain their cash balances with the Philippine National Bank (PNB) pursuant to Monetary Board (MB) Resolution No. 1233 dated August 26, 1998 and with the Philippine Postal Savings Bank (PPSB), in addition to the two GFIs earlier mentioned. 2.3 No government funds shall be deposited to any other private banking institutions with the further exception of rural and cooperative banks authorized by the BSP to act as depository of government funds pursuant to Section 5(2) of BSP Circular 110, provided that: 2.3.1 A one (1) year phase-out period shall be given to LGUs, BIR, BOC, attached agencies of the DOF and GOCCs to transfer and maintain their deposits and cash balances from authorized rural and cooperative banks with any of the following banks, namely: LBP, DBP, PNB and PPSB. Deposits and cash balances with rural and cooperative banks without prior authorization from BSP to act as depository of government funds pursuant to Section 5(2) of BSP Circular 110, shall be immediately transferred to any of the identified authorized banks under this section; and provided further that, 2.3.2 In exceptional cases where there are no accessible LBP, DBP, PNB and PPSB branches within their respective vicinities, LGUs, BIR, BOC, attached agencies of the DOF and GOCCs may be allowed to deposit and maintain their cash balances with rural and cooperative banks located within or nearest to their respective areas of jurisdiction, provided that a rural and cooperative bank may only act as official depository of government funds pursuant to RA 7353 and RA 6938, respectively, and subject to the prior approval of the BSP pursuant to Section 5(2) of BSP Circular 110 and the pre-requisites for the grant of authority under Section 9 of the same circular. cdlex 3.0 RESPONSIBILITY AND SANCTIONS The Provincial, City and Municipal Treasurers, Commissioners of BIR and BOC, Heads of attached agencies of the DOF and Heads of all GOCCs shall be responsible for the compliance of this Order. Failure to comply with the herein provisions shall subject the responsible officials and/or employees to appropriate criminal and or administrative action. 4.0 EFFECTIVITY This Order shall take effect immediately and shall supersede DOF Order No. 56-98 dated August 14, 1998 and subsequent DOF Memo dated December 21, 1998. (SGD.) EDGARDO B. ESPIRITU Secretary