Guidelines on the Issuance of the Certificate of Net Debt Service Ceiling (NDSC) and Net Borrowing Capacity (NBC) to Local Government Units (LGUs) and on the Timely Monitoring and Reporting of LGU Loans and Borrowings

February 26, 2016 BLGF MEMORANDUM CIRCULAR NO. 005-16 FOR : All BLGF Regional Directors, Provincial, City, Municipal Treasurers and Others Concerned SUBJECT : Guidelines on the Issuance of the Certificate of Net Debt Service Ceiling (NDSC) and Net Borrowing Capacity (NBC) to Local Government Units (LGUs) and on the Timely Monitoring and Reporting of LGU Loans and Borrowings This Memorandum Circular is issued to set the operational guidelines of the Central and Regional Offices of the Bureau of Local Government Finance (BLGF) in the processing of requests of local government units (LGUs) for the issuance of the Certificate of Net Debt Service Ceiling and Net Borrowing Capacity ("Certificate") for all loans and borrowings of LGUs, pursuant to Department of Finance (DOF) Local Finance Circular (LFC) No. 1-2012 1 and Bangko Sentral ng Pilipinas (BSP) Circular No. 769 s. 2012. 2 I. Policy and Objectives It is the goal of the BLGF to facilitate, expedite and render efficient service standards to all LGUs requesting for certification on NDSC and NBC, across all levels and in any geographical jurisdiction. The service standards must ensure efficiency in procedural requirements and enforcement, establish accurate and proper evaluation mechanisms at central and regional level, and render timely reporting and monitoring of LGU loans and borrowings. To attain the above objectives, it is hereby established as the policy of the Bureau to devolve the validation of the documentary requirements of provincial, city, municipal and B arangay applications to the BLGF Regional Offices, build the capacity of concerned units and personnel in the proper monitoring of LGU loans and borrowings, and establish quarterly information release to the public on LGU loans and borrowings, which shall include the magnitude, trends and patterns of loans and borrowings and the analysis on the number of certificates issued by level, type, and purpose of the loans and borrowings on a quarterly and annual basis. II. Guidelines on the Issuance of Certificate of NDSC and NBC A. Responsibilities of the Provincial, City and Municipal Treasurers. The Local Treasurer, in his/her capacity as financial adviser of the LGU regarding disposition of local government funds and on such other matters relative to public finance, shall: 1. Inform the Local Chief Executive (LCE) that all requests of LGUs for the issuance of the Certificate shall file their request/s directly with the BLGF Regional Office (BLGF-RO), except for LGUs in the National Capital Region (NCR), which shall file their applications with the BLGF Central Office (BLGF-CO). 2. Provide assistance to the LCE and concerned local officials to ensure completeness and orderliness of required documents every time a request for the Certificate is filed with the BLGF. The request shall include the required supporting documents listed under DOF LFC No. 1-2012. 3. Inform the BLGF-ROs immediately in case the loan application of the LGU has been disapproved or not pursued by the LGU, citing the corresponding certificate number of the Certificate issued by the BLGF. For LGUs in the NCR, the Local Treasurer shall inform the BLGF-CO (see Annex A Template Letter of Local Treasurer if Loan is Disapproved/Not Pursued) . B. Responsibilities of the BLGF Regional Office (BLGF-RO). The BLGF-RO, through the Regional Director, shall: 1. Assign a Financial Analyst (FA) who shall primarily consolidate and validate the completeness and orderliness of the documentary requirements, and determine the preliminary computation of the Certificate. To complete these tasks, the following functions shall be performed by the FA: i. Acknowledge the LGU request upon receipt (see Attachment A BLGF Checklist of Requirements for the Certification NDSC and NBC, and Annex B BLGF Acknowledgment Letter Template) . ii. Formally inform the LCE and require compliance from the LGU of any lacking document/s within thirty (30) working days upon receipt of the request (see Attachment B Notice of Deficiency in Documentary Requirements) . If the required documents are not complied within the required period, prepare the appropriate notice to the LCE (see Attachment C Notice of Return of Letter Request Without Action) . iii. Be guided by the procedures in the evaluation of the documentary requirements pursuant to LFC No. 1-2012 (see Annex C Evaluation Procedures for the Issuance of Certificate of NDSC and NBC) . iv. Determine the preliminary computation of the NDSC and NBC using the Debt Capacity-Debt Management Module in the electronic Statement of Receipts and Expenditures (eSRE) system. The default SRE data in the Debt Capacity-Debt Management Module are subject to modification using the actual regular income data of the LGU, as reported in the COA audited financial reports for the past three (3) years (see Annex D Guide to Preliminary Computation of NDSC and NBC Using the eSRE System) . v. Prepare the Indorsement to the BLGF-CO certifying the complete, consolidated and validated documentary requirements for the Certificate, together with the preliminary computation generated from the eSRE Debt Capacity and Debt Management Modules (see Annex E Indorsement Letter to BLGF-CO) . AcICHD 2. In case the Financial Analyst positions are not yet filled up at the BLGF-RO, designate a Local Treasury Operations Officer to take on the responsibilities specified under Item 1. 3. Approve the Indorsement prepared by the Financial Analyst after thorough evaluation of the completeness and orderliness of the documentary requirements, and the preliminary computation of the NDSC and NBC. C. Responsibilities of the Local Debt Monitoring and Evaluation Division (LDMED) of the BLGF-CO. The LDMED shall: 1. Review within three (3) working days upon receipt of the endorsement on the certification of completeness and orderliness of the documentary requirements, and the preliminary computation of the NDSC and NBC issued by the BLGF-RO. In case of discrepancies in the computation, the LDMED shall notify the BLGF-RO concerned after the review period. 2. Prepare and finalize within five (5) working days the issuance of the Certificate to the LGU. 3. Furnish the BLGF-ROs the Monthly Inventory Report of Issued Certificates thru their official email address every 10th of the month for monitoring purposes. 4. Furnish the Bangko Sentral ng Pilipinas (BSP) the Monthly Inventory Report of Issued Certificates to facilitate the issuance of Monetary Board (MB) Opinion and the Office of the Secretary, every 15th of the month for monitoring purposes. 5. Publish in the BLGF Website every 15th of the month the summary of issued Certificates to inform the public of loan applications of the LGUs. 6. In cases of LGUs outside NCR which directly applied to the BLGF-CO, endorse to the concerned BLGF-RO within one (1) day from receipt of application. III. Timely Monitoring of LGU Loans and Borrowings All LGU loans and borrowings shall be monitored by the BLGF using the Revised Statement of Indebtedness, Payments and Balances (SIPB). Please refer to Annex F Revised Statement of Indebtedness, Payments and Balances . A. Responsibilities of the Provincial, City and Municipal Treasurers. The Local Treasurers shall: 1. Prepare the annual SIPB by furnishing the data and information based on the loan agreement, which shall include, among others, the kind and purpose of indebtedness, principal amount of loan, name of creditor, approval and maturity date, terms and conditions of the loan, interest rate frequency of payments, annual amortization (principal and interest), major debt covenants, collateral/security, etc. 2. If necessary, coordinate with the Accountant in completing the annual SIPB report by requesting data on the remaining loan balance (principal and interest). In case of bond flotation, request data on deposit to bond sinking fund and sinking fund balance to date. 3. With or without loans, submit to the BLGF-RO the annual SIPB report, except for LGUs in the NCR for which their SIPB reports shall be submitted to the BLGF-CO, on or before 28th of February of the subsequent year. For newly contracted loans, the SIPB report shall be submitted within ten (10) days after the approval of the loan. B. Responsibilities of the BLGF Regional Office (BLGF-RO). The Financial Analyst shall: 1. Encode and upload the annual SIPB report for LGUs on or before 31st of March in the Manage Debt Monitoring Module in the Integrated Information Management System (i2ms). For newly contracted loan/s, encode the information in the i2ms within three (3) working days upon receipt of the SIPB. 2. Provide technical assistance to local treasurers on accomplishing the SIPB. C. Responsibilities of the Local Debt Monitoring and Evaluation Division (LDMED) of the BLGF Central Office (BLGF-CO) . The LDMED shall: 1. Prepare a consolidated report on the annual SIPB for policy formulation purposes of the BLGF and for submission to the DOF and other stakeholders requiring/requesting the report. 2. Provide the compliance report on the SIPB to be used in validating one of the compliance reporting indicated under Operational Performance Goal No. 4 of the Local Treasurers' Performance Standards, and other similar performance metrics. The BLGF Central Office will no longer accommodate any direct requests for certification on NDSC and NBC, except for LGUs within the NCR, beginning 01 April 2016. The Regional Directors of this Bureau are hereby instructed to widely disseminate this Circular to all concerned. Strict compliance of this Circular is hereby enjoined. (SGD.) JOCELYN T. PENDON OIC-Executive Director ANNEX A Template Letter of Local Treasurer if Loan is Disapproved/Not Pursued ____________ Date Hon. Jocelyn T. Pendon OIC-Executive Director Bureau of Local Government Finance Department of Finance 8th floor, EDPC Bldg., BSP Complex, Roxas Blvd., Malate, Manila Dear Director Pendon : This refers to the loan application of this LGU Type with the Name of Financing Institution , with corresponding Certificate of Net Debt Service Ceiling (NDSC) and Net Borrowing Capacity (NBC) issued by that Office, which contains the following information: TAIaHE Certificate No.: Date Issued: Amount of NDSC: Php Amount of NBC: Php Purpose of Loan: In connection therewith, please be informed that the said loan was state if the loan was disapproved or was not pursued by the LGU, and state the reason/s . For your information. Very truly yours, ______________________________ Provincial/City/Municipal Treasurer ANNEX B BLGF Acknowledgment Letter Template ___________ Date Hon . _________________ _____________________ _____________________ Dear Mayor/Governor ______________ : This is to acknowledge receipt of your letter dated ______________ (Date) requesting for the issuance of a Certificate of Debt Service and Net Borrowing Capacity of the ___________________________ (LGU Name) for its loan application with the ___________________________, (Name of Financing Institution) for the _____________ (state purpose of the loan) . Rest assured that this Office will take appropriate action on your request within the reglementary period. Thank you. Very truly yours, _____________________ Regional Director ANNEX C Evaluation Procedures for the Issuance of Certificate of NDSC and NBC (per DOF LFC No. 1-2012, dated 16 April 2012) Requirements Instructional Procedures for BLGF Evaluator 1. Letter request from the Local STEP 1. Validate the application letter of the Local Chief Executive indicating: Chief Executive (LCE) and check compliance using The lending institutions Attachment A BLGF Checklist of Requirements for where the LGU is the Certification NDSC and NBC. applying for a loan Note: Please see LGU Template A Sample LCE Terms and conditions of Letter of Application. the proposed loan The purpose of the loan Determine if the request contains the following: 1. Specific name of lending institution where to apply for a loan. 2. Offer sheet/letter of the lending institution/bank wherein the interest rate and repayment period was indicated or the Terms and conditions of the proposed loan. 3. Specific name of project/projects to be undertaken out of the proposed loan. STEP 2. If any of the above stated requirements is not present, request the LCE to comply with the requirement No. 1, (see Attachment B Notice of Deficiency in Documentary Requirements OR Attachment C Notice of Return of Letter Request Without Action, whichever is applicable). END OF PROCESS 2. Statement of Receipts and STEP 1. Validate from the BLGF eSRE Web Expenditures for the past Information System (http://esrev2.blgf.gov.ph/) the three (3) years uploaded and uploaded and approved (by the BLGF Central Office) approved by the BLGF Statement of Receipts and Expenditures of the LGU Central Office for the last three (3) years. STEP 2. If eSRE reports are for provincial review or for BLGF Central Office review and approval call the attention of the concerned eSRE focal person through any fastest means of communication available, e.g., telephone, text message, etc. STEP 3. If there are no/Deficiency in uploaded eSRE reports for the past three (3) years, call the attention of the LCE (see Attachment B Notice of Deficiency in Documentary Requirements) . END OF PROCESS. 3. Certification of existing/ STEP 1. Evaluate the certification on absence of loan/loans duly existence/absence of loan/s duly certified by the Local certified by the Local Treasurer as to the following details : Treasurer with the following Types of loans & other obligations contracted details : Purpose of loan & other obligations contracted Types of loans and other Name of lending institutions obligations contracted Date of approval & maturity Purpose of loan and Terms and conditions (interest rate & number of other obligations contracted years to pay) Name of lending institutions Remaining balances of loans and other obligations Date of approval and Note: Please see LGU Template B Sample maturity Certification of Local Treasurer on Existing Terms and conditions Loans/Absence of Loans. (interest rate and number of years to pay) STEP 2. Validate the annual amortization schedule Remaining balances of issued by the lending institution as to segregation of loans and other obligations principal from the interest. Each loan of the LGU Annual amortization should have an individual annual amortization schedules (segregating schedule issued by the lending institution. If not, the principal from the emphasize in the letter to LCE (see Attachment B interest) issued by the Notice of Deficiency in Documentary Requirements). lending institution END OF PROCESS 4. Commission on Audit (COA) STEP 1. Evaluate the COA Audit Certificates for the Annual Audit Certificate for last three (3) years, and determine if there are adverse the past three (3) years findings. If the Audit Certificate of the immediate showing no adverse preceding year is not yet available, require the findings against the LGU, submission of year-end financial reports bearing the which is supported by the stamp received by COA. following year-end financial reports: STEP 2. If there were adverse findings and Pre-closing Trial Balance recommendations made by the Auditor, the LGU (General Fund) should submit the action plan as to the level of Balance Sheet (General compliance on such recommendations duly certified Fund); and by the Auditor. Note: Please see LGU Template C Statement of Income and Status of Implementation of Prior Year's Audit expenses Recommendations . If this is not complied with, inform the LCE (see Attachment B Notice of Deficiency in Documentary Requirements). STEP 3. Validate if the LGU submitted financial reports for the past three (3) years, and cross-check the financial data from each reports: Pre-closing Trial Balance (General Fund) Balance Sheet (General Fund); and Statement of Income and expenses If there are no submitted financial reports, request the LCE to submit reports for the past three (3) years (see Attachment B Notice of Deficiency in Documentary Requirements). STEP 4. Validate if the financial reports are certified correct by the Local Accountant. If not certified, request the LCE for certified financial reports for the past three (3) years (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS 5. Certification by the local STEP 1. Validate if the certificate states that the LGU accountant that the LGU has has not incurred any default in the payment of not incurred any default in amortization of an existing loan. Unless the Local the payment of the Treasurer certifies that the LGU has no existing loan amortization of an existing requirement, No. 5 requirement is no longer necessary. loan. Note: Please see LGU Template D Sample Certification of Local Accountant on Default in Loan Payment. STEP 2. If the statement is not present, request the LCE to comply with requirement No. 5 (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS 6. Certification from the STEP 1. Validate if the certificate issued by the secretary of the Sanggunian secretary of the Sanggunian or the legislative body that or the local legislative body the proposed project (specific project) to be financed that the proposed project to by the loan is included in the approved AIP for the be financed by the loan is current year. included in the Approved Annual Investment Plan STEP 2. If the proposed project is not in the AIP, (AIP) for the current year. require the LCE to submit the supplemental AIP that includes the proposed project, approved by the local legislative body (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS 7. Authenticated copy of the STEP 1. Evaluate the authenticated or certified true Resolution/Ordinance copy of the Resolution/Ordinance authorizing the LCE authorizing the Local Chief to negotiate and contract a loan to specific lending Executive to negotiate and institution/bank in behalf of the LGU. The contract a loan in behalf of Resolution/Ordinance must specifically state the the LGU. purpose of the loan and the name of lending institution and the authority of the LCE to negotiate with the lending institution/bank. STEP 2. If the Resolution/Ordinance does not contain the above requirement, request the LCE to rectify the resolution accordingly (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS 8. For loan applications in STEP 1. Validate if the fund source of loan is from relation to foreign-assisted foreign-assisted projects. Require the LCE to submit project: Local Budget Preparation Form Nos. 1 and 2, if the Certified Statement of source of fund is from foreign-assisted projects, Income (see LBP Form otherwise request the document (see Attachment B No. 1) Notice of Deficiency in Documentary Requirements). Statement of Fund Operation (see LBP Form No. 8) END OF PROCESS 9. Certification issued by the STEP 1. Validate if the lending institution is not an lending institution stating that authorized government depository bank that meets the it shall not require LGU requirements of DOF Department Circular No. 001- deposits as compensating 2015, as amended. balance for the loan if such lending institution is (1) not STEP 2. If the lending institution is not an authorized an authorized government depository bank, request the LCE to secure depository bank or (2) an certification from the bank/lending institution stating authorized government that it shall not require LGU deposits as compensating depository bank required to balance for the loan (see Attachment B Notice of obtain the prior approval of Deficiency in Documentary Requirements) . the DOF per Department Circular No. 001-2015. END OF PROCESS 10. Department of the Interior STEP 1. Validate if the LGU passed the Seal of Good and Local Government Housekeeping (SGH) now known as Good Financial (DILG) Seal of Good Housekeeping (GFH) of the DILG-Central Office. Housekeeping awarded to Please refer to Official List of 2014 GFH Passers and the LGU. passers after assessment compliance of the DILG; visit the DILG website for GFH list of passers or check regular memo circulars from the BLGF CO. STEP 2. If the LGU is not on the list of passers, require the LCE to submit a certification from the DILG that the LGU has been conferred with the GFH (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS 11. Proof of Compliance with the STEP 1. Validate if the LGU is a recipient of the GFH. Full Disclosure Policy (FDP) If yes, do not require anymore the LGU to submit a of the DILG as embodied in proof of compliance with the FDP from the DILG. DILG Memorandum Circular No. 2010-83. STEP 2. If no, require the LCE to submit a proof of compliance with the FDP from the DILG (see Attachment B Notice of Deficiency in Documentary Requirements). END OF PROCESS Note: If any or all of the required documents are not submitted within 30 days from receipt of application, issue Attachment C Notice of Return of Letter Request Without Action, copy furnished the BLGF CO. LGU TEMPLATE A Sample LCE Letter of Application ____________ Date Ms. Jocelyn T. Pendon OIC-Executive Director Bureau of Local Government Finance Department of Finance 8th floor, EDPC Bldg., BSP Complex, Roxas Blvd., Malate, Manila Dear Director Pendon : Relative to the loan application of the _________________, (Name of LGU) , with the _____________________, (Name of Financing Institution) may we request for the issuance of Certificate of Net Debt Service Ceiling and Net Borrowing Capacity from that Office, with the following information provided for your reference/consideration: Credit Facility Term of Loan Amount of Loan (Specific Purpose of Loan) Indicate the purpose of Indicate the number of Indicate the amount of the loan (state what years to pay including proposed loan exactly it is in the grace period and the approved Resolution) interest rate Add rows for other additional information as may be necessary Attached are the documents required to facilitate our request in compliance with DOF Local Finance Circular No. 1-2012, dated 16 April 2012, to wit: 1. Statement of Receipts and Expenditures for the past three (3) years, as uploaded, and approved by the BLGF Central Office; 2. Certification of existing/absence of loan/s duly certified by the Local Treasurer; 3. Commission on Audit (COA) Annual Audit Certificate for the past three (3) fiscal years showing no adverse finding against the LGU; 4. Certification by the Local Accountant that the LGU has not incurred any default in the payment of the amortization of an existing loan; 5. Certification from the Secretary of the Sanggunian or the local legislative body that the proposed project to be financed by the loan is included in the Approved Annual Investment Plan for the current year; 6. Authenticated copy of the Resolution/Ordinance authorizing the Local Chief Executive to negotiate and contract a loan in behalf of the LGU; 7. Certified Statement of Income and Statement of Fund (applicable only for loan applications in relation to foreign assisted project); 8. Certification issued by the lending institution stating that it shall not require LGU deposits as compensating balance for the loan; 9. DILG Seal of Good Housekeeping for awarded to the LGU; and 10. Proof of Compliance with the Full Disclosure Policy of the DILG. Thank you. Very truly yours, ____________________ Name and Signature Title of LCE LGU TEMPLATE B Sample Certification of Local Treasurer on Existing Loans/Absence of Loans CERTIFICATION This is to certify that the ____________________________ (Name of LGU) has (state whether the LGU has an existing loan or has no existing loan). Financing Type Purpose Amount Date Date of Interest Tenor Outstanding Institution of Availed Maturity Rate (# of Balance as Loan years of _______ to pay) 1. ________ ________ ________ ________ ________ ________ ________ ________ ________ 2. ________ ________ ________ ________ ________ ________ ________ ________ ________ 3. ________ ________ ________ ________ ________ ________ ________ ________ ________ Add rows as may be necessary Attached is/are the amortization schedule/s for reference. This certification is issued in support of the request of the _______________ (Name of LGU) for the issuance of the Certificate of Net Debt Service Ceiling and Net Borrowing Capacity from the Bureau of Local Government Finance. Done this __________________, (Date) at _____________________, (Name of LGU) Philippines. _________________________________ (Name and Signature) Provincial/City/Municipal Treasurer LGU TEMPLATE C Status of Implementation of Prior Year's Audit Recommendations CY ________ Annual Audit Report Audit Management Status of Reason/s for Observation Recommendations Action Implementation Partial or Non Implementation 1 _________ ________________ _____________ _____________ ______________ 2 _________ ________________ _____________ _____________ ______________ 3 _________ ________________ _____________ _____________ ______________ Name and Signature of Concerned LGU Officials LGU TEMPLATE D Sample Certification of Local Accountant on Default in Loan Payment CERTIFICATION This is to certify that the ______________ (LGU Name) has (state whether the LGU defaulted or not) in the payment of amortization of its existing loan/s. (Provide details of the loan where there was a default in payment.) cDHAES Done this _________ (Date) at __________________, (Name of LGU) Philippines. ____________________________________ (Name and Signature) Provincial/City/Municipal Accountant BLGF Checklist of Requirements for the Certification NDSC and NBC Name of LGU: ____________________ Date of Application: ________________ Prepared and Evaluated by: Date of Evaluation: ___________________________ ___________________________ Financial Analyst ATTACHMENT B Notice of Incomplete Documentary Requirements ___________ Date Hon . _________________ _____________________ _____________________ Dear Mayor/Governor _________ : This refers to your letter dated ______________ (date) requesting for the issuance of a Certificate of Net Debt Service Ceiling and Net Borrowing Capacity of the ________________________ (name of LGU) for its loan application with the ________________________, (Name of Financing Institution) for the _____________ (state purpose of the loan) . In this connection and in order to complete the assessment of your application and determine the financial viability of the proposal, please submit to this Office the soonest possible time the documents marked X in the attached checklist, per Local Finance Circular No. 1-2012 dated April 16, 2012. Please be reminded that should this Bureau fail to receive any information regarding the matter within thirty (30) days from receipt hereof, said request shall be returned without action . Thank you. Very truly yours, _______________________ Regional Director ATTACHMENT C Notice of Return of Letter Request Without Action ___________ Date Hon . _________________ _____________________ _____________________ Dear Mayor/Governor _______________: This refers to your letter dated _____________ (date) requesting for the issuance of a Certificate of Net Debt Service Ceiling and Net Borrowing Capacity of the ________________________ (name of LGU) for its loan application with the ________________________, (Name of Financing Institution) for the ______________ (state purpose of the loan) . In connection therewith, since thirty (30) working days have lapsed and no reply was received from your Office, per our letter request dated ____________, (date) requiring the submission of the lacking documents to facilitate the request (copy attached), we regret to return your letter request without action . Thank you. Very truly yours, _____________________ Regional Director ANNEX D Guide to Preliminary Computation of NDSC and NBC Using the eSRE System eSRE Central System v2.1 User eSRE Debt Management Module. This module describes the procedure for: 1. Creating, editing records for debt certification and generating a debt certificate; 2. Creating and editing data for debt monitoring and generating debt monitoring report; and 3. Creating and maintaining the barangay listing. eSRE Debt Capacity Module. This module is used for entering the data required for debt certification and the generation of a Debt Certificate. Creating a Debt Certificate Use this procedure to create a debt certificate. Please take note that the prerequisite is for the User to have an "Action Officer" role who must login in the eSRE Central System. ASEcHI Procedures: 1. Click Debt Management -> Debt Capacity from the navigation panel. 2. The Debt Capacity page is displayed as: 3. Tick on New Entry. <<New Entry>> note appears. 4. Enter Year. 5. Select Type: a. LGU for Province, City, or Municipality b. Barangay 6. Click lookup button Barangay field to select for the LGU a. For LGU look up, the Local Government Unit List page is displayed: b. For Barangay look up, the Debt Barangay List page is displayed: c. Click Barangay . i. If selected Type is LGU, system automatically displays LGUs approved eSRE data for the last three years (depending on the given year) . ii. If selected Type is Barangay , user enters the three-year data. 7. Enter Purpose of Loan. 8. Enter Estimated Project Cost. 9. Under the Lending Information section, click the lookup button Lending Institution field: a. The Lending Bank List page is displayed: b. Enter Search Criteria then click Search button. To view more records, click Fetch More Records . c. Click 10. Enter Interest Rate. 11. Enter No. of Years to Pay. 12. Enter No. of Month(s) Grace Period. System computes for the Annuity Factor . 13. Enter Annual Amortization of Existing Loan (Principal + Interest) . 14. Click Estimated Borrowing Capacity. 15. Enter Remarks. 16. Enter Signatories. 17. Select Other Lending Institution/s . 18. Click Save button to save the record. - End of Process - Editing a Debt Certificate Use this procedure to edit a debt certificate. Note that the prerequisites are: (i) User with Action Officer role must login in the eSRE Central System ; and (ii) the certificate is not yet approved. ITAaHc Procedures: 1. Click Debt Management -> Debt Capacity from the navigation panel. 2. The Debt Capacity page is displayed. 3. To retrieve the certificate record: a. Enter Debt Certificate No., then click Fetch button. b. Search record using the lookup button 4. The Debt Capacity page is displayed. 5. The Data Capacity record displays. 6. Update as necessary. 7. Click Save button to save the record. - End of Process - Debt Certification This module is used to generate a debt certificate. Note that the prerequisites are: (i) User must be an Action Officer or an Admin ; and (ii) User must login in the eSRE System . Procedures: 1. Click Debt Management -> Debt Certificate from the navigation panel. 2. The Debt Certificate Printing page is displayed. 3. Click lookup button Debt Capacity List page is displayed as: 4. Click a. To review the certificate, click For Review. b. To print official certificate, click Approved . c. To cancel an official certificate, tick Cancelled . 5. Click Generate Certificate. The certificate is displayed. a. If the status is For Review, the certificate has a "DRAFT" watermark. b. If the status is Approved , system assigns official certificate number to the certificate. c. If the status is Cancelled , the certificate has a "CANCELLED" watermark. 6. User may print or save the certificate using the installed PDF viewer. - End of Process - ANNEX E Indorsement Letter to BLGF-CO 1st Indorsement _____________ (Date) Respectfully transmitted to the OIC-Executive Director, Bureau of Local Government Finance, Manila, for appropriate action the herein preliminary computation of Net Debt Service Ceiling (NDSC) and Net Borrowing Capacity (NBC) of the ___________________, (Name of LGU) relative to its loan application for fiscal year ____, with the ___________________________________, (Name of Financing Institution/Bank) for the purpose of ___________________________ (as stated in the Resolution/enumerate the loan purposes if provided) . The _______________ (Name of LGU) has an estimated NDSC of Php___________ and an NBC of Php_____________, based on the submitted audited financial reports of the LGU for the past three years, herein enclosed for ready reference, as follows: (identify the enclosures) 1. Enclosure A Detailed Statement of Income Sources; 2. Enclosure B Income and Expenditures; 3. Enclosure C Average Locally Sourced Income; and 4. Enclosure D Computation of NDSC and NBC. This Indorsement further certifies to the completeness and orderliness of the original documents submitted by the same LGU, per Attachment A BLGF Checklist of Requirements for the Certification NDSC and NBC duly certified by the Financial Analyst of this Office, with the recommendation for the final issuance of the Certificate by that Office. Thank you. CHTAIc _____________________________ Signature over Printed Name of the BLGF-Regional Director ENCLOSURE A Detailed Statement of Income Sources Name of LGU: __________________ Income Classification: _______________ 2012 2013 2014 2015 Real Property Tax (RPT) 0.00 0.00 0.00 Less: Discount 0.00 0.00 0.00 Net RPT 0.00 0.00 0.00 Business Tax 0.00 0.00 0.00 - Tax on Business 0.00 0.00 0.00 - Franchise Tax 0.00 0.00 0.00 - Tax on Sand, Gravel & Other Quarry Resources 0.00 0.00 0.00 Contractors 0.00 0.00 0.00 - Tax on Delivery Trucks & Vans 0.00 0.00 0.00 - Amusement Tax on Admission 0.00 0.00 0.00 - Banks & Other Financial Institutions 0.00 0.00 0.00 - On Peddlers 0.00 0.00 0.00 - Other Business Taxes 0.00 0.00 0.00 - Fines & Penalties 0.00 0.00 0.00 Other Taxes - Tax on Transfer of Real Property Owners 0.00 0.00 0.00 - Real Property Tax on Idle Lands 0.00 0.00 0.00 - Professional Tax 0.00 0.00 0.00 - Occupational Tax 0.00 0.00 0.00 - Community Tax 0.00 0.00 0.00 - Other Local Taxes 0.00 0.00 0.00 - Fines & Penalties Local Taxes 0.00 0.00 0.00 Fees & Charges 0.00 0.00 0.00 - Weights and Measures 0.00 0.00 0.00 - Permit Fees 0.00 0.00 0.00 - Franchising and Licensing Fees 0.00 0.00 0.00 - Other Permits & Licences 0.00 0.00 0.00 - Fines & Penalties 0.00 0.00 0.00 - Registration Fees 0.00 0.00 0.00 Service Income - Clearance/Certificates/Fees 0.00 0.00 0.00 - Athletic and Cultural Fees 0.00 0.00 0.00 - Garbage Fees 0.00 0.00 0.00 - Inspection Fees 0.00 0.00 0.00 - Medical, Laboratories, Dental Fees 0.00 0.00 0.00 - Toll and Terminal Fees 0.00 0.00 0.00 - Motor Vehicles Users Charge 0.00 0.00 0.00 - Transcript of Records Fees 0.00 0.00 0.00 - Hospital Fees 0.00 0.00 0.00 - Tuition Fees 0.00 0.00 0.00 - Processing Fees 0.00 0.00 0.00 - Other Fines & Penalties 0.00 0.00 0.00 Receipts from Economic Enterprises 0.00 0.00 0.00 - Income from Cemetery 0.00 0.00 0.00 - Income from Markets 0.00 0.00 0.00 - Income from Slaughterhouse 0.00 0.00 0.00 - Income from Waterworks System 0.00 0.00 0.00 - Printing and Publication Income 0.00 0.00 0.00 - Rent Income 0.00 0.00 0.00 - Landing and Parking Fees 0.00 0.00 0.00 - Income from Waterworks 0.00 0.00 0.00 - Other Fines and Penalties 0.00 0.00 0.00 - Other Business Income 0.00 0.00 0.00 Other Income 0.00 0.00 0.00 - Interest Income 0.00 0.00 0.00 - Subsidy from Other Funds 0.00 0.00 0.00 - Other (Miscellaneous) Income 0.00 0.00 0.00 - Other Fines and Penalties 0.00 0.00 0.00 - Gain on Sale of Disposed Asset 0.00 0.00 0.00 Internal Revenue Allotment 0.00 0.00 0.00 0.00 Share from PAGCOR/PCSO 0.00 0.00 0.00 Other Share from National Tax Collection 0.00 0.00 0.00 Grand Total 0.00 0.00 0.00 0.00 ==== ==== ==== ==== Prepared by: Date Prepared: ______________ Name and Signature of Financial Analyst BLGF Region _____________ Note: To be included as enclosure in the indorsement letter to be sent to BLGF-CO after the preliminary computation of Net Debt Service Ceiling and Net Borrowing Capacity. ENCLOSURE B INCOME AND EXPENDITURE Barangay/Municipal/City/Province: 0 Project: Name of Financing Institution - Project Name - Amount of Project Tenor: ______ years inclusive of ___- yr grace period at ____% interest rate (In Thousand Pesos) 2012 2013 2014 2015 Income Sources Real Property Tax - - - Business Tax - - - Fees and Charges - - - Receipt from Eco. Ent. - - - IRA - - - - Other Share fr. National Tax Coll. - - - Annual Regular Income - - - Others - - - Borrowings Grants/Aids/GSEF Beg. Balance Add: Subsidies (Net) Less: Finance Cost Total Income - - - Expenditures PS MOOE Capital Outlay 20% Development Fund Debt Service 5% Calamity Fund 2% Discretionary Fund Total Expenditures Surplus/Deficit ==== ==== ==== ==== Province/City/Municipal Mayor Provincial Governor Hon. (Name of LCE) with (without) existing loans as certified by the Provincial/City/Municipal Treasurer, (name of Local Treasurer) Prepared by: _____________________ Financial Analyst Note: To be included as enclosure in the indorsement letter to be sent to BLGF-CO after the preliminary computation of Net Debt Service Ceiling and Net Borrowing Capacity. ENCLOSURE C Average Locally Sourced Income (2012-2014) 0 (In Thousand Pesos) Average Annual Income 2012 2013 2014 1. Real Property Taxes - - - - 2. Business Taxes - - - - 3. Fees and Charges - - - - 4. Receipts from Eco. Ent. - - - - Locally Sourced Income (LSI) - - - - 5. IRA - - - - 6. Share from Nat. Tax Coll. - - - - Total Regular Income - - - - === === === === Note: IRA in the Average Annual Income is based on CY 2015 Final IRA as estimated by DBM. Amortization Schedule Financing Institution Total Principal Interest GRT Name of Financing Institution - - - - - - - - - - - - - - - - Total - === Prepared by: Date Prepared: _________________ ___________________ Financial Analyst Note: To be included as enclosure in the indorsement letter to be sent to BLGF-CO after the preliminary computation of Net Debt Service Ceiling and Net Borrowing Capacity. ENCLOSURE D Net Debt Service Ceiling and Net Borrowing Capacity FY _________ 0 (In Thousand Pesos) Year Average Other IRA Annual Maximum Annual Net Borrowing Locally Share Regular Debt Amortization Debt Capacity Sourced from Income Service of Existing Service income National (ARI) Capacity Loan Ceiling (LSI) Tax Coll. (Principal+Interest) (2+3+4) (5 x 20%) (6-7) (8 x ____) (1) (2) (3) (4) (5) (6) (7) (8) (9) 2015 - - - - - - - - Note: 1) Debt Service Capacity is computed in accordance with Sec. 324b of the LGC , which is 20% of the AR. 2) Annual Regular Income for CY 2015 is determined based on the average locally sourced income and share from national tax collection for the past 3 years plus CY 2015 Final IRA DBM estimate. 3) Annual Amortization of existing loans were based from the availed loans from the _______. 4) Net Borrowing Capacity is computed based on the annuity factor of ______ (___%, ___ yrs). Prepared by: Noted by: _____________________ _____________________ Financial Analyst Regional Director Date Prepared: __________________ Note: To be included as enclosure in the indorsement letter to be sent to BLGF-CO after the preliminary computation of Net Debt Service Ceiling and Net Borrowing Capacity. ANNEX F Revised Statement of Indebtedness, Payments and Balances (SIPB) Annual Statement of Indebtedness, Payments and Balances (SIPB) Name of LGU: ___________________ Instruction: Please prepare a Statement for each kind of loan. Item Particulars Details No. REPORT HEADINGS 1 LGU Income Classification 2 Date of Report 3 Bank (or Creditor) 3.1 Date of Certification NDSC/NBC 4 If not authorized depository bank, state the DOF approval details 5 Loan Reference Number 5.1 Monetary Board (MB) Resolution Number 5.2 Date of MB Opinion 5.3 Amount of Proposed Loan 5.4 Certificate Number NDSC/NBC 6 Date of Approval of Loan 7 Amount Approved* 8 Name of Mayor/Governor at the time of Contract Signing 9 National Government Guarantee 10 Type of Indebtedness Instrument 11 Purpose of Indebtedness 12 If Others, please specify purpose of indebtedness here 12.1 Is the Project (Loan) included in the Annual Investment Plan? 12.2 If not included in AIP, what is the remedy? 13 Council Resolution No. (Authorizing Mayor/Governor) 14 Economic/Useful Life of the Project (Subject of Loan) 15 Maturity Date 16 Terms of Indebtedness 17 Terms and Conditions: No. of Years of Indebtedness 18 Terms and Conditions: Interest Rate 19 Frequency of Payment 20 Terms and Conditions: Grace Period (Number of Months) Item Body of Report Amount/Details No. 21 Annual Amortization: Principal 22 Annual Amortization: Interest 23 Cumulative Quarterly Payment During the year: Starting Date of Payment 24 Cumulative Quarterly Payment During the year: Principal 25 Cumulative Quarterly Payment During the year: Interest 26 Total Amount Released (Availment as of date) 26.1 Remaining Balance to Date/Undrawn Amount (outstanding loan after principal and interest payments) 27 Outstanding Loan After Principal and Interest Payments 28 Arrears: Principal (if any) Statement of Indebtedness, Payments and Balances (SIPB) Item Body of Report Amount/Details No. 29 Arrears: Interest (if any) 30 Major Debt Covenants 30.1 Collateral Security 31 If cash deposits, how much? 32 Deposit to bond sinking fund for the year 33 Sinking fund balance to date, if any 34 Breakdown of fees and other related costs (of loan) 35 Other relevant terms and conditions (of loan) 36 Current Mayor/Governor (as of date of this report) 36.1 Is the said loan being paid as of date/Default? 36.2 If No, state the reason for discontinuing the payment 36.3 COA Audit Report No./Date Related 36.4 Accountant Name at the Time of Default 37 Treasurer Name at the Time of Default 38 Annual Budget at the time of Loan 39 Current Annual Budget 40 Current Budget Allocation for Debt Service 41 Date of Award of Good Financial Housekeeping (GFH) 41.1 Current Project/Other Obligations Contracted (paid from CO fund) 41.2 Project 1 (Bond Floatation) 41.3 Project 2 (Construction) Certified Correct by: Date Issued: _________________________ _____________________ Signature over Printed Name of Local Treasurer Note: * Please indicate if on a staggered basis Sources of SIPB Information Item Information Instruction Source of No. Type Information 1 Income Class Indicate the LGU income classification. Latest Department Order 2 Date Indicate cut-off date of report, e.g., Ending Reporting date (mm/dd/yyyy) 1st Qrt. March 31, 2016. 3 Name Indicate the name of the lending institution Loan Agreement (Bank/Financial Institution or Private Corporation). Write full name. Example: Land Bank of the Philippines, Development Bank of the Philippines 3.1 Date Input the issue date of Certificate of Net CNDSBC issued by (mm/dd/yyyy) Debt Service and Borrowing Capacity BLGF (CNDSBC) by BLGF. 4 Number Other than Authorized Government Department of Depository Bank (LBP & DBP), LGU Finance (DOF) may acquire loan from other facility. Indicate authorization number as per DOF 001-2015 (If LGU required to establish fund deposit to not Authorize Government Depository Bank). 5 Number Refer to the lending institution assigned Loan Agreement number sequence to the loan as reference. 5.1 Number Loans from GFI (DBP/LBP) passes Bangko Sentral ng through the Monetary Board. Pilipinas (BSP) Refer to the MB resolution number provided. 5.2 Date Refer to the MB resolution date of Bangko Sentral ng (mm/dd/yyyy) approval. Pilipinas (BSP) 5.3 Amount Amount indicated in the original LGU/Lending application for loan. Institution 5.4 Number Issued Certificate Number of Max NDSC/NBC issued Borrowing Capacity. by BLGF 6 Date Date of Approval of Loan. Loan Agreement (mm/dd/yyyy) 7 Amount Indicate the principal amount of loan. Loan Agreement 8 Name Indicate the name of the Mayor/Governor LGU at the time when the contract was signed with the lending institution. 9 Name Indicate the type of guarantee provided LGU by national government, if any. 10 Description List Specify the type of indebtedness instrument. Loan Agreement Example: Bond or Syndicated/Bilateral Debt, Loan (Secured or Unsecured), Lease (Build-Operate-Transfer, Build-Lease- Transfer, etc.), Mortgage, Combination, etc. 11 Type of Loan Indicate the reason for borrowing. Loan Agreement/ Example: Construction of: Health Care Council Resolution Center, Social Welfare Centers, Trade Center (Public Market or alike), Water District, School, Government Center (Provincial Hall, City Hall, Municipal Hall, Barangay Hall),Transport Terminal, Sea Port, IT Systems, Entertainment/Sports Center, Waste Management Facility, Disaster/Risk Management Center, Others 12 Description List If you checked "Others", please specify Loan Agreement/ here the purpose of your loan. Council Resolution 121 Pre-defined This item is answerable by Yes or No only. LGU Answer 12.2 Description List There are cases that the loan is not included LGU in the AIP. Indicate the remedy to acquire loan. Example: Supplemental AIP, Council Resolutions, etc. 13 Number Indicate here the council resolution number LGU sequence of document authorizing Mayor/ Governor to acquire loan 14 Number Period or number of years over which an LGU Project Details asset (machine, property, computer system, etc.) is expected to be usable with normal repairs and maintenance, for the purpose it was acquired, rented, or leased. Expressed usually in number of years, process cycles, or units produced. It is usually less than the asset's physical life, and is the period over which the asset's depreciation is changed. Also called average life, service life, effective life, mean life, or useful life. 15 Date Indicate the date that the loan finally Loan Agreement (mm/dd/yyyy) becomes due or date of settlement or completion of payment. 16 Description List Specify the major terms or conditions of Loan Agreement the Loan Agreement. 17 Number Specify the number of years the LGU is Loan Agreement bound to the lending institution to pay in full. (Period covered to pay the loan.) 18 Rate Indicate the agreed interest rate of the loan. Loan Agreement (If the loan rate is floating, indicate the base and spread.) 19 Pre-defined Indicate the agreed frequency of payment: Loan Agreement Answer Monthly, Quarterly, Semi-annually, or Annually Select only one answer. 20 Number Indicate the number of years that the Loan Agreement lending institution provided to LGU to defer the payment of principal. Usually this first one or two years of the loan. 21 Amount Indicate the amount of principal to be Loan Agreement paid based on amortization schedule. 22 Amount Indicate the amount of interest to be paid Loan Agreement based on the amortization schedule. 23 Date Indicate the 1st date of payment in relation Record of Debt (mm/dd/yyyy) to the amortization schedule. Service (RDS) 24 Amount Indicate the amount of cumulative RDS principal payment made during the year. 25 Amount Indicate the amount of cumulative interest RDS payment made during the year. 26 Amount Indicate the total amount that the lending Loan Agreement institution released to the LGU. 26.1 Amount Indicate the remaining loan balance as of Accounting Office the reporting date. Subsidiary Ledger 27 Amount Indicate the remaining loan balance as of Accounting Office the reporting date. Subsidiary Ledger 28 Amount Indicate the amount of principal in arrears Subsidiary Ledger as of reporting date. 29 Amount Indicate the amount of interest in arrears Subsidiary Ledger as of reporting date. 30 Description List Indicate any restrictions/covenants, if any, Loan Agreement of the loan/s in favor of the lender. (i.e., Prepayment of loan is not allowed, debt equity ratio should not reach a certain level specify by the lender, etc.) 30.1 Description List Indicate the collateral if any, attached to Loan Agreement the loan/s 31 Amount Collateral are sometimes deposit, indicate Loan Agreement here required amount of deposits. 32 Amount Indicate the amount set aside for the Accounting installment payment of maturing loans/ bonds 33 Amount Indicate the cumulative balance of sinking Accounting fund if any, reporting date. 34 Description List There are costs associated in each loan. LGU Indicate here the fees and other related cost incurred to facilitate the loan. 35 Description List If any, and other than the terms and Loan Agreement conditions indicated above, enumerate herewith the other relevant terms. 36 Name Current Mayor/Governor may not be the LGU same local chief executive during the signing of Loan Agreement, indicate here the current Mayor/Governor. 36.1 Pre-defined This item is answerable by Yes or No only. LGU Answer 36.2 Description List Briefly enumerate here in not more than LGU three (3) reasons for the default. 36.3 Number Defaults are usually one of the subject of COA the COA audit report. Indicate here the related number sequence or reference of the report or the date the report was issued. 36.4 Name Indicate there the name of the accountant at LGU the time of default 37 Name Indicate there the name of the treasurer at LGU the time of default 38 Amount Indicate here the annual budget at the time LGU the Loan Agreement was signed. 39 Amount Indicate here the annual budget of the LGU LGU as of reporting date. 40 Amount Indicate here the current year budget LGU allocation for debt service 41 Date Indicate the date of certification LGU (mm/dd/yyyy) 41.1 Description List Enumerate here the other obligations of the LGU LGU. Do not include here loans being reported in same manner as this form. These projects may be usually paid in cash or staggered payment without interest. 41.2 Amount Indicate the name of the project and the LGU amount of obligation due for the current year. Declare the next year obligation on the next year report. 41.3 Amount Indicate the name of the project and the LGU amount of obligation due for the current year. Declare the next year obligation on the next year report. Footnotes 1. Certificates of Maximum Borrowing and Debt Service Capacities of Local Government Units, dated 16 April 2012. 2. Guidelines on Requests for Monetary Board Opinion on the Monetary and Balance of Payments Implications of Proposed Domestic Borrowings by Local Government Units (LGUs), pursuant to Section 123 of R.A. No. 7653, dated 26 September 2012.