Addendum to Memorandum Circular No. 03-2006, on the Requirements to Open LGU Depository Account with Banks Other Than GFIs

October 4, 2013 BLGF MEMORANDUM CIRCULAR NO. 099-13 TO : The Regional Directors of This Bureau; Local Treasurers of Metropolitan Manila; The Provincial, City, and Municipal Treasurers; and All Others Concerned SUBJECT : Addendum to Memorandum Circular No. 03-2006, on the Requirements to Open LGU Depository Account with Banks Other Than GFIs To facilitate the processing of LGU requests for approval of the Secretary of Finance to open and maintain depository accounts with banks other than Government Financial Institutions (GFIs) the Land Bank of the Philippines and the Development Bank of the Philippines the following documents in addition to those required under BLGF Memorandum Circular No. 03-2006, dated February 20, 2006 (a copy of which form an integral part hereof), should be complied with and submitted to this Bureau: IaESCH 1. Letter of the Local Chief Executive of the LGU concerned, containing the request for approval to open and maintain a depository account with the proposed depository bank; 2. Vicinity Map , showing the approximate distance from the Provincial Capitol or the City/Municipal Hall to the proposed depository bank; 3. Certification on Security and Safety concerns ( e.g., Police Reports, PNP and/or AFP Certification) as may be necessary; 4. Certification on the Maximum Borrowing and Debt Service Capacity of the LGU in case the request for approval to open a depository account is in connection with a loan facility with the proposed bank. All Provincial, City and Municipal Treasurers are hereby enjoined to provide their respective Local Chief Executive and Members of the Sanggunian with sufficient copies hereof for their information and guidance. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director ATTACHMENT BLGF Memorandum Circular No. 003-06 dated February 20, 2006 Department of Finance June 30, 2013 Hon. Salvador S. Dela Fuente Municipal Mayor Madridejos, Cebu Dear Mayor Dela Fuente : Subject : Request of the Municipality of Madridejos, Cebu for DOF Approval to Open a Deposit Account with ASPAC Rural Bank, Inc. Ticad, Bantayan, Cebu Branch This refers to a memorandum letter from our Bureau of Local Government Finance (BLGF) dated 14 March 2013, conveying your subject request. Unfortunately, the DOF-CAG was not furnished with a copy of your original letter request. Please be informed that we are currently evaluating the request and we would appreciate if you could provide us a copy of your original letter request with the BLGF. We understand that your request is due to proximity and safety reason. In this regard, we would need your submission of the following in order for us to facilitate the necessary evaluation, to wit: 1. Vicinity Map (indicating distance from Municipal Hall to banks, from RCBC to the GFIs, and the corresponding of mode of transport); and 2. With regards to the security and safety concern, please submit independent reports/certification ( e.g., Police Report, PNP and/or AFP Certification). Additionally, may we also be apprised of any discussions initiated by the Municipality with Government Financial Institutions ( i.e., Land Bank of the Philippines and Development Bank of the Philippines) on possible special arrangement to meet the banking requirements of the Municipality. Thank you. Very truly yours, (SGD.) SOLEDAD EMILIA J. CRUZ Assistant Secretary Corporate Affairs Group July 1, 2013 MEMORANDUM FOR : Atty. Salvador M. Del Castillo OIC-Executive Director Bureau of Local Government Finance SUBJECT : Request of the Municipality of Madridejos, Cebu (as Conveyed by the BLGF) for DOF Approval to Open a Deposit Account with ASPAC Rural Bank, Inc. Ticad, Bantayan, Cebu Branch This refers to your memorandum dated 14 March 2013 about a request from the Municipality of Madridejos, Cebu. We noted that the basic request letter from the Municipality is not among the documents you have forwarded. I was made to understand that upon thorough checking of Ms. Marie Wabe, the assigned analyst, no copy has been furnished to this office. Thus, may we request the BLGF to forward also to CAG the basic/original letter from the Municipal Government of Madridejos, Cebu, indicating its request for DOF approval to open a deposit account with the ASPAC Rural Bank, Inc. Ticad, Bantayan, Cebu Branch. HIAEcT Accordingly, may we provide you with a copy of the letter to the Municipality of Madridejos, Cebu, requesting the following information, to wit: 1. Vicinity Map (indicating distance from Municipal Hall to banks, from ASPAC Rural Bank, Inc. Ticad Branch to the GFIs, and the corresponding of mode of transport); 2. With regards to the security and safety concern, submission of independent reports/certification ( e.g., Police Report, PNP and/or AFP Certification) would be needed; and 3. The CAG have to be apprised of any discussions initiated by the Municipality with Government Financial Institutions ( i.e., Land Bank of the Philippines and Development Bank of the Philippines) on possible special arrangement that meets the banking requirements being sought by the Municipality of Madridejos, Cebu. Please be advised also that the above information needed in the DOF-CAG evaluation is a usual requirement from requesting LGUs. Thank you. (SGD.) SOLEDAD EMILIA J. CRUZ Assistant Secretary Hon. Abelardo S. Pangilinan Municipal Mayor Municipality of Paluan, Occidental Mindoro Attention: Ms. Arlene A. De Veas, ICC Dear Mayor Pangilinan : This is a follow up reply regarding your request for DOF clearance to continue banking with the Philippine National Bank Mamburao Branch. Based on your letter request, we understand that your preference to continue utilizing the banking services of the PNB-Mamburao is due to your long standing relationship with the PNB ( e.g., offers preferential rate on your term deposits and identifies your financial needs). However, based on your submitted copy of the Sangguniang Bayan Resolution No. 01, series of 2012, we noted the following statement: "IV. Maintain a deposit account with the PNB as a pre-implementation requirement which shall have a minimum balance that is sufficient to cover payment of at least (2) amortizations; V. The designation of the Bank as its principal depository Bank , until such time that the Loan including all accrued interest and other charges due thereon, is paid in full, and the authority of the Municipal Mayor and the Municipal Treasurer to open and maintain a deposit account with the Bank where the Municipality's share in IRA and Other Revenues shall be deposited until the loan, including the interest and other financial charges, is fully paid". (Emphasis supplied). Relative thereto, may we be apprised of any discussions initiated by the Municipal Government of Paluan, Occidental Mindoro with the Government Financial Institutions ( i.e., Land Bank of the Philippines and Development Bank of the Philippines) on similar credit/loan facility or with the Municipal Development Fund Office (MDFO) for the Municipality of Paluan's financing needs. Additionally, for your information, may we also provide you with a copy of the DOF Local Finance Circular No. 1-2012 issued and signed by the DOF Secretary, Cesar V. Purisima, dated 16 April 2012, on the requisites for the issuance of BLGF Certification on the Maximum Borrowing and Debt Service Capacity of LGUs, wherein, requirement No. 10 of said Circular is the: " Certification issued by the lending institution stating that it shall not be requiring LGU deposits as compensating balance for the loan if such lending institution is (1) . . . (2) an authorized government depository bank required to obtain the prior approval of the Department of Finance as provided under DOF Department Order No. 27-05 ". Thank you. AcaEDC Very truly yours, (SGD.) SOLEDAD EMILIA J. CRUZ Assistant Secretary Corporate Operations Office, CAG