Validity Period of Certificates of Maximum Borrowing and Debt Service Capacities Issued to Local Government Units

October 5, 2012 DOF LOCAL FINANCE CIRCULAR NO. 002-12 TO : All Regional Directors, Bureau of Local Government Finance; Provincial, City and Municipal Treasurers; and Others Concerned SUBJECT : Validity Period of Certificates of Maximum Borrowing and Debt Service Capacities Issued to Local Government Units WHEREAS, the Bureau of Local Government Finance (BLGF), Department of Finance, issues Certificates of Maximum Borrowing and Debt Service Capacities (Certificates) to local government units (LGUs) availing of credit financing as authorized under the Local Government Code; WHEREAS, it has been observed that some LGUs still use such Certificates a year or more after their issuance by the BLGF; WHEREAS, the accounting period of LGUs begins on January 1 of each year and ends on December 31 of the same year; WHEREAS, based on this accounting period, financial statements are being prepared annually and the financial positions of LGUs may vary from year to year, particularly their debt service capacities; WHEREAS, there is a need to supplement Local Finance Circular No. 1-2012, dated April 16, 2012, to provide a validity period for the Certificates issued to local government units. NOW THEREFORE, the following is hereby prescribed: caDTSE SECTION 1. The validity period of Certificates of Maximum Borrowing and Debt Service Capacities (Certificates) issued by the BLGF shall be one (1) year from the date of their issuance. SECTION 2. All unused Certificates issued in calendar year 2011, shall be valid only until December 31, 2012. SECTION 3. All unused Certificates issued prior to 2011 shall be deemed invalid and shall have no force and effect. SECTION 4. This Circular shall take effect fifteen (15) days after publication in the Official Gazette or in a newspaper of general circulation. (SGD.) CESAR V. PURISIMA Secretary