The Department of Finance said over the weekend it will give more time to state-owned and -controlled corporations to transfer their bank deposits to qualified government financial institutions.
Finance Secretary Carlos Dominguez issued a circular giving GOCCs until June 30, 2017 to transfer their bank deposits to state lenders.
The extension also covers national government agencies, local government units and GOCCs that have not complied yet with an older DoF circular issued last year.
The directive states that “all NGAs, GOCCs and LGUs specifically allowed by law, rules and regulations to retain income and/or 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.”
“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… 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,” the order read.
Dominguez said in the new circular it granted the extension “in view of the numerous requests received by the Department, and to minimize operational impact among NGAs, GOCCs and LGUs.”
Circular 002-2016, meanwhile, said 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 the directive.
When the June 30, 2017 deadline lapses and the bank is still unable to meet the requirements of the circular, NGAs, GOCCs or LGUs may request the DoF to extend the deadline… subject to the submission of a transition plan, for DoF’s evaluation and approval.
“The request for extension must be submitted at least ninety days before the deadline. DoF has until the day before the deadline to evaluate, and approve or disapprove the request,” the circular stated.
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 No. 01-2015 on June 1, 2015 directing NGAs, LGUs and GOCCs to deposit funds only in qualified GFIs to help ensure that public funds were tightly safeguarded and as part of government efforts to strengthen its overall fiscal position.
