DOF orders state firms, LGUs to bank with GFIs

MANILA, Philippines - The Department of Finance (DOF) has given government agencies, government owned and controlled corporations (GOCCs) and local government units one year to transfer all their funds to an authorized bank.

The authorized banks, as defined by the DOF in a circular last June, should be government financial institutions (GFIs) with a universal bank license and a Camels rating of at least three. Camels measures a bank’s capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk.

The DOF in June ordered state agencies and controlled firms to deal only with authorized banks to maintain and keep a sound and efficient management of the government’s financial resources.

However, the DOF said they may still keep bank accounts with non-compliant institutions only if there are no accessible GFIs within a 20-kilometer radius of the agency, and when the referred GFIs cannot provide necessary products and services.

Government agencies and corporations, and LGUs should also seek the approval of the DOF to open and maintain an account in a bank other than those authorized.

“As the government’s steward of sound fiscal policy, the Department of Finance formulates, institutionalizes and administers policies to ensure government resources are managed and mobilized judiciously in a manner supportive of the development objectives of the government in promoting the welfare of the people and accelerating economic growth and stability,” the DOF said.