REPUBLIC OF THE PHILIPPINES BUREAU OF LOCAL GOVERNMENT RINANCE DEPARTMENT OF FINANCE $4 Floor EDPC Building, Bangho Seta ng ilipins Complex Roxas Boulevard, Manila 1004 * Telefax Nos, 527-2780 / 327-2790 Emails bg(@blgCgorph Olicial Website: www ba gop BLGF MEMORANDUM CIRCULAR NO. 15-2016 26 February 2016 FOR All BLGF Regional Directors, Provincial, City, Muni Treasurers and Others Concerned pal 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' and Bangko Sentral ng Pilipinas (BSP) Circular No. 769s. 20127. 1. POLICY AND OBJECTIVES Itis 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 altain 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 barangay 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 pattems 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. " Certificates of Maximum Borrowing and Debl Service Capacities of Local Government Units, dated 16 April 2012 ® 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 Guidelines on the Issuance of the Certiicate of NDSC and NBC to Local Government Units (LGUs) ‘and on the Timely Monitoring and Reporting of LGU Loans and Borrowings Page 1 of 5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 cisapproved 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 Disapnroved/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 - BLGE Checklist of Requirements for the Certification NDSC and NBC, and Annex B - BLGF Acknowledgment Letter Template). li, Formally inform the LCE and require compliance from the LGU of any lacking documents within thirty (30) working days upon receipt of the Fequest (see Attachment B - Notice of Deficiency in Documentary Requirements). If the required documents are not complied within the Fequired period, prepare the appropriate notice to the LCE (see Attachment C - Notice of Return of Letter Request Without Action) Be guided by the procedures in the evaluation of the documentary Fequirements pursuant to LFC No. 1-2012 (see Annex C - Evaluation Procedures for the Issuance of Certificate of NDSC and NBC) ‘Guidelines on the Issuance of the Certificate of NDSC and NBC to Local Government Units (LGUs) {and on the Timely Monitoring and Reporting of LGU Loans and Borrowings Page 2 of 5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) 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 LOMED 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. Fumish the BLGF-ROs the Monthly Inventory Report of Issued Certificates thru their official email address every 10" 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 15" of the month for monitoring purposes 5. Publish in the BLGF Website every 15" of the month the summary of issued Certificates to inform the public of loan applications of the LGUs. Guidelines on the Issuance of the Certificate of NOSC and NBC to Local Government Units (LGUs) ‘and on the Timely Monitoring and Reporting af LGU Loans and Borrawings Page 3 of 5