• THERESA MAE DULMAN
The Bacolod City government is transferring P100-million of its public funds from Land Bank of the Philippines to Philippine Veterans Bank under a 90-day time deposit arrangement, at a 4.5 percent annual interest rate.
Councilor Jude Thaddeus Sayson, chairperson of the Sangguniang Panlungsod Committee on Finance, explained Aug. 18 that placing idle city funds in high-yield accounts generates extra revenue that can directly fund additional local government programs.
“We are looking for a higher-yield investment because it would be a waste otherwise. While you are not using it (funds) yet, we might put it in a 90-day placement to earn extra income, because if you don’t put it in a time deposit and just leave it in a savings account, the earnings will only be minimal,” he said.
A 90-day government security investment of P100,000,000, at a 4.5 percent annual interest rate, yields P1,125,000 in gross interest, resulting in a net payout of P900,000, after deducting a 20 percent withholding tax, Sayson said.
He noted that a 2024 Department of Finance (DOF) memorandum circular endorsed Veterans Bank as an eligible depository bank for local government units (LGUs), recognizing its financial capacity to manage public deposits.
Bacolod City currently maintains depository accounts across multiple financial institutions, including Landbank, the Development Bank of the Philippines, Philippine National Bank, and Veterans Bank.
A portion of city funds remains deposited with DBP to fulfill maintenance requirements tied to an active loan agreement.
But while most members of the SP approved the resolution authorizing the deposit to Veterans Bank, it faced opposition from Councilor Wilson Gamboa Jr.
Gamboa raised concerns on placing public funds in a privately-owned banking institution rather than keeping them solely in government-owned banks.
“If the bank closes, it is not protected by the government. Although it is covered and insured by the Philippine Deposit Insurance Corporation, they can only insure a P1 million deposit,” he said. ||
