CEBU, Philippines - Cebu City Mayor Michael Rama has confirmed that the city government is gradually withdrawing its deposits from the Philippine Postal Savings Bank (PPSB).
The money was transferred to the Land Bank of the Philippines and other depository banks of the city. Rama said he had sent the communication to the PPSB last month expressing his intention to withdraw the city’s account.
“Mas maayo nga naa na’y nawithdraw. Mao na akong sigulti, ayaw ko ninyo i-challenge kay dugay naman ta sige’g badlong nila ( It’s good that we have started to withdraw. This is what I had been telling them; do not challenge me because I had long been calling their attention),” Rama said.
In fact, this was allegedly the reason why the bank dishonored the two checks of the city. Acting city treasurer Ofelia Oliva said the checks that allegedly bounced were not issued as payment of the city government’s obligation but rather an advance tax payment of Chong Hua Hospital.
Oliva said the checks amounting to P16,000 were deposited in the city’s PPSB account but was not accepted by the bank because of an earlier notice from the city government that it is closing its account.
The incident prompted Councilor Margot Osmeña to deliver a privilege speech last Wednesday asking Oliva, bank manager Ricardo Cordova and city administrator Jose Marie Poblete to appear before the council on a special session today.
Osmeña wanted an explanation from the bank official as well as the two city executives on the matter.
Oliva explained that when the City Hall paid its obligation to Chong Hua Hospital for their health services rendered to the beneficiaries of the City Hospitalization Assistance and Medical Program, the city deducted an advance withholding tax from the amount.
The city usually collects .05 percent of withholding taxes out of the payment that the city will be made to the City Hall clients, suppliers, contractors and for whatever services rendered to the city.
However, the two checks that were intended for deposits to the account of the city was not immediately deposited by one of the tax collectors named Norman Tatoy, whom Oliva already directed to give his formal explanation.
Oliva and Poblete assured that they will appear before the City Council this morning to clear things out.
The city began to have reservations against PPSB when, during one of the hearings in court on the Rallos case, which was reported in a newspaper, the bank’s representative told the court that the bank is willing to release the claim amounting to P133 million. The bank denied it is willing to release the money.
The city has also learned that PPSB’s office in Manila has ordered its P. del Rosario Branch to freeze the city’s account, according to a source. Since then, the city has stopped depositing at Postal Bank.
Some of the deposits were transferred to the Land Bank of the Philippines while some were transferred to other government and non-government banks.
Lawyer Jade Ponce, mayor’s consultant and one of the counsels of the city in the Rallos case, earlier said that it is not surprising if the city government will make such move.
He said that PPSB was supposed to protect its client, which is Cebu City, but it appears that the bank is siding with the Ralloses.
The heirs of the late Rev. Fr. Vicente Rallos want the city to pay the 4,654 square meter property used by the government as public road in Barangay Sambag 2. (FREEMAN)