Rama wants to pre-terminate time deposit

CEBU, Philippines - In preparation for the implementation of the K to 12 program, Cebu City Mayor Michael Rama wants to pre-terminate the city’s P165.31 million time deposit with the Philippine Veterans Bank.

“Why it should be kept? There’s a need to pre-terminate the money so that it can be used for special education fund matters and for other purposes under the Local Government Code.

There are so many things that we need to prepare for K to 12, to prepare for better quality of education, to prepare for all requirements needed for our education programs, among others,” Rama said.

The city placed P165,308,397 under time deposit in 2011. The money is expected to ‘mature’ in January 2016. 

The pre-termination, Rama said, does not mean that the city ran out of money to finance the construction of school buildings for the K to 12 program.

Asked why he made the decision only now, Rama said he was not informed about the city’s time deposits properly when he assumed as mayor in 2010.

He said there is a need to revisit resolutions of the City Council, particularly those that deal with financial matters.

“The need is now and let the executive handle it and let the Council discuss (on) this,” he said.

Councilor Margarita Osmeña, chair of the council committee on budget and finance, said the amount should not have been put under time deposit for five years because, in effect, the money became “idle fund.”

“If you’re going to pre-terminate, that means you are admitting that it shouldn’t have been there. Now, they’re saying it wasn’t them (executive department). It’s not something that was hidden because we kept on questioning it (for) several times,” she said.

“That’s supposed to be idle funds. I don’t think any local government unit has seemingly idle funds for five years. It’s a lot of money. Maybe you put in a time deposit like 30, 60 or 90 days… not good for five years. Periodically, we questioned, why so long? The answer at the time is that we would be earning a lot,” she added.

Osmeña claimed that the pre-termination is being allowed, however, the payment for penalty is disallowed by the Commission on Audit.

In an executive session earlier, Councilor Noel Wenceslao said the pre-termination penalty is pegged at 50 percent of the remaining fund.

The city treasurer’s office, nevertheless, is now trying to verify how much interest the time deposit fund has earned for the past three and half years compared to the penalties the bank might impose upon the city.

Furthermore, Osmeña said the P165.31 million used to be under the General Fund’s time deposit and not under the Special Education Fund.

This prompted Osmeña’s committee to ask the bank to certify that the amount was really allotted for SEF and not only a “paper entry” as reflected in the September 22 daily cash report from the city treasurer’s office. — (FREEMAN)