TO share their thoughts on the plan to provide a lending facility for some suppliers of the Cebu City Government, the City Council wants several government agencies and offices of City Hall to discuss the plan.
A proposed resolution sponsored by Councilor Sisinio Andales seeks to authorize Mayor Tomas Osmeña to sign the memorandum of agreement (MOA) with the Development Bank of the Philippines (DBP) to establish the Cebu City Suppliers Lending Facility.
It is an innovative credit facility for the City’s suppliers of goods and services.
“Cebu City has noted that there are delays in the processing of payment to suppliers of goods and services due to mandatory compliance with the requirements of law. This predicament creates tight financial liquidity among small-time suppliers, limiting their capacity to handle several projects at a time as their finances are often tied up with the City,” read a portion of the proposed resolution.
Under the proposed MOA, the City should maintain a deposit with DBP in the form of a current or savings account with an average daily balance of P500 million.
The DBP, on the other hand, will provide funds for the lending facility equal to 50 percent of the City’s average daily balance of its deposits.
The amount of the funds for the lending facility may be increased, as circumstances may allow, subject to the approval of DBP.
Good for 3 years
The City will also have to ensure and certify that those who will avail themselves of the small-time loan are eligible.
The lending facility is exclusive to individuals, partners and corporations with contract in delivering goods and services with the City
Once the MOA will be signed, it will be effective for three years, unless terminated by the two parties.
But before its approval, an executive session is set on Feb. 27 along with DBP, Commission on Audit, City Treasurer’s Office, City Accountants Office, City Legal Office and Osmeña’s executive asssistant Francisco Fernandez to discuss the matter. (RVC)