MANILA – Department of Interior and Local Government Secretary Jesse Robredo said yesterday that only local government units given a seal of good housekeeping will be allowed to secure loans from banks and other financial institutions.
Robredo said the Bureau of Local Government Finance issued a circular that listed down SGH as one of the stringent requisites for LGU’s applying for authority to borrow money from banks and other financial institutions.
The SGH is conferred on LGU’s that have no adverse report from the Commission on Audit, and complied with the posting of the required 12 financial documents.
SGH awardees are also eligible to receive an incentive fund ranging from P1 million to P7 million for their local development projects.
Just recently, the DILG launched the SGH Bronze, Silver and Gold, wherein aside from the two previous requirements, the additional requisites include compliance with the Government Procurement Act and the Anti-Red Tape Act.
Also required are a comprehensive development plan and an above benchmark performance in the local governance performance management system.
Robredo said that with the inclusion of SGH as an additional requirement for borrowing LGUs, “good local governance is fast becoming the norm and is the way to go for local governments.”
Local Finance Circular 1-2012 laid out new documentary requirements, which LGUs need to submit to BLGF before they can be granted certificates of borrowing and debt service capacities should they need to borrow money.
The circular, signed by Department of Finance Secretary Cesar Purisima, whose agency oversees BLGF, supersedes Local Finance Circular 1-2000 issued on Jan. 19, 2000.*PNA