a)    Legal Bases:

Republic Act 7160 dated 10 October 1991

Executive Order No. 127 dated 30 January 1987

BSP Circular Letter of 2002 dated 28 May 2002

BSP Circular No. 926 dated 13 September 2016

Department Order No. 054.2016 dated 25 October 2016

BLGF Memorandum Circular No. 005.2018 dated 22 January 2018

b)    Brief Description:

LGUs interested in applying for loans from lending institutions to finance proposed projects are required to secure Certificate of Net Debt Service Ceiling and Borrowing Capacity (CNDSCBC), hereinafter referred to as Certificate, from the BLGF, except from those lending institution/s granted exemption by law such as the Municipal Development Fund Office (MDFO).

This process covers from receipt of application to validation of the accuracy of data and completeness of the documentary requirements, to computation of NDSCBC, and to the eventual issuance of a Certificate.

All provinces, cities, municipalities, and barangays may avail of this service but does not guarantee approval of loan nor facilitation of loan release.

For NCR LGUs, applications must be lodged to BLGF Central Office. For other LGUs, applications shall be submitted to their respective BLGF Regional Office.

c)     Availability of Service:

Monday to Friday from 8:00 AM to 5:00 PM except on holidays.

d)    Documentary Requirements:

1. Letter-request from the Local Chief Executive, stating the following:
   1. Selected lending institution
   2. Terms and conditions of the proposed loan
   3. Specific purpose of the loan
2. Certification by the Local Treasurer of absence or presence of loan/s
   1. Types of loan/s and other obligations contracted
   2. Purpose of loan/s and other obligations contracted
   3. Name of lending institution/s
   4. Date of approval and maturity of loans
   5. Terms and conditions
   6. Remaining balances of loan/s and other obligation/s
   7. Annual amortization schedules issued by the lending institution
3. Commission on Audit Annual Audit Certificate for the most recent year
   1. Year-end financial reports for the past three years
   2. Pre-closing trial balance (General Fund)
   3. Detailed Statement of Financial Performance
   4. Agency Action Plan and Status of Implementation (in case of adverse findings)
4. If applicable, Certification issued by the Lending Institution stating that it shall not require LGU deposits as compensating balance for the loan (if such lending institution is (1) not an authorized government depository bank or (2) an authorized government bank required to obtain the prior approval of the DOF)

e)     Period of Application/Lead Time Requirement/Prerequisites:

LGUs interested in applying for loans from lending institutions to finance proposed projects are required to secure a Certificate from the BLGF, except from those lending institution/s granted exemption by law such as the Municipal Development Fund Office (MDFO).

 

f)     Procedure:

	Activity	Duration	Responsible Person/Office
1	Receive and record application with supporting documents from Regional Office or from an NCR LGU.	15 minutes	Administrative Aide VI/ Loan Examiner II
2	·   Check completeness of submitted application. ·   Verify records for previous applications, if any.	4 hours	Administrative Aide VI/ Loan Examiner II
3	Prepare Acknowledgment Letter for complete application.	30 minutes	Administrative Aide VI/ Loan Examiner II
	For incomplete requirements, refer to Preparation of Notice of Deficiency sub-procedure.
4	Assign the request to an action officer.	1 hour	Fiscal Examiner V
5	Evaluate and process application. a.       For application from NCR, prepare Enclosures A, B and C. b.       For application from Regional Office, validate Financial Statements against Enclosures A, B and C. c.       Prepare Cost-Benefit Analysis if refinancing, buyout, or restructuring. d.       Prepare Debt Service Analysis if LGU about to reach Debt Service Ceiling. ·   Draft Transmittal Letter, the Certificate and cover Memorandum to LGU.	2 days	Action Officer (Loan Examiner II/ Loan Examiner III/ Loan Examiner IV)
6	Review processed application and endorse Transmittal Letter, the Certificate and cover Memorandum to LGU.	2 hour	Fiscal Examiner V/ Action Officer
7	Certify Enclosure C and affix initials to the Transmittal Letter, Certificate, and Memorandum to LGU.	30 minutes	Fiscal Examiner V
8	Record details of loan application to database, and to out-going logbook and forward the same for endorsement.	20 minutes	Administrative Aide VI/ Loan Examiner II
9	·   Review and approve computed borrowing capacity and sign Enclosure C. ·   Affix initials to Transmittal Letter, the Certificate, and cover Memorandum.	4 hours	Service Director  or Deputy Executive Director
10	Review and approve application and sign the Certificate, cover Memorandum, and Transmittal Letter.	Within 2 days	Executive Director
11	Record and transmit approved Certificate and signed cover Memorandum and Transmittal Letter.   (Refer to Release of Outgoing Documents procedure)	Within 1 day	Central Records-Administrative Aide II
	End of Procedure

 

g) Preparation of Notice of Deficiency (Sub-procedure)

	Activity	Duration	Responsible Person/Office
1	Prepare Notice of Deficiency and mark/note missing/absent  documentary requirement/s from the Checklist.	30 minutes	Administrative Aide VI/ Loan Examiner II
2	Review and endorse for signature the Notice of Deficiency.	1 hour	Fiscal Examiner V
3	Review and sign the Notice of Deficiency.	Within 1 day	Service Director/Deputy Executive Director
4	Record and transmit signed Notice of Deficiency.   (Refer to Release of Outgoing Documents procedure)	Within 1 day	Central Records- Administrative Aide II
	End of Procedure

 

h) Fees:

No fees shall be collected for this service.

i)    Type of Transaction:

Highly Technical Transaction – Requires fifteen (15) to twenty (20) days to complete the process.

j)    Additional Notes:

Templates, forms and other documentary requirements, and application procedure are available at the BLGF website (www.blgf.gov.ph).

List of Issued Certificates are updated every month and are downloadable.