The Philippines Department of Budget and Management (DBM) has generated savings worth 437.8m pesos (PHP), or nearly US$10m, by closing dormant and little-used bank accounts of national government agencies.
In a bid to improve government cash management, DBM installed a system called Treasury Single Account (TSA) that enables the government to consolidate its cash resources on a daily basis, said DBM’s secretary Florencio Abad. As a result of the improved visibility, DBM had closed 266 dormant bank accounts by the end of 2013.
Before this, the government was incurring debt to address perceived cash shortages as cash was lying in many bank accounts and hidden from the Treasury’s view due to its fragmented cash management system, said Abad.
“Once [the system] is fully set in place, the TSA will provide the government with a full view of its cash resources on a daily basis, and enable us to ‘sweep up’ dormant cash to fund upcoming payables. The PHP437.8m that we recently saved is much smaller than the billions that we can further save from borrowings and money handling costs,” he added.
Abad said that the TSA is among the key projects under the Philippine Public Financial Management Reform Roadmap, for improving transparency, accountability, and efficiency in the management of public funds.
“The Aquino administration is working hard to transform Philippine public financial management. Through game-changing reforms such as the TSA, we’re making sure that government spends within its means, on the right priorities, and with measurable results,” he added.
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