The Philippines Department of Budget and Management (DBM) has generated savings worth P437.8 million (US$9.82 million) by closing dormant and unnecessary bank accounts of national government agencies.

In a bid to improve government cash management, DBM has installed a new system called Treasury Single Account that enables the Government to consolidate its cash resources on a daily basis, said DBM’s Secretary Florencio Abad (pictured).

As a result of the improved visibility, DBM has shut down 266 dormant bank accounts as of 31 December last year.

Before the implementation of this system, the Government was incurring debt to address perceived cash shortages because the cash was lying in many bank accounts and hidden from the Treasury’s view due to its fragmented cash management system, explained Abad.

“Once [the system] is fully set in place, the Treasury Single Account 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 P437.8 million (US$9.82 million) that we recently saved is much smaller than the billions that we can further save from borrowings and money handling costs,” he said.

Abad further noted that the Treasury Single Account is among the key projects under the Philippine Public Financial Management Reform Roadmap, which seeks to enhance 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 Treasury Single Account, we’re making sure that government spends within its means, on the right priorities, and with measurable results,” he added.

Dormant accounts refer to collections deposited in Authorised Government Depository Banks (AGDBs) but have remained inactive for more than five years. Previous reports by the Commission on Audit (CoA) have pointed out that dormant accounts form part of the huge cash balances being maintained by government agencies in AGDBs and other institutions. CoA will soon issue guidelines and procedures for the transfer of the P437.8 million-worth of savings from all the dormant bank accounts to the Government’s General Fund.

DBM Undersecretary and CIO Richard Moya explained that the Treasury Single Account requires a complete inventory of existing bank accounts of government agencies, along with the closure of dormant ones. At present, the Bureau of Treasury (BTr) is still completing the inventory of said bank accounts.

“The Treasury Single Account is one of the core elements of the Government Integrated Financial Management Information System or GIFMIS, a government-wide ICT solution that will provide accurate and real-time information on government’s finances. This will span the whole financial management process—from budget preparation and programming, to fund release and accountability reporting,” Moya said.