BSP TAKES OVER P152-M CASH MANAGEMENT CENTER
MANILA, NOVEMBER 12, 2007 (STAR) By Des Ferriols - The Bangko Sentral ng Pilipinas (BSP) will take over the P152-million Cash Management Center (CMC) that was supposed to be privately operated by the Bankers Association of the Philippines (BAP).
The BSP decision was made following the controversy over the propriety of allowing the private sector to take over the cash distribution function of the BSP.
According to BSP Deputy Governor Armando Suratos, however, the BSP has decided it would take over the CMC “as soon as possible” and the BAP will not be reimbursed for the equipment it has already purchased for the center.
Suratos, who is in charge of the BSP’s resource management sector, told reporters that the CMC will henceforth be ran by the BSP. “There are no problems,” he added.
The construction of the actual CMC was funded by the BSP and it was supposed to be operated by the BAP which has already acquired two cash sorting machines that would be used by the CMC for its operations.
However, the Commission on Audit (COA) opposed the idea of allowing the BAP to operate the CMC, ruling that public funds could not be used for private use, in this case by the BAP.
The COA also ruled that the BSP could not delegate its cash distribution functions to the private sector.
According to a source from the BSP who declined to be identified because of policies, the Monetary Board (MB) decided to continue with the construction of the CMC structure since it has already bid out the contracts.
“We feared we might be sued by the private contractors so we finished the construction and decided we will just take over the center,” the source said. “That essentially takes the BAP out of the picture.”
According to the source, the BSP will now have to sort out what to do with the machines already acquired by the BAP since they could not be directly acquired by the BSP.
Under government procurement laws, the BSP is required to bid out the acquisition of any equipment it would require in order to get the best possible price.
According to the source, the operation of the CMC was “in limbo” but the BSP was ready to take over once all the legal question has been sorted out.
The CMC was originally proposed by the BAP itself in 1998. The center was intended to distribute currencies to banks, eliminating huge transport expenses since individual banks would no longer need to maintain their own armored car fleet.
The BSP would also no longer have to maintain its own fleet since the CMC would be handing cash distribution, shipping bank notes and coins from the Security Plant Center in Quezon City to the BSP head office in Manila.
The CMC would also facilitate the replacement of unfit banknotes, culling them using modern equipment that would automatically detect and eliminate them from the system.
Allowing the BAP to take over the cash distribution function of the BSP, however, has made government policy markets edgy, saying that it would dilute the power, authority and accountability of the BSP over cash management.
The BSP, on the other hand, said that the rationalization of cash processing that involve the private sector was already being implemented in other countries, such as France, Sweden, Hong Kong, Australia and Singapore.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2007
by PHILIPPINE HEADLINE NEWS ONLINE
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