By Charissa Luci-Atienza “The current provisions of the Local Government Code of 1991 on credit financing and securing other sources of funding are very delimiting and prevent exploration of private capital markets.” Bohol 1st District Rep. Edgar Chatto stressed this in a bill he filed that seeks to amend the country’s Local Government Code to rationalize credit financing for local government units (LGUs). House of the Representatives (Manila Bulletin File Photo) House Bill No. 6879 seeks to amend certain provisions in Book II of Republic Act. No. 7160, the Local Government Code of 1991. He said the LGUs should be given leeway to source out their much-needed funds for the implementation of their development projects. Quoting the National Tax Research Center, Chatto said for the LGUs to become effective and efficient partners of the national government, they should be provided with sufficient latitude and the opportunity to utilize their authority as public corporations. “The proposed measure seeks to amend the Local Government Code to allow the LGUs to open depositary accounts not only with government-owned banks and financial intermediaries but allows for ventures with private institutions as well subject to safeguards as may be put in place by the Bangko Sentral ng Pilipinas (BSP),” Chatto said. “This will give the LGUs the needed flexibility and options in sourcing out needed funds for local development projects,” he added. HB 6879 provides that any LGU may avail itself of loans, credits, and other forms of indebtedness from government or private banks and lending institutions, subject to the requirements specified under the Code and to regulations that the BSP may promulgate. Under the bill, the local treasurer shall maintain depository accounts in the name of their respective LGUs with banks, located in or nearest to their respective areas of jurisdiction. “Earnings of each depository account shall accrue exclusively thereto,” the measure said.