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Treasury Circular No. 01-2014 dated May 20, 2014

What is this Circular for?

Treasury Circular No. 01-2014 was issued by the Bureau of the Treasury (BTr) in 2014 to provide National Government Agencies (NGAs) with the guidelines in the re-order or purchase of Modified Disbursement System (MDS).

What is Modified Disbursement System (MDS)?

Modified Disbursement System (MDS) is a disbursement system implemented to facilitate effective cash management of the national government’s cash resources whereby NGAs/BTr for GOCCs and LGUs settle their payables either through the issuance of checks or direct credit to the bank account of the supplier/contractor/consultant, chargeable against the account of the Treasurer of the Philippines (TOP) BTr being maintained with Government Servicing Banks (GSBs). 

Source: Department of Budget and Management

To whom this Circular is useful for?

This Circular is useful for the following government officials and employees in the effective discharge of their respective functions:

Heads of Agencies
Chief Accountants
Treasury Regional Directors
Treasury Provincial Heads
Head of MDS Government Servicing Banks (i.e., LBP, DBP, PVB, etc.)
All others concerned

Why was this Circular issued by BTr?

This Circular was issued by the BTr for the following purposes:

Promote the use of Authority to Debit Account (ADA) as mode of disbursement in the national government; and
To minimize the volume of outstanding checks resulting in a more predictable cash outflows in the BTr

What’s in the Circular?

The following are important points we took note of from the Circular:

NGAs need prior clearance from BTr before they can re-order or purchase MDS checks from the authorized government servicing banks (AGSB)
Certain documents are needed to be submitted to the BTr to support the request (see photo below). You can view these documents here.
The BTr shall review the request and shall issue appropriate authority to the government agency and notice to the MDS GSB concerned.