City can’t close bank

CEBU, Philippines - The BDO Unibank Inc. has insisted it did not violate any laws that would merit the closure of its branch along Osmeña Boulevard, Cebu City.

The bank cited four reasons in its answer to the show cause notice issued by Mayor Tomas Osmeña.

The mayor ordered the bank on March 20 to explain why the city government should not close its Osmeña Boulevard branch for alleged "impossible and outrageous” declaration of gross income.

Branch manager Pelarina M. Del Rio l said the city cannot close their branch because of an existing preliminary injunction issued by the Regional Trial Court Branch 18 which prohibits the city government from shutting down any of its 28 branches in Cebu City.

In an order dated March 28, RTC Executive Judge Gilbert Moises said the court finds the application for writ of preliminary injunction “meritorious.”

Del Rio said local business taxes are levied based on gross receipts declared by the taxpayers which, according to her, is limited to those derived from interest, commissions, and discounts.

She also cited the Local Finance Circular Number 1-93 which excludes receipts from filing fees, service and other administrative charges and foreign exchange profits from being levied.

She said that the city's contention to include value of its gross receipts against employees' salaries, utility bills, rents, and overhead expenses is "erroneous and baseless."

BDO asserted that its declaration of its 2016 gross receipts in the amount of P6,986 is in consonance with the definition of the Local Government Code, City Ordinance No. 69 and other issuances.

Del Rio denied Osmeña's claim that the branch falsified its application for business permit to evade payment of correct taxes to the city.

She said it is impossible to do it since BDO's statements are subjected to an extensive audit being a publicly listed company.

"Due to the unjustified inaction on that application, BDO-Osmeña Boulevard's business permit is deemed automatically extended under Section 9 of Anti-Red Tape Act," part of the bank’s answer reads.

BDO said that the mayor's authority to order closure of business establishments is limited to the grounds provided in the City Ordinance No. 69.

Section 5 of the ordinance, according to BDO, does not warrant immediate closure of establishments for falsifying its application for a license or permit.

Citing the absence of legal basis, BDO concluded that the mayor cannot order its closure.

BDO also cited the Bureau of Local Government and Finance Memorandum Circular No 01-001-2017, which provides that in the case of underdeclaration, the local treasurer may examine the books of account of the establishments suspected of underdeclaring its gross receipts.

Osmeña earlier said he will not stop his fight against BDO branches despite the injunction order from the court.

The mayor said he will elevate the matter to the Supreme Court and even to the Office of the President, if necessary. —/FPL (FREEMAN)