Letter of Credit (LC)for Foreign Goods

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Letter of Credit (LC)for Foreign Goods

Post by riddler on Thu Jan 28, 2010 8:29 am

hello. we are planning to procure a brand new (backhoe)heavy equipment this month, however our LGU were advised by the prospective domestic supplier to secure a Letter of Credit after the bidding, to reduced the cost of the heavy equipment because of tax exemption. may i be enlightened of the steps on how to secure this LC? salamat. Very Happy
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Thu Jan 28, 2010 9:27 pm

Hi Ruel, let me share our experience as a gocc on foreign procurements. Initially we secure (meaning, meron authorized signatory sa application) Import Permit from the Bureau of Imports Services (BIS-DTI) requiring the Abstract of Bids and Notice of Award. This Permit is required by the LandBank (depository bank namin) where we secure L/C (meaning, meron ding authorized signatory sa application). Also needed at LBP is the original Pro-Forma Invoice from the foreign supplier as their basis to compute charges including a buffer amount kasi the actual cost will be the forex rate when the goods arrive at Customs. We get L/C 'at sight', meaning LBP actually pays the goods when the shipping documents are presented by the supplier... Meron application forms lahat yan at BIS and LBP... Delivery from abroad is usually CIF-Manila (cost, insurance, freight) so pagdating we pay for Customs duties, taxes, and charges. Tax exempt nga yata LGU..L/C to reduce cost? You mean direct procurement abroad kasi? i hope this helps.
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Re: Letter of Credit (LC)for Foreign Goods

Post by riddler on Fri Jan 29, 2010 5:40 am

thanks jester, me konti tanong lang sa ako 'yo. Very Happy

jester81 wrote:Hi Ruel, let me share our experience as a gocc on foreign procurements. Initially we secure (meaning, meron authorized signatory sa application) Import Permit from the Bureau of Imports Services (BIS-DTI) requiring the Abstract of Bids and Notice of Award. .

I cannot find the LC discussion in the PBD for foreign supplies execept nakakalitong acronyms in GCC SEc. 15.3 like the "Ex works", "CIF", "CIP", "DDP", "INCOTERMS", dito naman sa SCC Clause 6.2 eh merong "FOB", "FCA", ano ba ito? Very Happy

how can we insert it as a provision/requirement for the Procuring Entity to be provided, like the LC?

If it is DDP, would it necessarily mean that the winning bidder shall take care of the LC, but not the Pprocuring Entity?

jester81 wrote:
This Permit is required by the LandBank (depository bank namin) where we secure L/C (meaning, meron ding authorized signatory sa application). Also needed at LBP is the original Pro-Forma Invoice from the foreign supplier as their basis to compute charges including a buffer amount kasi the actual cost will be the forex rate when the goods arrive at Customs. We get L/C 'at sight', meaning LBP actually pays the goods when the shipping documents are presented by the supplier... Meron application forms lahat yan at BIS and LBP... Delivery from abroad is usually CIF-Manila (cost, insurance, freight) so pagdating we pay for Customs duties, taxes, and charges.

Tax exempt nga yata LGU..L/C to reduce cost? You mean direct procurement abroad kasi? i hope this helps.

If this foreign goods (heavy equipments) is a TAx exempt for LGU's (which i think it is), why would the bidder advised us to secure an LC in our favor?

ang understanding ko kasi na pag may nag bid (foreign or domestic supplier) wala na kaming babayaran (LGU) except the Bid Amount less witholding taxes.

kung ippapasok pa namin ang LC sa PBD at LGU lang din mag po-provide eh baka magkkagulo ang dokumento ng PBD (sa palagay ko). notwithstanding the ABC Very Happy Very Happy

well, anyway i do get a lot of thoughts from you jester, now i have a good start. thnks pare. Very Happy
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Fri Jan 29, 2010 7:41 am

Get the incoterms 2000 file from the net, you should see the comparisons among the shipment modes... its the PE who will secure the LC, not the bidder kasi the intention is for the PE to pay the winning bidder. usually a foreign supplier will require payment in LC form. Note that your ABC may be in pesos, but in the bidding you should require the quotes in US$; use the forex rate at the day of opening (Bangko Sentral website)... supplier issues an ORIGINAL proforma invoice to the PE na ibibigay mo sa Bank, pag me advise na of 'cleared' LC payment from your bank (eg, kami sa LBP) to the supplier's bank (indicated sa proforma invoice), then they will ship the goods... DDP? Delivered Duties Paid means supplier pays pati duties pagdating sa Customs? Usually your agency will pay for Customs duties pagdating goods or DDU, Delivered Duties Unpaid...wala dapat gulo sa PBD yan kasi nasa payment stage na...
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Fri Jan 29, 2010 7:49 am

Btw, the incoterm you should require in the bid specs, eg. Supply & Delivery DDP-Manila of <Goods>; the L/C is secured by the PE in favor of the Supplier kasi payment for them... Ruel, i can mail you BIS Import Permit, Incoterms if you want?
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Re: Letter of Credit (LC)for Foreign Goods

Post by Mikel on Fri Jan 29, 2010 10:05 am

If I were to give an unsolicited advise to sir ruel, it would be better not to heed the advice of the supplier that your LGU should issue a letter of credit, as it is a very complicated process.

Please take note of the requirements in Sec. 42.5 of the IRR. With due respect to sir jester, an ‘at sight’ letter of credit is violative of the said provision. If my understanding is right, an ‘at sight’ LC means that once the foreign supplier gets ‘hold’ of the LC, the responding bank (if different from the issuing bank) is obliged to pay the former whether or not the goods had been delivered and accepted by the PE as required in the aforementioned provision of law.

This procedure is what we call ‘niluluto tayo ng sarili nating mantika.’ In the event that the PE will issue an LC, what will be the cash outlay of the winning bidder (usually a local supplier)? It is an anomalous practice wherein the winning bidder is a local supplier while the PE will issue an LC in favor of a foreign supplier not a party to the bidding. It would be best that you conduct the bidding and award the contract to the winning supplier at let the supplier have the problem of importing the item.

If I may ask sir ruel, is this a loan?

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Letter of Credit

Post by charlie brown on Fri Jan 29, 2010 10:22 am

Hi Ruel,

I would like also to share my thoughts on the use of the LC. In sec. 42.5 of the IRR the PE may issue LC in favor of local or foreign supplier. for foreign suppliers, especially those who are not registered in the phils the LC is the only method of payment as it would be difficult if not impossible on their part to negotiate our local check in their own country. Besides the LC is also a form of guarantee that they will be paid and paid promptly once the goods are already delivered and accepted. For local suppliers selling imported goods LC is also allowed (u may check gppb res 020-2005).

I am not very sure if LGUs are automatically given exemption in regard to importation but i do know that an agency will have to apply for an excemption from import duties from the BOC. If the PE intends to avail of this excemption it would be wise if this is done during the procurement planning stage as it has an impact on the ABC. Goods supplied by foreign entities are to be delivered DDP which means that all duties, taxes and transporation costs including insurance are paid for by the supplier.

GPPB Res 020-2005 could guide you in the determination of the ABC including the provision of a lump-sum amount for FOREX and where this should be placed in the bidding docs. Hope i was able to help. Good Luck.
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Re: Letter of Credit (LC)for Foreign Goods

Post by riddler on Fri Jan 29, 2010 10:27 am

Mikel wrote:If I were to give an unsolicited advise to sir ruel, it would be better not to heed the advice of the supplier that your LGU should issue a letter of credit, as it is a very complicated process.

Please take note of the requirements in Sec. 42.5 of the IRR. With due respect to sir jester, an ‘at sight’ letter of credit is violative of the said provision. If my understanding is right, an ‘at sight’ LC means that once the foreign supplier gets ‘hold’ of the LC, the responding bank (if different from the issuing bank) is obliged to pay the former whether or not the goods had been delivered and accepted by the PE as required in the aforementioned provision of law.

This procedure is what we call ‘niluluto tayo ng sarili nating mantika.’ In the event that the PE will issue an LC, what will be the cash outlay of the winning bidder (usually a local supplier)? It is an anomalous practice wherein the winning bidder is a local supplier while the PE will issue an LC in favor of a foreign supplier not a party to the bidding. It would be best that you conduct the bidding and award the contract to the winning supplier at let the supplier have the problem of importing the item.

If I may ask sir ruel, is this a loan?

Hello mikel, 'good to hear from you. Very Happy
This is not a Loan Mikel, but our Local Fund under the LGU's General Fund. Very Happy Very Happy 'seems that your're right mikel.. i was just lookin' for some ways na makatipid kmi as advised by the supplier na kami ang mag secure ng LC.. Commpetitive Bidding din ang proposal ng BAC dito. Very Happy

For jester, I would appreciate it if you could send me through this forum (private message) the BIS Import permit and Incoterms, so our BAC-TWG can evaluate documents to be used during our bidding. Very Happy
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Re: Letter of Credit (LC)for Foreign Goods

Post by riddler on Fri Jan 29, 2010 10:29 am

charlie brown wrote:Hi Ruel,

I would like also to share my thoughts on the use of the LC. In sec. 42.5 of the IRR the PE may issue LC in favor of local or foreign supplier. for foreign suppliers, especially those who are not registered in the phils the LC is the only method of payment as it would be difficult if not impossible on their part to negotiate our local check in their own country. Besides the LC is also a form of guarantee that they will be paid and paid promptly once the goods are already delivered and accepted. For local suppliers selling imported goods LC is also allowed (u may check gppb res 020-2005).

I am not very sure if LGUs are automatically given exemption in regard to importation but i do know that an agency will have to apply for an excemption from import duties from the BOC. If the PE intends to avail of this excemption it would be wise if this is done during the procurement planning stage as it has an impact on the ABC. Goods supplied by foreign entities are to be delivered DDP which means that all duties, taxes and transporation costs including insurance are paid for by the supplier.

GPPB Res 020-2005 could guide you in the determination of the ABC including the provision of a lump-sum amount for FOREX and where this should be placed in the bidding docs. Hope i was able to help. Good Luck.

Thank you very much charlie brown. Very Happy Very Happy
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Sat Jan 30, 2010 10:05 am

Hi CharlieBrown, very good info there... allowed pala up to 10% forex spike ...the gppb resol 020-2005 refers to 'any foreign currency'. Has this been improved in the PBD which refers to US$ as the only(?) foreign currency? We have a supplier from Italy for a machine part and they insist on the euro... Also, foreign suppliers (meaning, there is no local distributor to get bids from) are averse of local duties and taxes and they will rather deliver DDU or usually CIF and us the PE handle the Customs end- is this acceptable? Thanks, sir!
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Sat Jan 30, 2010 10:46 am

Hi Mikel, ... thanks for the Sec 42.5 reminder... we resort to foreign procurements only if there are no local suppliers/distributors who can be invited to bid...usually the foreign supplier has a local agent for the paper trail lang; if none, they communicate via the net, and they are usually wary of bidding procedures...with 'at sight', the confirmed LC will only be paid by our Bank upon presentation by foreign supplier of the shipping documents to the Bank (which still gets our clearance to proceed with the payment)... if there are local suppliers, we go thru the usual bidding, even if the item is known to come only from abroad... thanks po!
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Re: Letter of Credit (LC)for Foreign Goods

Post by sunriser431 on Sun Jan 31, 2010 5:06 pm

Section 1V General Condition of Contract for PBD for Goods
8. Procuring Entity’s Responsibilities
8.1.Whenever the performance of the obligations in this Contract requires that the Supplier obtain permits, approvals, import, and other licenses from local public authorities, the Procuring Entity shall, if so needed by the Supplier, make its best effort to assist the Supplier in complying with such requirements in a timely and expeditious manner.
Meanwhile GPRA
Section 42. Contract Implementation xxxx
42.1 xxxx
42.5. Procuring Entities may issue a letter of credit in favor of a local or foreign suppliers; Provided, that, no payment on the letter of credit shall be made until delivery and acceptance of the goods as certified to by the procuring entity in accordance with the delivery schedule provided for in the contract have been concluded; Provided further, that, the cost for the opening of letter of credit shall be for the account of the local or foreign supplier and must be stated in the Bidding Documents.

In reference to the underline text, maybe it has something to do with the prohibition of no advance payment as provided for in the PD 1445. meanwhile the GCC of the PBD, also make it clear that PE will only provide assistance in complying such requirements if so needed. any other comment are welcome bounce
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Re: Letter of Credit (LC)for Foreign Goods

Post by charlie brown on Mon Feb 01, 2010 5:46 pm

jester81 wrote:Hi CharlieBrown, very good info there... allowed pala up to 10% forex spike ...the gppb resol 020-2005 refers to 'any foreign currency'. Has this been improved in the PBD which refers to US$ as the only(?) foreign currency? We have a supplier from Italy for a machine part and they insist on the euro... Also, foreign suppliers (meaning, there is no local distributor to get bids from) are averse of local duties and taxes and they will rather deliver DDU or usually CIF and us the PE handle the Customs end- is this acceptable? Thanks, sir!

Hi jester,

It would seem like dalawa lang ang currency options under the BDS (16.1) USD and Phil Peso. Your supplier will have to choose. Also very specific ang bid docs regarding the use of the DDP for foreign suppliers
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Re: Letter of Credit (LC)for Foreign Goods

Post by riddler on Tue Feb 02, 2010 8:41 am

charlie brown wrote:
jester81 wrote:Hi CharlieBrown, very good info there... allowed pala up to 10% forex spike ...the gppb resol 020-2005 refers to 'any foreign currency'. Has this been improved in the PBD which refers to US$ as the only(?) foreign currency? We have a supplier from Italy for a machine part and they insist on the euro... Also, foreign suppliers (meaning, there is no local distributor to get bids from) are averse of local duties and taxes and they will rather deliver DDU or usually CIF and us the PE handle the Customs end- is this acceptable? Thanks, sir!

Hi jester,

It would seem like dalawa lang ang currency options under the BDS (16.1) USD and Phil Peso. Your supplier will have to choose. Also very specific ang bid docs regarding the use of the DDP for foreign suppliers


here is the excerpt in the ITB of the PBD,

16. Bid Currencies

16.1. Prices shall be quoted in the following currencies:

(a) For Goods that the Bidder will supply from within the Philippines, the prices shall be quoted in Philippine Pesos.
(b) For Goods that the Bidder will supply from outside the Philippines, the prices may be quoted in the currency(ies) stated in the BDS. However, for purposes of bid evaluation, bids denominated in foreign currencies shall be converted to Philippine currency based on the exchange rate as published in the BSP reference rate bulletin on the day of the bid opening.

16.2. If so allowed in accordance with ITB Clause 16.1, the Procuring Entity for purposes of bid evaluation and comparing the bid prices will convert the amounts in various currencies in which the bid price is expressed to Philippine Pesos at the foregoing exchange rates.
16.3. Unless otherwise specified in the BDS, payment of the contract price shall be made in Philippine Pesos.

i think any foreign denomination will do charliebrown. Sec. 16.1(b) is silent on the USD denomination. maybe stable ang Euro kesa dollar kaya some suppliers opted to use the euro.
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Tue Feb 02, 2010 9:34 am

Hi Ruel... 16.1 (b) of the ITB refers to 'foreign currencies' but the BDS limits option to either Php or USD lang, we cannot add any option there di ba? CharliBrown, on the DDP mode, ITB15.4 provides the option 'Otherwise stated in the BDS'...and the BDS has '...or the applicable INCOTERM for this Project'... Actually, our predicament here is that foreign suppliers, at least in our experience needing machine parts/spare or items available only from abroad (processing plant po kami), are wary of govt procurement kasi sila daw ay used to just fax/email quotations ma close na nila business with private entities anywhere else around the world... thus, usually hihingan ka D/P (na bawal), or ex-works (tantamount to D/P din yan as fabrication wont start until we pay with LC), even FOB (deliver nila sa port bahala na buyer to ship out to Manila)...the most foreign supplier can agree to is 100% confirmed LC payment for a CIF delivery (supplier insures item, pakarga sa barko for Manila, risk we bear)...ok pag makuha mo DDU (risk with supplier, deliver nila Manila, kami maglabas Customs), but we have not gotten any supplier to agree to a DDP (supplier delivers to Manila sila pa magbayad Customs) as they dont have local agents to clear the item with our Customs... I believe nasa PE yan (BAC and HOPE) to see to it that govt money is not wasted and procurement is secured (insured) in transit... comment po pls? salamat.
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Re: Letter of Credit (LC)for Foreign Goods

Post by charlie brown on Tue Feb 02, 2010 11:26 am

jester81 wrote:Hi Ruel... 16.1 (b) of the ITB refers to 'foreign currencies' but the BDS limits option to either Php or USD lang, we cannot add any option there di ba? CharliBrown, on the DDP mode, ITB15.4 provides the option 'Otherwise stated in the BDS'...and the BDS has '...or the applicable INCOTERM for this Project'... Actually, our predicament here is that foreign suppliers, at least in our experience needing machine parts/spare or items available only from abroad (processing plant po kami), are wary of govt procurement kasi sila daw ay used to just fax/email quotations ma close na nila business with private entities anywhere else around the world... thus, usually hihingan ka D/P (na bawal), or ex-works (tantamount to D/P din yan as fabrication wont start until we pay with LC), even FOB (deliver nila sa port bahala na buyer to ship out to Manila)...the most foreign supplier can agree to is 100% confirmed LC payment for a CIF delivery (supplier insures item, pakarga sa barko for Manila, risk we bear)...ok pag makuha mo DDU (risk with supplier, deliver nila Manila, kami maglabas Customs), but we have not gotten any supplier to agree to a DDP (supplier delivers to Manila sila pa magbayad Customs) as they dont have local agents to clear the item with our Customs... I believe nasa PE yan (BAC and HOPE) to see to it that govt money is not wasted and procurement is secured (insured) in transit... comment po pls? salamat.

Actually your experience jester is not uncommon for PEs dealing with foreign suppliers. mas madali nga naman pag private. The problem becomes worse if its a sellers market and our government does not have a very high standing among their buyers Crying or Very sad A suggestion is to try to get a local supplier to deal with the foreign supplier/manufacturer so you dont have to worry about the delivery terms. If you are lucky, you might even not have to worry about forex or bids in USD. kaya lang it will increase the cost dahil kikita pa yong local supplier. so far thats the only remedy i could think of. good luck
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Re: Letter of Credit (LC)for Foreign Goods

Post by riddler on Tue Feb 02, 2010 11:27 am

jester81 wrote:Hi Ruel... 16.1 (b) of the ITB refers to 'foreign currencies' but the BDS limits option to either Php or USD lang, we cannot add any option there di ba? CharliBrown, on the DDP mode, ITB15.4 provides the option 'Otherwise stated in the BDS'...and the BDS has '...or the applicable INCOTERM for this Project'... Actually, our predicament here is that foreign suppliers, at least in our experience needing machine parts/spare or items available only from abroad (processing plant po kami), are wary of govt procurement kasi sila daw ay used to just fax/email quotations ma close na nila business with private entities anywhere else around the world... thus, usually hihingan ka D/P (na bawal), or ex-works (tantamount to D/P din yan as fabrication wont start until we pay with LC), even FOB (deliver nila sa port bahala na buyer to ship out to Manila)...the most foreign supplier can agree to is 100% confirmed LC payment for a CIF delivery (supplier insures item, pakarga sa barko for Manila, risk we bear)...ok pag makuha mo DDU (risk with supplier, deliver nila Manila, kami maglabas Customs), but we have not gotten any supplier to agree to a DDP (supplier delivers to Manila sila pa magbayad Customs) as they dont have local agents to clear the item with our Customs... I believe nasa PE yan (BAC and HOPE) to see to it that govt money is not wasted and procurement is secured (insured) in transit... comment po pls? salamat.

hi too charlie, buti ka pa you have a vast knowldge in the "goobledygook" of the process lalo na sa procurement of foreign goods. i think you can still amend the content of the BDS in relation to Section 16 of the ITB, re:" foreign currencies", coz pwd naman i-amend yung BDS as instructed in its preface. (kindly see the original text of the PBD). Very Happy

p.s. ano ba tong acronym na FOB at DDU ? confused
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Re: Letter of Credit (LC)for Foreign Goods

Post by charlie brown on Tue Feb 02, 2010 12:09 pm

ruel wrote:
jester81 wrote:Hi Ruel... 16.1 (b) of the ITB refers to 'foreign currencies' but the BDS limits option to either Php or USD lang, we cannot add any option there di ba? CharliBrown, on the DDP mode, ITB15.4 provides the option 'Otherwise stated in the BDS'...and the BDS has '...or the applicable INCOTERM for this Project'... Actually, our predicament here is that foreign suppliers, at least in our experience needing machine parts/spare or items available only from abroad (processing plant po kami), are wary of govt procurement kasi sila daw ay used to just fax/email quotations ma close na nila business with private entities anywhere else around the world... thus, usually hihingan ka D/P (na bawal), or ex-works (tantamount to D/P din yan as fabrication wont start until we pay with LC), even FOB (deliver nila sa port bahala na buyer to ship out to Manila)...the most foreign supplier can agree to is 100% confirmed LC payment for a CIF delivery (supplier insures item, pakarga sa barko for Manila, risk we bear)...ok pag makuha mo DDU (risk with supplier, deliver nila Manila, kami maglabas Customs), but we have not gotten any supplier to agree to a DDP (supplier delivers to Manila sila pa magbayad Customs) as they dont have local agents to clear the item with our Customs... I believe nasa PE yan (BAC and HOPE) to see to it that govt money is not wasted and procurement is secured (insured) in transit... comment po pls? salamat.

hi too charlie, buti ka pa you have a vast knowldge in the "goobledygook" of the process lalo na sa procurement of foreign goods. i think you can still amend the content of the BDS in relation to Section 16 of the ITB, re:" foreign currencies", coz pwd naman i-amend yung BDS as instructed in its preface. (kindly see the original text of the PBD). Very Happy

FOB means free on board. there is delivery when the goods pass the ships rail at the port of shipment. Transport costs and risks passes on to the buyer after that point. DDU means delivered duty unpaid. Goods are not cleared for import and not unloaded - thus responsibility of the buyer. For details you may check the Incoterms andoon lahat ng delivery terms.

As to the BDS, yup u may edit (fill in the blanks, delete some paragraphs) for purposes of amending or supplementing the ITB. However, you cannot add what is not included as an option especially if the options are all laid out, meaning pipili ka na lang.

p.s. ano ba tong acronym na FOB at DDU ? confused
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Re: Letter of Credit (LC)for Foreign Goods

Post by jesteR on Tue Feb 02, 2010 1:24 pm

Sigh...hehe tnx anyway, CharlieBrown, seller's market nga in this industry we are in, no known local distributors. salamat ulit...Hi EngrRuel, I agree Php or US$ lang option sa BDS...why complicate with other foreign currencies na di naman universally used like the euro di ba?
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Re: Letter of Credit (LC)for Foreign Goods

Post by tagailoilo on Thu Jun 09, 2011 10:31 am

in cases of foreign supplier w/ letter of credit, mandatory ba na dpat may DV yung LC pag nagbayad na sa supplier?

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Re: Letter of Credit (LC)for Foreign Goods

Post by Agatha520 on Mon Jun 27, 2011 11:35 am

I agree with your opinion.










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Re: Letter of Credit (LC)for Foreign Goods

Post by cuteangels on Tue Mar 25, 2014 1:17 am

Hello to all! I just would like to participate in your discussion considering that I also encountered in one of my audited agencies, the same condition/situation , particularly, the one mentioned by riddler that the PE will issue an LC in favor of a foreign supplier who is not a party to the bidding. As stated, it is an anomalous practice, which i also think it is. Can you cite of a particular regulation that was violated making this practice anomalous?

I have here an excerpt from the ITB in the procurement of Heavy Equipment for you to give comments:

V. Payment

    "In consideration for the supply and delivery of the Heavy Equipments as provided herein, the Municipality shall pay the bidder the contract price via irrevocable letter of credit to be issued by the Municipality.  It is hereby agreed and understood that for the purpose of the supply and delivery of Heavy Equipments, it must be directly imported for the Municipality to avail itself of the exemption from import duties and local taxes provided under Section 382 of the Local Government Code of 1991.  For this purpose, the Municipal Council of the Municipality shall authorize the Municipal Mayor to apply or cause the application for the issuance of an irrevocable letter of credit in payment for the direct importation of the equipment. The end-user of the project shall coordinate with the Municipality Council for the necessary issuance of the authority.

    The bidder, on the other hand, shall provide assistance to the Municipality for the application and approval of the relevant tax exemption by the Department of Finance."

FYI: The Municipality conducted a public bidding. 3 suppliers (all local) submitted their bids, and only 1 qualified. Letter of Credit was already issued in favor of a foreign supplier, not a party to the bidding.

I am confused.  Why the municipality still have to do the importation when the contract was already awarded to a local supplier? Question  Please help me clarify the issue. Thanks in advance. Very Happy 

cuteangels
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Re: Letter of Credit (LC)for Foreign Goods

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