CEZA flagged over P148 million uncollected obligations

MANILA, Philippines — The Commission on Audit (COA) has urged the state-owned Cagayan Economic Zone Authority (CEZA) to collect P148 million in overdue financial obligations from gaming and business firms operating at the Cagayan Freeport.

In its annual audit report on CEZA, the COA noted that as of December 2020, the agency had outstanding receivables from seven firms amounting to P157 million.

State auditors noted the amount significantly increased from P92.7 million in 2019.

The audit body said 94.33 percent or P148 million was overdue by a month to over 10 years.

“The uncollected obligations deprived the CEZA of funds that could have been used in its operations,” the COA report read.

Records showed that CEZA’s major gaming licensee, First Cagayan Leisure and Resort Corp. (FCLRC), had the largest unpaid obligations with P149.7 million.

Of the amount, P142 million was overdue by a month to more than a year.

“FCLRC’s obligations included unpaid rental fees from September 2019 to December 2020 amounting to P10 million,” the COA said.

Aside from the FCLRC, the Cagayan Welfare Export and Import Corp. had the next highest unpaid obligations with P4.3 million.

The amount represented unpaid rental fees from January to December 2020.

Another gaming licensee, the North Cagayan Gaming & Amusement Corp., owed CEZA P1.3 million, representing the economic zone’s share in the firm’s land-based gaming operations, the audit body said.

State auditors noted that CEZA’s finance division regularly sends demand letters to the debtors, but the receivables remained uncollected.

“We recommend that CEZA intensify its collection strategies to maximize fund utilization for other programs or projects,” the COA said.