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Cebu News

Cebu city for two years: More spending, less revenue

Caecent No-ot Magsumbol - The Freeman

CEBU, Philippines —  Cebu City is in a tight position with its finances after having spent more than the income it has generated for the past two years, the local finance committee (LFC) disclosed on Monday, August 8, 2022.

With less elbow room to wiggle around, it is now looking at disposing some government assets, on top of strengthening tax collection and rationalizing expenses.

Notably, the past two years were plagued by the COVID-19 pandemic starting in 2020 and the committee’s disclosure Monday was in line with Mayor Michael Rama’s intention to be transparent to residents about the city’s financial status.

In 2020 and 2021, the city spent over P10 billion. In 2020, it earned P8,730,467,421.31 but this decreased to P7,363,119,186.93 in 2021.

In 2021, the city has assets of over P33 billion, liabilities of over P17 billion, and equity of over P15 billion.

The financial performance report presented noted that sales from the South Road Properties were one of the sources of funds for CY 2020 and 2021 at P3,739,333,600 and P5,512,793,219.97, respectively.

By June 2022, the city was left with P4.5 billion as Rama assumed a fresh term as mayor. In the past two years, he served as vice mayor to the late Mayor Edgardo Labella who passed away in November 2021.

But the P4.5 billion is still less than the P8 billion worth of payables, the LFC said.

Recommendations

The LFC recommended that the city increase its tax collection, including in real property tax, business taxes, fees, and other charges. The committee said it has been years that no increase was made even if the city is allowed to do so.

Ordinances and contracts under joint venture agreements also have to be revisited, the LFC said, while the list of properties auctioned and sold to the city will have to be reviewed if those are viable to be offered for lease or sale.

Expenses also have to be rationalized, accordingly.

The LFC hopes that the city also revisits ordinances on the grant of financial aids and recommended for the city to cancel projects that have been unfunded since 2007. It is pushing for public-private partnerships on projects, including hospital operations.

Payments are expected to be prioritized and managed. The collection of advance payment of business taxes, especially from those engaging business in City Hall, is also highly encouraged.

And if needed, the LFC said government assets may have to be disposed of.

As the city heeds the call of the national government for right-sizing, the LFC recommended that job order personnel and those with casual status be recommended to private companies through job placements.

SRP

Meanwhile, the city’s earnings from lots at the SRP amounting to over P18 billion, as well as interest it supposedly earned in 2016, 2017, and 2018, have reportedly been used up.

Specifics on how the money was spent have not been disclosed.

Rama’s secretary, lawyer Collin Rosell, pointed out that the city would have saved about P1 billion if only the remaining amount to the city’s loan for the SRP was paid way before.

To avoid losing more money, Rama is bent on paying in full the SRP loan by the end of August 2022.

The people Rama trusted to look into the city’s finances are positive that the city can bounce back and move forward with the recommendations of the LFC.

They have assured that consultation would be made if the city decides to increase tax collection, among other measures. – JMO (FREEMAN)

REVENUE

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