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Friday, July 28, 2006
Cebu City debt soars to P5.96B
By Rene H. Martel Sun.Star Staff Reporter
Although Cebu City amassed more millions in 2005, its liabilities also soared by the billions.
Last year, the City Government earned P1.914 billion or 15.76 percent more than the P1.654 billion made the previous year.
The increase, the Commission on Audit (COA) said, was a result of the “extensive collection drive” of the City Treasurer’s Office.
Minus expenses amounting to P1.407 billion, City Hall earned a net income of P511 million, or 90 percent more than the P243 million it made in 2004.
The bulk of the income was from local taxes at P918.597 million; other income, P703.8934 million; business income, P128.151 million; service income, P113.41 million; permits and licenses, P48.921 million; and national taxes, P1.47 million.
Other income includes dues from persons, groups, and other funds, subsidies, grants and donations.
State auditors also noted a slight increase in expenses, from P1.363 billion in 2004 to P1.407 billion last year.
Mayor Tomas Osmeña, in an earlier interview, said Cebu City has a massive collection effort because it has many accounts to collect.
He even dismissed last March a report by the Bureau of Local Government Finance 7 that Cebu City only ranks third in revenue collection among local government units (LGUs) in Region 7 in 2005.
He said basing efficiency on an LGU’s target collection is “useless.” He’d rather compare figures for a current year with that of the prior year.
“So, let’s say this is your target. If you want to be number one, then just make your target lower. This is how irrelevant government is. I’d like to brag, ‘We’re number one but we’re not.’ It’s best to look at whether there’s an increase in our collections in the previous year, so that’s one,” he had said.
Even though City Hall failed to trim its expenses, its total assets increased by P2.317 billion.
From P7.701 billion in 2004, assets rose to P10.019 billion last year.
Most notable was land and land improvements that rose from P3.581 billion to P5.856 billion, particularly the 295-hectare South Road Properties (SRP).
City Hall, however, cannot gloat over the figure because its debts soared from P3.86 billion in 2004 to P5.958 billion in 2005.
Its long-term liabilities ballooned from P3.028 billion to P5.25 billion.
Of the total amount, foreign loans represent the 98.76 percent or P5.185 billion.
The foreign loan, incurred in building the SRP from the Japan Bank for International Cooperation, through the Land Bank of the Philippines, unless paid earlier will be borne by the City until 2025.
COA based its figures in pesos on the conversion rate of the Japanese yen at that time it came up with its annual audit report for 2005.
The City’s listed assets also include P224.211 million in receivables or collectibles from government owned and operated companies, nongovernment organizations and disallowances, among others.
For Bisaya stories from Cebu. Click here. (July 28, 2006 issue)
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