Sunday, October 29, 2006 Cebu City’s total budget close to P3B By Gingging A. Campaña Of Sun.Star Cebu
THE Cebu City Government may be spending close to P3 billion from its coffers if it appropriates another extra budget before the end of the year.
So far, the City has passed five supplemental budgets already, despite relying on its “barebones” annual budget.
But the number of supplemental budgets passed in a year is irrelevant, said local finance committee head Nigel Paul Villarete.
“There is no such thing as how many it should be. An LGU (local government unit) can budget as much as it wants depending on the accumulation of sources. The number is not significant,” he told Sun.Star Cebu.
City Hall is operating on a P2.28-billion annual budget this year, plus the five extra budgets that totaled P572 million.
But Villarete said spending this much is nothing compared with the main budget and where it is spent.
While the Department of Budget and Management (DBM) sets certain limitations in preparing the annual budget based on the Local Government Code, Villarete has not seen any in proposing extra budgets.
“Sanity will also dictate on an LGU, which has 12 supplemental budgets with one each month in a year. The limit is logic because everything hinges on the availability of funds. You can’t budget what you don’t have,” he said.
He said the skin-and-bones budgeting makes it easier for the City Government to determine what increments are needed and why these are needed.
Any increment, urgent and needed, that one expects to incur in a year will be covered by an extra budget, said Villarete.
“If one looks at the City’s annual budget or any other LGU’s, nothing is new. It’s all the same recurring costs of the previous year. It’s all maintenance and operations, salaries, supplies, gasoline and insurance. In other words, very boring. But if one wants to look at the substance and form of the development budget in a year, you wait and look at the first supplemental budget,” he said.
As to the number and how much, it’s insignificant, Villarete said.
For instance, the City passed four supplemental budgets in 2005 that totaled P2.7 billion.
On top of the P2.29-billion annual budget, the City allocated a total of P5.02 billion last year.
But the first supplemental budget worth P1.66 billion was passed only to correct the underreporting of foreign loan releases for the South Road Properties (SRP), and to reconcile it with records of the Land Bank of the Philippines.
At that time, the City Accounting Office still pegged the City’s debt from the Japan Bank for International Cooperation at P2.8 billion, the equivalent amount when the peso was still worth 4.4 yen in 1996.
By appropriating P1.62 billion, the recorded SRP loan payables would have been recorded at P4.3 billion more or less, Villarete had said.
That extra budget did not need fresh funds, as this only meant adjustments in the entries of the accounting records of City Hall.
A similar case was the third extra budget that totaled P831.5 million.
About P8 million of it was spent on the installation of lights on the new access road that connects the SRP and C. Padilla St. and on a previous expense of P689.6 million for the SRP construction.
Again, no fresh funds were needed as the added expense was already appropriated in a previous budget. It was only done for recording purposes in the City’s books of accounts.
For this year, the City Council passed the first supplemental budget of P74.46 million only last April, where P40 million was spent for the repair and maintenance of roads.
It was reported that City Hall lacked funds that some P40.9 million worth of projects, mostly infrastructure in the barangays, were declared “no longer feasible to execute.”
A certification said they could no longer be pursued because of lost documents and budgetary constraints arising from the high cost of construction materials.
The bulk of the second extra budget for this year was used for the capital gains tax incurred in the City’s sale of its property in the North Reclamation Area.
The property was sold to the Gokongweis at P579.3 million but the City spent P43 million for the taxes.
The City Council passed the second supplemental budget of P256.6 million to cover that and the P32.8-million budget for the 30 Toyota Innova vans for the Association of Southeast Asian Nations (Asean) summit in December.
Under the same extra budget, P20 million was set aside “to entertain the foreign media” who will be covering the summit.
Last August, the council passed the third extra budget amounting to P142.5 million, to cover the balance of the SRP loan amortization of P266 million due to Land Bank last Aug. 18.
The fourth supplemental budget, worth P81.95, was passed last month to augment the funds needed for the preparation of the Asean summit, putting aside most of the projects endorsed by district councilors from the barangays.
The biggest chunk of the budget was spent for the repair of drainage, roads, traffic system and landscaping at the North Reclamation Area.
Last Wednesday, the council approved the P17.3-million fifth supplemental budget, which included P12 million for the second phase of the renovation of the old legislative building. (GAC)
