Tuesday, September 28, 2021

Council: Pass a budget, but not that budget

IT’S the tale of two supplemental budgets.

The Cebu City Council yesterday asked the executive department to submit a supplemental budget (SB), its first for this year, to cover the City’s P375-million amortization for the South Road Properties (SRP) loan.

But in court, 10 councilors also asked a judge to deny a former councilor’s petition to compel them to take up the P2.8-billion first supplemental budget proposed in 2015.

The City Government has not set aside any funds for this year’s SRP loan amortization under the P6.4-billion approved 2016 annual budget. Part of the reason for this is the supplemental budget that was proposed in 2015, but never approved.

Councilor Margarita Osmeña, chairperson of the council’s committee on budget and finance, raised in yesterday’s session the possible implications if the City will default on its obligations to the Land Bank of the Philippines (LBP).

“There are other local government units in this program, too. There has never been an instance when any local government unit has defaulted on its payment. Should this happen, all will be affected. The country’s risk rating may deteriorate. We certainly do not want to be the reason for this catastrophe,” she said in a privilege speech during the regular session yesterday.

On Feb. 20, Osmeña said, the City will have to pay P188 million as its amortization. On Aug. 20, the City needs to pay around the same amount to the state bank.

The LBP was the borrower on record when the Japan International Cooperation Agency (Jica) lent Cebu City 12.315 billion yen in 1995 (about P4.65 billion at that time) to develop the 300-hectare South Road Properties.

Councilor Osmeña lamented the “serious omission” made by the executive’s local finance committee, pointing to the lack of an appropriation in the 2016 budget to pay for its SRP obligations.


“Whether the omission was deliberate or was a result of negligence could be subject for speculation,” she said.

Osmeña is proposing that the executive use, as a source of funds for the supplemental budget, a portion of the continuing appropriations in the past years that remained unused.

This may include the P1.5-billion budget in 2015 for drainage projects that have not been implemented.

Councilor Noel Wenceslao said that the executive department deliberately did not include the amortization for the SRP in the 2016 budget, as they were hoping that the P2.8-billion proposed SB 1 in 2015 would be approved.

The bulk of that supplemental budget was supposed to cover the prepayment of the entire P2.4-billion loan balance for the SRP.

Had it been approved, Wenceslao said, the City would no longer have to pay the twice-a-year amortization.

“The SB 1 was not approved. That is why we have a problem,” he added.

An option

Osmeña recalled that the SB 1 last year has been held in abeyance since Sept. 30 because of a case filed Atty. Romulo Torres, now pending before the Court of Appeals.

“Also, it must be emphasized that this is a prepayment and, therefore, an option. Paying for the whole loan is desirable but not an obligation at this time,” she said.

Osmeña said the executive department has a few more days before the Feb. 20 due date to submit a supplemental budget for this year.

“We all know that the initiative in proposing a budget must come from the executive. We urge them to propose a supplemental budget so that we can immediately act on it. Let us not allow our political vanity to take over. Let me borrow a phrase: together we can make it happen,” she said, apparently a take on Mayor Michael Rama’s slogan.

The council, through the budget and finance committee, scheduled a meeting today with the executive’s local finance committee to discuss the matter.

As for the case in court, 10 councilors in the majority bloc have asked Regional Trial Court Judge Marivic Trabajo-Daray to deny the petition filed by former councilor Jose Daluz III.


Daluz had wanted the court to compel the City Council’s majority bloc to tackle the proposed P2.8-billion first supplemental budget in 2015.

In their comment, the councilors said the passage of the 2016 annual budget rendered the petition moot. Any order to compel the councilors to act on that supplemental budget, they said, would be impractical and unenforceable.

In their joint comment, the councilors asked Judge Daray to deny Daluz’s application for a temporary restraining order and preliminary injunction, saying his grounds were “baseless and speculative.”

“Without any doubt, petitioner’s (Daluz) asseverations are pure speculations. They are motherhood statements that barely deserve anyone’s scant consideration,” the councilors said in their pleading.

The respondents are Councilors Osmeña, Lea Japson, Mary Ann delos Santos, Sisinio Andales, Alvin Arcilla, Roberto Cabarrubias, Nida Cabrera, Alvin Dizon, Eugenio Gabuya Jr. and Nestor Archival.

Judge Daray had ordered them to answer Daluz’s petition, filed in December 2015.

‘Sound bites’

In his petition, Atty. Daluz said that the respondent councilors ought to act on the supplemental budget and “not just sit on it without justifiable ground.”

Sec. 99, Rule 27 of the Local Government Code provides for the powers, duties and functions of the City Council, including the enactment and approval of ordinances and resolutions and appropriations of funds for “the general welfare of the city and its inhabitants.”

Daluz said that City Ordinance 2332 allows the sale, transfer or conveyance of the SRP lots through public bidding.

He asked the court to order the respondent councilors to “promptly act, deliberate and vote” on the first supplemental budget.

But in their comment, the councilors said that Daluz has no clear and legal right to compel them to deliberate on the supplemental budget.

While Daluz filed the suit as a taxpayer, the councilors argued that such a case may prosper only if the government act being questioned involves the spending of public funds.

They said that the former councilor’s grounds were “sound bites more fitting for a political speech than a pleading filed before an honorable court where the rule of law, and not politics, prevails.”

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