Pesquera on budget cut: 'Increase revenue first'

Cebu City Councilor Jocelyn Pesquera (center) with Beyond the Headlines hosts Rolando Morallo and Mildred Galarpe explained the rationale behind the budget cut of the proposed P100 billion to P22 billion for 2024.
Cebu City Councilor Jocelyn Pesquera (center) with Beyond the Headlines hosts Rolando Morallo and Mildred Galarpe explained the rationale behind the budget cut of the proposed P100 billion to P22 billion for 2024. SunStar Cebu

MAJORITY floor leader Cebu City Councilor Jocelyn Pesquera said the budget cuts made on the proposed P100 billion annual budget for 2024 were necessary to align the City Government’s projected revenue with its actual revenue for 2023.

Pesquera, who co-authored the budget ordinance with budget and finance committee chairman Noel Wenceslao, said if the 2024 budget proposal were based on projections, it would be preferable for the City to first achieve its projected income through revenue collection in the upcoming years before considering an increase in its annual budget.

In December 2022, the council approved Cebu City’s P50 billion annual budget for 2023; however, the City has only collected a gross amount of P7,556,320,087.76 as of October.

SunStar Cebu tried to obtain the latest revenue collection figures of the City, but phone calls to City Treasurer Mare Vae Reyes went unanswered as of press time.

Projections

During an interview with SunStar Cebu’s online news program “Beyond the Headlines” on Friday, Dec. 22, Pesquera explained that the bulk of the proposed budget from the executive department under Mayor Michael Rama’s administration, as presented by the Local Finance Committee (LFC) to the City Council, will be funded by an estimated tax revenue of P77.5 billion.

She said the executive branch considered the funding source for the projected revenue from the possible approval of the revised Real Property Tax (RPT) ordinance by the City Council.

She also refuted Rama’s claim that the 2024 annual budget cut was a “political move.”

“I do not know how come he made such (a statement) nga (that it was) politicized nga (because) number 1, (we are members of) Partido Barug mi, although siya ra ang nideklarar nga (it was he who declared to be) independent,” she said.

“Nahibulong bitaw mi nga kami Partido Barug, unya ang among head (kay) nideklarar nga independent siya. Wa sad mi kasabot,” she added.

(We were wondering why the head of our party, Partido Barug, declared that he is independent; we don’t understand.)

RPT deliberation

Pesquera said the current proposed changes to the RPT code are still being examined by the council, especially the potential increase in the Schedule of Fair Market Values (FMV).

The council has factored in the property owners’ ability to pay and the fairness of the situation for the city government, property owners, and the public for the proposed amendments to be approved.

If the executive department’s suggested rise in the FMV is implemented, Pesquera said it could negatively impact city property owners and deter prospective investors from engaging with the City due to expected high tax rates and land ownership expenses.

It will also affect the future developments of the current investors in the city, particularly Ayala Land Inc. and Robinsons Land Corp., which are among the largest developers in the city that have already openly voiced their worries about the changes in RPT dues, as this affects their future planning and development, Pesquera added.

The increase in the upcoming yearly RPT fees could also affect homeowners with residential lots, as they struggle to meet the proposed increase in their annual payments.

If passed, this will also impact the public at large, as businesses and commercial entities will need to recover the increase in their investments and costs, which will ultimately be transferred to the consumer, she said.

Cebu City has not revised its RPT code in nearly 20 years.

Proposed new RPT Code

In the committee report, Pesquera said proposed RPT adjustments in the FMV for the North District, where IT and Cebu Business Park are located, will be a minimum of 100 percent to a maximum of 3,200 percent.

In the South District, the adjustment varies from 100 percent to 8,233 percent due to the presence of the South Road Properties.

“Dako gyud, maong nasakitan ang atong mga big investors kay nakahimo na sila og projection for the next five years kay maguba,” Pesquera said.

(It’s really big, which is why our big investors are hurt because they had already made projections for the next five years, and these will be ruined.)

Unobtainable

She added that the current proposed RPT adjustments are more than the approved revised RPT ordinance by the City Council, which Rama vetoed in January this year.

As the suggested adjustment to the RPT Code is subject to the deliberation of the council, Pesquera said the majority of the expected revenue as presented by the executive department, which is intended to support the proposed P100 billion, will not be obtained at this time.

On Wednesday, Dec. 20, the City Council during a regular session approved a budget of more than P20 billion to fund the expenses for the next year.

Of the total approved budget, P19.998 billion will be allocated to the general fund proper, covering expenses such as personal services, maintenance, other operating expenses and capital outlay. Additionally, P2.055 billion will be designated for special accounts. / with WBS

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