CEBU City’s 2020 budget amounting to P10.4 billion was passed by the Council in a vote of 10 in favor, seven against with one abstention during its session Wednesday, Dec. 18, 2019.
The new budget is P2 billion higher than this year’s which was P8.1 billion.
Biggest fund sources are proceeds of the sale of lots at the South Road Properties (SRP) to the consortium of the SM Prime Holdings Inc. and Ayala Land Inc. Of the P10.4 billion budget, P1.5 billion will come from the sale of SRP properties.
Other sources of funds are collected taxes at P4.2 billion; Internal Revenue Allotment or IRA from the National Government for 2020 at P2.2 billion; non-tax revenues at P2 billion; and the City’s share of taxes paid by enterprises in economic zones at P275 million.
The largest chunk of the budget, or P700 million, will go to paying the City’s SRP loan to the Land Bank of the Philippines, the conduit bank for the principal loan from the Japan International Cooperation Agency (Jica). The City wants to reduce the paying period for the loan to three years. The City acquired a 12.315 billion yen loan from Jica for the SRP in 1995. The loan’s peso equivalent at that time was P4.65 billion. The loan is payable until 2025 but Mayor Edgardo Labella earlier said he wants Cebu City debt-free by 2022.
Other budget priorities are: P250 million for the modernization of the city’s traffic system, with the amount completing the Cebu City Transportation Office’s request of P500 million for this purpose; P500 million for garbage collection and disposal, construction of a material recovery facility and purchase of hydraulic compaction garbage trucks and bins; and P25 million for the construction of a water management facility.
Some P230 million is also allocated for the establishment of medium-rise buildings and P211 million for a scholarship fund.
Councilors were divided and a voting was called after some questioned the use of the SRP proceeds when there are legal issues over the sale which are under litigation.
Those who voted in favor were those identified with Mayor Labella, namely Councilors Raymond Alvin Garcia, Dave Tumulak, Renato Osmeña Jr., Joel Garganera, Antonio Cuenco, Jerry Guardo, Donaldo “Dondon” Hontiveros, Eduardo Rama Jr., Prisca Niña Mabatid and Phillip Zafra.
Those who voted against were Councilors Nestor Archival, Alvin Dizon, Joy Augustus Young, Eugenio Gabuya Jr., Lea Japson, Raul Alcoseba and Jessica Resch of the minority bloc.
Association of Barangay Councils president and Councilor Franklyn Ong abstained without giving a reason.
Those who opposed said they were not against the approval of the budget but they questioned the source of the fund, the bulk of which will come from the sale of the SRP lots.
“My objection is anchored on the source of funds, but I support the appropriations,” Dizon said.
Meanwhile, councilors who are allies of former mayor Tomas Osmeña have filed a petition before the Regional Trial Court (RTC) asking that they be allowed to intervene in the case filed by Osmeña last September against the City as represented by Labella, the Council, SM Prime Holdings Inc. and Ayala Land Inc., among others.
Osmeña had filed the petition for declaratory relief with prayer for a preliminary injunction to stop the sale of the SRP lots.
In their joint affidavit, Archival, Young, Japson, Dizon, Gabuya, Alcoseba and Resch requested for the court’s permission to intervene in the case. They also asked for the court’s guidance on how to proceed with the development of SRP lots, particularly on the legality of the appropriation of government funds that may be derived from the questioned contracts.
City Attorney Rey Gealon, meanwhile, said the sale “has been clearly and categorically declared valid and legal” by the RTC, which was affirmed by the Court of Appeals.
“I can only sense their utter desperation to revive a dead legal issue on the SRP sale,” Gealon said.