Loan payment takes up ‘largest chunk’ of 2020 budget

THE taxes the Cebu City Government has collected will be the biggest source of funds for the proposed P10.4 billion 2020 Annual Budget.

The revenues are specified as business taxes, which contributed P2.2 billion; real property taxes, P1.5 billion; and other taxes like community tax and professional tax, among others, P500 million for a total of P4.2 billion.

Another internal source of funds comes from non-tax revenues at P2 billion.

External sources will come from the City’s Internal Revenue Allotment (IRA) for 2020, which is P2.2 billion; the City’s share of the ecozone, which is P275 million; and proceeds from the sale of a lot at the South Road Properties, which stands at P1.5 billion.

Jerone Castillo, officer-in-charge of the City Treasurer’s Office, said they did not include the City’s share from the joint venture agreement (JVA) with Filinvest Land Inc. (FLI) since there is no provision that FLI will pay next year.

In February 2019, FLI remitted P1 billion to the City. The sum represented the second tranche of the latter’s share. After taxes were deducted, the amount, which represented the fixed minimum guarantee fee for Phase 1 of the JVA, was P904.8 million.

Next year’s budget is P2 billion more than the 2019 annual budget, which was P8.1 billion.

The largest chunk of the budget, or P700 million, will go to paying the City’s SRP loan.

The City intends to reduce the paying period to three years. The City was supposed to pay off the loan in 2025 yet, but Mayor Edgardo Labella wants Cebu City to be debt-free by 2022.

Another top priority in the 2020 annual budget is the modernization of the City’s traffic system which has been allocated P250 million, giving the Cebu City Transportation Office its complete 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 more medium-rise buildings. In the second supplemental budget, the City allocated P268 million for the construction of three medium-rise buildings in Barangay Zapatera and P211 million for scholarship.

When the annual budget was endorsed to the City Council, members questioned why Acting City Treasurer Arlene Rentuza “signed it with reservation.”

On Monday, Nov. 18, 2019, Rentuza appeared before the council to explain.

She said she was not invited to any meetings conducted by the local finance committee, which she is a part of. She said she had no idea how the budget was computed. She also didn’t think the proceeds from the SRP lot sale should be used because of a pending case.

However, Councilor Raymond Alvin Garcia, committee on budget and finance chairman, said the case filed by Romulo Torres to stop the City from spending the proceeds was already dismissed, while the court did not issue any restraining order or injunction relief after former mayor Osmeña filed a similar case.

Garcia pointed out that the proposed 2020 annual budget is still valid despite Rentuza’s “reservation.”

Councilor Lea Japson also questioned why she was not invited to the meetings of the local finance committee, which was formed last July 16.

Rentuza said she only received a copy of the memorandum on the creation of the committee last Nov. 15.

Rentuza will remain as acting city treasurer until Dec. 10, while Castillo waits for the Bureau of Local Government Finance to appoint him to the post. (JJL)