Cebu City

Cebu legislators slash Mike Rama’s proposed P100-billion budget for 2024 by 78%

Wenilyn Sabalo

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Cebu legislators slash Mike Rama’s proposed P100-billion budget for 2024 by 78%

Cebu City Mayor Mike Rama delivers his speech, in celebration of his first 100 days in office at the Cebu City Hall, on October 3, 2022. Jacqueline Hernandez/Rappler

The approved amount also marks a decrease of nearly 50% from the Cebu City government’s P50-billion budget this year

CEBU, Philippines – The Cebu City Council approved a P22.093-billion annual budget for the city government for 2024 on Wednesday, December 20.

The approved amount marks a substantial cut of about 78% from Cebu Mayor Michael “Mike” Rama’s initially proposed P100-billion annual budget for next year and a nearly 50% decrease from the approved P50-billion budget for 2023.

The City Council had its final deliberation on the proposed ordinance enacting the 2024 Annual Budget during its regular session on Wednesday – a week after its budget and finance committee chairman, Councilor Noel Wenceslao, said the appropriations should not exceed P50 billion.

The approved budget allocates P19.99 billion for the General Fund Proper and P2.09 billion for the Special Accounts.

Among the salient amendments made by Cebu City’s legislature is a budget cut for miscellaneous expenses related to climate change under the Maintenance and Other Operating Expenses (MOOE) of the Office of the Mayor, reduced from P1 billion to an approved budget of P2 million.

Other significant amendments were made to the capital outlay and MOOE. The approved budget for capital outlay for the next year is P11.1 billion, down from the proposed P77 billion. The MOOE was also slashed from the proposed P18.3 billion to P5.4 billion.

The City Council, however, left the proposed budgets untouched for personnel services and subsidy at P2.5 billion and P900.6 million, respectively.

It, however, remained optimistic in its projection of the revenue and earning capacity of the city government as it projected to generate some P98.84 billion for its general fund.

Of the total amount, P77.5 billion will be taken from tax revenues; around P10.6 billion from non-tax revenues; P2.90 billion from national tax allotment; P288 million from shares from government-owned and -controlled corporations, and P7 billion from other sources, such as shares from the profit of joint ventures.

The executive department, particularly the Local Finance Committee, earlier said the P100-billion budget was necessary to support Rama’s vision of a Singapore-like Cebu City through various projects and development programs.

Cebu City Budget and Finance Officer Jerone Castillo, during a budget hearing in November, expressed confidence that the P100-billion proposed budget would be funded, citing economic indicators over the past 20 years that showed Cebu City’s rapid growth. Efforts to enhance tax collection efficiency and update the real property tax code were also discussed.

The City Council, however, asked each city hall department to slash budget proposals and prioritize only the essential programs and expenditures.

It also questioned the need to double the 2023 annual budget when the city government was only able to raise around P8 billion in revenues as of October this year.

The City Council in December 2022 approved an annual budget of P51.45 billion for 2023, which dwarfed the 2022 budgets of the local governments of Quezon City (P30.5 billion) and Manila City (P22.2 billion), two of the wealthiest cities in the country, in terms of assets.

The Cebu city government’s failure to generate its P50-billion target revenue for 2023 delayed the implementation of major infrastructure projects, such as the construction of more medium-rise buildings for residents needing relocation and the transfer of the legislative and executive buildings of the city hall to the South Road Properties.

“I am with the mayor for the Singapore-like Cebu City, but I am not in agreement with all these budgets… I cannot really, by conscience agree and even for the P50 billion,” Pesquera said during the City Council’s deliberation on December 13. – 

Wenilyn Sabalo is an Aries Rufo Journalism fellow for 2023-2024.

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