Council urged: Check revenues

CEBU, Philippines — Cebu City Vice Mayor Tomas Osmeña and Councilor Mikel Rama have urged the City Council to first determine whether the city can generate enough revenue to support its proposed P15-billion budget for 2027, stressing that spending plans should be based on the city's actual financial position.

The two officials raised the concern ahead of the City Council's deliberations on Mayor Nestor Archival's proposed budget, which are set to begin today, October 22. Both said revenue generation and the city's cash position should be established before the council proceeds with expenditure planning.

Rama pointed out that the revenue projections underpinning the proposed budget depend partly on the passage of the proposed 2026 Local Revenue Code, which has yet to undergo legislative scrutiny and public hearings.

"Based on the executive budget submitted by the Executive, it states there that their expected income, the basis for our budget, is actually dependent on the passage of this new revenue code," Rama told the council.

He said the council should closely examine the projections because the city's proposed spending program partly relies on a measure that remains pending before the legislative body.

Osmeña echoed the concern, questioning how the council could responsibly deliberate on a new spending plan while unresolved financial issues continue to hound the city.

"I remember that we have calls to the chairman to ask them to give their report on why there's a report that gives a deficiency of P13 billion pesos," Osmeña said during the session.

"How can we address a new budget when we cannot even address the existing deficiency?"

Osmeña urged the council to verify the city's actual revenues before discussing appropriations.

"Before you divide the pie, you have to find out first how big the pie is. Then we can divide the pie," he said.

"Do not try to divide the pie without knowing how big it is."

Osmeña's remarks echoed his earlier concerns over a cash insufficiency flagged by the Commission on Audit (COA), which was later adjusted to P13.70 billion from an initial P14.44 billion.

Despite the adjustment, COA maintained that the city's appropriations and liabilities exceeded its available cash and cash equivalents as of December 31, 2025.

According to the audit findings, Cebu City had approximately P4.76 billion in cash and cash equivalents against substantially larger obligations and continuing appropriations. Auditors warned that the fiscal situation could pose risks to project implementation and the settlement of obligations.

Osmeña said the council should thoroughly examine revenue trends and collection performance to avoid relying on unrealistic projections.

"We have to analyze what are the previous revenues compared to this year's revenues to see if there are any shortfalls and to see to it that we don't make the mistake of projecting revenues that don't exist," he said.

To address these concerns, Osmeña proposed dividing the budget hearings into two phases, with the first focusing exclusively on revenue generation, projected collections and the city's financial standing before discussions shift to appropriations.

"I would like to recommend that we have a public hearing on the budget, divide it into two separate executive sessions. The first session is to discuss the revenues," he said.

The proposal was subsequently incorporated into the budget hearing framework, with Councilor Dave Tumulak, chairperson of the Committee on Budget and Finance, confirming that the initial hearing would cover revenue projections and the reported cash insufficiency.

The first budget hearing is scheduled for today, October 22, with the Local Finance Committee, City Planning Office and City Treasurer's Office expected to explain the city's revenue outlook and financial position.

Archival submitted the proposed P15-billion budget to the City Council on October 7, but it was placed on the agenda only this week.

Under the proposed expenditure program, P7.06 billion, or 47 percent of the budget, is allocated for general public services, while P4.49 billion, or about 30 percent, is earmarked for social services. Another P1.09 billion is proposed for economic services.

The spending plan also includes P851.47 million for the Local Development Fund, P750.89 million in financial assistance to barangays, P750 million for the Local Disaster Risk Reduction and Management Fund, and P10 million for miscellaneous purposes.

Among the largest allocations are P3.16 billion for the Office of the Mayor, P1.41 billion for the Department of General Services, P940.28 million for the Department of Social Welfare and Services, and P806.98 million for the City Health Department.

The city expects to finance the proposed budget through local tax collections, its National Tax Allotment share, non-tax revenues and other income sources. — /FPL (FREEMAN)