Quezon City gets high rating for fiscal performance

MANILA, Philippines - Standard and Poor’s has given Quezon City, under the administration of Mayor Feliciano Belmonte Jr., a high rating for having developed a high level of sophistication in revenue management and an exemplary performance in liquidity and cash management.

City treasurer Dr. Victor Endriga said S&P gave QC an issuer credit rating of phA+ for “solid liquidity levels and strong budgetary performance, debt-free position and financial flexibility.”

He said S&P’s evaluation report cited the built-in systems and policies designed by the city treasurer’s office that heightened general tax collection capacity, fiscal accountability and discipline that enabled the city to make fiscal history in 2008 as the first local government unit to breach the P10-billion annual tax collection level.

Standard and Poor’s also noted that notwithstanding the existence of institutional constraints that hamper QC from reaching its full potentials, Belmonte’s revenue management — categorized as “sound” — and the treasury’s liquidity and cash management prowess — which earned an “Intermediate Plus” rating — had been classified as great growth points that earned for the city kudos from the international rating service.

According to Standard and Poor’s, QC’s overall financial management sophistication is more advanced than its peers like the Global City Taguig, Mandaluyong and Marikina, particularly for having consistently collected substantially more revenue than what the government budget requires. Significantly, the other mega cities failed to match up fiscal revenue collection to budget targets. Records revealed that even Makati and Manila had to resort to bank borrowings and inter-agency transfers to cover budgetary deficits in 2008.

The treasury’s computerized point-of-sale tax collection system that enables Belmonte to track down total funds available for public governance was hailed by S&P as a system worthy of emulation by other LGUs. QC also got high marks for having the best disclosure standards like opening to public scrutiny daily collection and disbursement reports, as well as available cash on hand and in bank, placed on Endriga’s desk for all to see. The same figures are also posted on the city’s website.

S&P also cited Endriga’s effort to thoroughly eliminate graft in the tax collection process with the aid of the office’s computerized collection system. It also noted that QC was the first to implement E-NGAS (electronic national government accounting system) reflecting an effort to be in the forefront of nation-building that helped the NG weather the onslaught of the worldwide financial fiasco.

An overview of QC’s strength indicated the treasury’s tax collection efficiency standard had been pegged at an average rate of 92 percent. Its performance in liquidity and cash management remained the highest in the country, with free cash and liquid assets amounting to 116 percent of 2007 operating expenditures, by far the strongest liquidity position among LGUs nationwide, further ensuring efficiency in cash inflow and outflow management.

Standard and Poor’s also noted that while QC had kept its rates and charges low, with property valuation among the lowest in Metro Manila, the city enjoys financial flexibility that is substantially higher than its peers. The liquidity position remains strong with free cash and liquid assets covering an average of 98.5 percent of operating expenditures from 2003 onwards.