CH faces P13 billion ‘cash shortfall’

CEBU, Philippines — Cebu City Vice Mayor Tomas Osmeña has raised serious concern over the city’s fiscal position, citing a Commission on Audit (COA) report showing that appropriations and liabilities far exceed available cash and cash equivalents.

“You’re emphasizing only the one billion difference. I’m emphasizing that 13 billion is 13 billion,” Osmeña told Councilor Dave Tumulak, stressing that whether the figure was P14.44 billion or the corrected P13.70 billion, the city still faces a significant shortfall.

He questioned Tumulak, chair of the Committee on Budget and Finance, for taking up the matter only after the audit report had been submitted months earlier.

“Why have you not brought up this matter before this body when it first came out that there is a cash insufficiency of 13 or 14 billion? We’re not talking about 13 million,” Osmeña said, calling for transparency and accountability.

A COA memorandum transmitted to Mayor Nestor Archival and the City Council clarified that the previously reported P14.44 billion insufficiency was overstated due to a cross-referencing error in the audit observation tables.

The correction reduced the “Total Continuing Appropriations” from P9.80 billion to P9.06 billion, bringing the reported insufficiency down to P13.70 billion. As of December 31, 2025, the city’s cash and cash equivalents was only P4,761,829,823.94.

Despite the adjustment, COA emphasized that the city’s appropriations and liabilities still exceed its available cash and cash equivalents. It said the situation is inconsistent with Section 86 of Presidential Decree No. 1445 and fiscal management principles under the Local Government Code.

The audit team warned that the imbalance could affect the timely implementation of programs and the settlement of valid obligations.

Tumulak acknowledged the correction but underscored the significance of the audit findings.

“The report of the Commission on Audit is very vital for the city government, especially the submitted information and guidance in the COA memorandum which primarily addresses minor corrections in the Cebu City Government’s calendar year 2025 Annual Audit Report,” he said.

He said that while the adjustment reduced the reported insufficiency from P14.44 billion to P13.70 billion, the audit observation remained significant.

“The city’s appropriation and liabilities exceeded available cash and cash equivalents, highlighting a potential insufficiency of cash support for budgetary commitments. This is inconsistent with Section 86 of PD 1445 and the fiscal management principles under RA 7160, which emphasize prudent financial planning and the need to safeguard timely implementation of programs and settlement of obligations,” he added.

Tumulak further said, “This is very crucial information… hopefully this coming 2027 budget, I would like also to request this august body to be more observant in terms of the submission of next year’s budget.”

He also admitted during the session that “this august body, karon lang nakahibalo na mao diay (just learned about it now), based on the report also submitted to us.”

The council eventually approved a motion to refer the COA findings to the Committee on Budget and Finance.

Councilor Jose Lorenzo Abellanosa also moved for a corollary motion directing the city treasurer, budget officer and city accountant to jointly validate and reconcile the reported excess of appropriations and liabilities over available cash.

The motion requires the three offices to submit within 30 days a detailed report and corrective action plan covering appropriations, obligations, liabilities, cash position, continuing appropriations and the city’s projected capacity to settle valid obligations.

The motion was seconded and carried without objection. — /FPL (FREEMAN)