Local execs face empty coffers

MANILA, Philippines - Key cities and provinces in the country are facing liquidity problems because of empty coffers and debts left by their former local officials.

Misamis Oriental is the latest local government unit forced to implement austerity measures in the wake of the finding of the Commission on Audit (COA) that the administration of former governor Oscar Moreno incurred a deficit of P506 million.

Manila Mayor Joseph Estrada and Vice Mayor Isko Moreno earlier called on the previous city administration to account for P3.5 billion in debt owed by the city government.

Estrada earlier noted that because of the fund lack, his predecessor had to veto the purchase of P240 million worth of much-needed equipment for the city’s hospitals.

In Cebu, the new governor claims the former administration left a debt of close to P800 million.

Gov. Hilario Davide III disputed claims that Cebu was debt-free, pointing out that the province has payables of P788 million.

“It’s obvious that the province is not debt-free,” Davide was quoted as saying.

Most of the payables, Davide’s administration has claimed, had no supporting documents such as vouchers and contracts for services or projects that were not ratified by the provincial board.

In the case of Misamis Oriental, a COA report dated July 26, 2013 stated that after a review of the financial accounts of the province as of June 2013, glaring deficiencies/errors were found.

Cash intended for payment of statutory and other obligations to national government agencies, local governments and government owned/controlled corporations were used for some other purposes, resulting in unpaid amount of P596,698,345.74 as of June 30, 2013, in violation of Section 305 (e) of Republic Act 7160 and Section 103 of Presidential Decree 1445.

The COA audit conducted by state auditors Virginia del Rosario and Myrna Ofngol said that the cash available as of June 30, 2013 totaling P90,010,341.50 was not sufficient to meet the provincial government’s current obligations and trust liabilities totaling P524,331,215.07 and accounts payable of P72,367,130.67 or a total of P596,698,345.74 indicating a deficit of P506,668,004.24.

The report concluded the province has no sufficient funds to pay creditors since it incurred more obligations than revenues it actually collected per accounting records. Total income realized/collected from January to June 2013 amounted to P492,541,707.67 with corresponding disbursements of P509,376,858.00, which consist of current and prior years of obligations of P392,113,616.98 and P117,254,241.54, respectively or a shortfall of P16,826,150.33

Because of the dire straits inherited from the past administration of Misamis Oriental, Gov. Yevgeny Vincente Emano issued an executive order directing the reduction in use of the 2013 provincial budget at 70 percent and adopting austerity measures for operations of the provincial government from July to December 2013.

The order also urged department heads to submit revenue-generating plans and programs.