More LGUs complain of financial woes; probe set

MANILA, Philippines - Cities and municipalities all over the country are on the brink of bankruptcy, with some local leaders ordering strict austerity measures that threaten to delay projects and undermine delivery of basic services.

Interior and Local Government Secretary Manuel Roxas II said they would look into reports that previous administrations had scraped city and municipal budgets clean.

“We are gathering the information from the LGUs. Many newly elected city mayors have informally commented that they have been left with nothing. But these stories were anecdotal – we still have to find more data,” Roxas told The STAR.

Misamis Oriental Gov. Yevgeny Vincente Emano is blaming his predecessor for the province’s financial woes, which have prompted him to issue an executive order limiting expenses to 70 percent of the province’s budget.

Misamis Oriental “is in a fiscal crisis as the provincial government can no longer manage its debts due to a huge budget deficit, caused by an imbalance between revenues and expenditures,” he said.

“All departments are hereby ordered to ensure a reduction of at least 30 percent in the use of electricity, water and office supply. The Office of the Provincial Administrator shall ensure Internet or LAN connectivity among all offices and the use of the same for inter-office memorandum to save on paper and energy cost,” he said.

An audit observation memorandum (AOM) from the Commission on Audit (COA) last June revealed that actual collections from January to June amounted to only P492.5 million or 30 percent of the full-year target collection.

For the remaining half of the year, the Office of the Provincial Treasurer has projected an income of P516.6 million, including the province’s share in the Internal Revenue Allotment (IRA).

Emano revealed that total disbursements for the months of January to June amounted to P509.3 million while obligations without cash backup totaled P260 million.

He noted that the provincial government also has to pay P102 million in premiums to PhilHealth and loans totaling P24 million.

He said the province may have to settle at the moment its obligations incurred after June 30.

“The programs under the chief executive will be reviewed and if necessary, only those that are critical and necessary, such as disaster preparedness and delivery of health services, will be implemented,” Emano’s executive order read.

He also directed the provincial administrator to submit a program for austerity prepared in consultation with all departments while the Sangguniang Panlalawigan, under the provincial vice governor, is called to adopt its own austerity program.

Unless extremely necessary, travel and meetings outside Misamis Oriental and Cagayan de Oro City are not allowed in the meantime.

In his executive order, Emano also suspended the purchase of vehicles except ambulances or those for disaster preparedness. Also restricted are training, workshops and seminars, as well as some cultural activities unless deemed necessary under the province’s tourism development program.

Also in the red territory is the municipality of Guiguinto in Bulacan, whose budget deficit stands at P50 million. Officials also lamented that some properties and equipment owned by the municipality were unaccounted for.

Municipal administrator Edilberto Cruz said expenses have been limited to employee’s salaries, acquisition of office supplies, and delivery of social services. The municipality is headed by Mayor Ambrosio Cruz.

Cruz said the municipality also had to settle P2 million in mobile telephone bills carried over from the previous leadership.

“I issued a memorandum that telephone expenses will be limited to the mayor, members of the Sangguniang Bayan and department heads,” he said.

Cruz described the expenses as “mind boggling” and “shocking.”

More woes up north

In Pangasinan, Dagupan City and the town of Binmaley also reported severe financial difficulties.

Dagupan City Mayor Belen Fernandez said she has only P8.5 million cash on hand against a total projected expense of P56.3 million.

Luz de Guzman, acting budget officer, said the P8.5 million was all that remained of the P612-million approved budget for 2013 after deducting the expenditures made by the past city administration, or some P356.1 million.

Fernandez said the city, as it turned out, had incurred a deficit of P21.6 million in 2012 and the past administration used the 2013 budget to cover it.

Fernandez cited a report of City Treasurer Romelita Alcantara before the Sangguniang Panlungsod in 2012 that the city had P1-million surplus to justify a request of former mayor Benjamin Lim for a supplemental budget.

But Alcantara, in a meeting called by Fernandez, admitted that the P22.6 million from the 2013 budget had been used to pay different creditors. The same problem was raised by Binmaley Mayor Simplicio Rosario.

“Believe it or not, as of June 30, it’s zero balance with even thousands of pesos debts left for gasoline expenses,” Rosario said.

Rosario also said that of the P4.32-million appropriation for job order for workers, only P2,188 was left on June 30 when he assumed office.

Of the P3.1 million for indigents, only P100,000 remained when Rosario took over.

Hidden budget

Bacolod Mayor Monico Puentevella lambasted his predecessor for keeping him “in the dark as far as our financial situation is concerned.”

“It’s unfortunate that despite DILG’s memo discouraging or preventing local government units from incurring more debts or loans, our City of Smiles (tagline of Bacolod) isn’t smiling anymore with P1.3-billion debt we inherited,” Puentevella said in press statement.

“And not surprisingly, these are made on the year just before the elections are held. The Department of Finance knows this but somehow, they have tolerated it through the years,” he said.

“I’m just stating this for the record for DILG and Department of Finance now to prevent this from continuing, unless there’s a calamity or incidents of this nature,” he said.

“And what is worse, to rise from the ashes, most of the inheritors are forced to borrow again in order to survive or do their job.  Stringent guidelines are essential, or there’s no end to this. Victims are the taxpayers,” he said.

He said they were on an “Easter hunt” for funds in Bacolod City Hall. “As far as hidden money is concerned, we have not found it yet,” he said.

Mayor Rolando Distura of Dumangas town in Iloilo is also complaining of depleted coffers.

“For one, the fund allocated for assistance in crisis situation, which is usually given as aid to indigents, was left with almost nothing,” he said. Before the second quarter of the year, the previous administration requested for P300,000 supplemental budget while then Rep. Ferjenel Biron provided P500,000.

“Of the P1.8 million, when I assumed post last July 1, what was left was P1,200. It was unfair because we deemed that it was inappropriately used,” Distura said.

He also said Dumangas entered into a loan agreement with the Development Bank of the Philippines for P13.5 million set to  mature in April 2016. The money was used for the construction of a transport terminal.

“I acknowledge that the intention was good. But my hands are now tied because of the little fund when I took over,” he added. – With Charlie Lagasca, Cecille Suerte Felipe, Michelle Zoleta, Raymund Catindig, Roel Pareño, Jennifer Rendon, Danny Dangcalan, Eva Visperas, Dino Balabo