EDITORIAL: The city’s financial health
WHILE we may pale in comparison with the other larger cities, such as Cebu, Davao, and those found in Central Luzon and Metro Manila, our local officials and economic and financial managers deserve our congratulations for consistently keeping Naga as the richest city in Bicol.
City Mayor John Bongat and the Sangguniang Panlungsod led by Vice Mayor Nelson Legacion as presiding officer ought to be commended that under their watch, the city’s annual budget, and thus its primary thrust to optimize public service, has breached the P1B mark, making it the first city in Bicol to be in the elite list of “billionaire cities” nationwide. From an annual budget of P1.11B in 2017, this rose to P1.138B this year and will go up to as much as P1.3B next year, the highest in any Bicol LGU.
Based on the mandated Annual Financial Report of the Commission on Audit (COA), Naga remains to be the richest city in Bicol, both in terms of assets and income (revenues). In terms of assets, Naga has P4.67B, way above second placer Ligao City with its P2.24B and Legazpi City’s P2.04B.
Meanwhile, with total assets of P196.6 billion, Makati is still the richest city in the country, followed by Quezon City with P68.33 billion and Manila with P38.68 billion. Cebu Province remains as the richest province in the country in terms of total assets with P34.14 billion.
In terms of revenues, Naga registered a collection of P1.20B, followed closely by Legazpi City at P1.03B, or a difference of P170 million between them. Revenue is defined as the income of a government from taxation, excise duties, customs, or other sources, appropriated to the payment of public services and expenses.
Dubbed as the most important economic policy instrument for governments, the LGUs’ annual budget reflects a government’s socio-economic priorities by translating policies and commitments into expenditure and revenue. As the main instrument for the distribution of income, the budget directly and indirectly affects the life of all citizens, as regards, for instance, infrastructure, sanitation and health services, environment, education, and many other development priorities and frontline services.
On October 16 each year, the mayor presents for legislation the executive budget to the Sangguniang Panlungsod. Three documents make up the executive budget: a budget message stressing the significance of the proposed budget in relation to the city’s development plan, a summary of the city’s planned activities, and financial statements showing the actual and estimated income and expenditures in the preceding, current, and ensuing year. The last instrument includes information about the city’s obligations and indebtedness, a summary of statutory and contractual obligations, and other financial statements that show the local government’s financial condition.
The Sangguniang Panlungsod, on the other hand, holds a series of public hearings before buckling down to review the mayor’s proposal.
But where does the city or do the local governments get the money to fund their budgets? First, there’s the central government (Department of Budget and Management) from which they draw their internal revenue allotment (IRA) and their share from the national wealth. Then, LGUs can on their own slap taxes like real property and business taxes, impose fees and collect charges for services and goods delivered to the public. Does Naga impose the highest tax rate in Bicol? That’s an issue to debate on, notwithstanding the fact that delivery of public services in the heart of Bicol is relatively better off than those in other urban centers.
Wherever the money comes from, there are two things to bear in mind: One, any money a local government officer receives officially in any capacity or on any occasion must be accounted for as local funds. Two, every LGU officer who keeps the local fund must be properly bonded and is accountable and responsible for the funds in his or her safekeeping.