DBM finds parts of Cebu City's budget for 2015 inoperative

March 27, 2015 2:14 am 

CEBU CITY, March 26 — Cebu City allocated too much funds for its debt payments this year, the Department of Budget and Management (DBM) said after reviewing the 2015 budget and find parts of it inoperative.

In a letter to the Cebu City Government, DBM 7 Director Carmela Fernan said the city went over the debt cap in its budget appropriations.

She also said the vetoed items of the appropriations ordinance were not overridden by the Cebu City Council, so these are also inoperative.

DBM acknowledged that the annual budget under the general fund amounting to P13.4 billion and the P998 million for the special accounts “reveal substantial compliance with the same law and its implementing rules and regulations, except for the excess appropriations for loan repayments/amortization.”

The two-page letter laid out that the city’s appropriation for debt servicing reached P3.2 billion, when it should only be allowed P974 million.

The amount was computed based on the 2014 income of P4.9 billion. The debt cap is 20 percent of the amount.

An excess of P2.2 billion was found.

Cebu City Treasurer Diwa Cuevas said there is no problem with the debt cap since the city cannot disburse the P3.2 billion debt servicing appropriation just yet.

The amount represents the outstanding balance for the South Road Properties (SRP) loan.

Cebu City Mayor Michael Rama wanted to take out another loan to pay off the outstanding balance.

Doing so would mean the city would rid itself of the foreign currency conversion since the loan was in yen.

The current loan is subject to currency fluctuations.

Cuevas said she is yet to meet with other department heads to discuss how to reply to DBM’s letter. (PNA)

LAP/EB/

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