Cebu City ‘4th, richest’ in terms of total assets

CEBU CITY is P1.23 billion richer than it was in 2016 and is still the fourth richest city in the country in terms of total assets, according to the Commission on Audit (COA).

From P32.62 billion in 2016, the City’s assets rose to P33.86 billion the following year, based on the COA’s 2017 annual financial report.

Cebu City, though, also ranked first in terms of liabilities at P24.72 billion, leaving it with a net worth of P9.14 billion.

According to the COA, this is mainly due to the City’s other deferred credits or unearned income of P15.72 billion, which represents 63.59 percent of its total liabilities.

Deferred credit or unearned income refers to money received in advance before it is earned. It usually stems from complicated transactions where a credit amount arises, but the amount is not revenue.

That’s money we received, but has not been realized as income. That’s not debt. The others are dues that haven’t been paid or claimed, said Cebu City Treasurer Veronica Morelos in Cebuano.

She attributed this to supplies that had yet to be paid, or claims of City Hall employees that had yet to be settled, among others.

“Those are liabilities legally incurred and committed to be paid for, but haven’t been paid for yet because there may have been problems with the papers, she added.

The development drew contrasting views from reelectionist Councilor Joel Garganera and Bando Osmeña Pundok Kauswagan vice mayoral candidate, Councilor Mary Ann de los Santos.

“I think it’s a misnomer when we call ourselves as one of the richest cities when we have that much liabilities. We should get rid of that title. What determines the overall state of our city is reflected in what’s going on around us,” Garganera said.

Osmeña, asked to comment, replied, “No comment.”

City Treasurer Morelos said the only loan the City Government has is the one it contracted for the South Road Properties (SRP) project.

Based on the COA’s report, Cebu City had a loan amounting to 12.315 billion yen with the Land Bank of the Philippines and Japan International Cooperation Agency to finance the SRP project which started in 1995.

At that time, it was equivalent to P4.65 billion. It is payable within 30 years or until 2025.

In a privilege speech last September, opposition Councilor Joy Pesquera said records from the City Accounting Office as of Feb. 20 show that the City Government had paid a total of P6.56 billion.

This included payment of principal amounting to P3.56 billion, interest of P2.8 billion, P26 million in documentary stamps and P51,968 in bank charges. Some P1.03 billion was incurred in foreign exchange (forex) losses.

The forex loss was attributed to the City Government still needing to buy US dollars to be exchanged to Japanese yen to pay off the loan. (The US dollar-Philippine peso exchange rate in 1995 was US$1=P37. The exchange rate as of Monday, Nov. 5, 2018, was US1=P53.269.)

As of calendar year 2017, the COA said the City Government had an outstanding balance of P1.09 billion on the SRP loan.

City Hall paid its loan amortization last Aug. 20. The City has been paying for its loan twice a year, on Feb. 20 and Aug. 20. The City began paying for the SRP loan in August 2005.

The executive department has also allocated P448.9 million for the amortization of the SRP loan in the proposed 2019 annual budget.

Of the amount, P347.9 million is for foreign loan payments, P97.6 million for interest expenses and P3.5 million for documentary stamp and other charges.

For Garganera, one of the mayor’s critics, it would have been wise if the City Government used the payment, made by a consortium of three developers that bought 45 hectares of land in the SRP in 2015, to settle its 23-year-old loan.

The mayor, though, has been firm in his stand to recover the property, saying the sale was illegal because Michael Rama, who was mayor then, was not authorized to dispose of the lots.

Earlier, Osmeña lamented that while the City has P12 billion in cash, his administration will not touch it “because it came from an illegal sale.”

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.

In the same report, COA classified Cebu Province as the richest province in the country in terms of total assets with P34.14 billion. (with reports from JKV)

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