DBM declares Cebu City’s appropriation ordinance for 2023 annual budget ‘inoperative in part’

Cebu City Hall

Cebu City Hall| file photo

CEBU CITY, Philippines — The Department of Budget and Management in Central Visayas (DBM-7) has declared the Appropriation Ordinance (AO) for Cebu City’s P51.457 billion 2023 annual budget “inoperative in part.”

The DBM-7 has already finished reviewing the 2023 Annual Budget of Cebu City, which includes a P49.703 billion appropriation for the General Fund Proper and a P1.754 billion for Special Accounts under AO No. 2675.

To recall, the Cebu City Council approved AO No. 2675, authored by Cebu City Councilor Noel Eleuterio Wenceslao, for the proposed P51.457 billion Annual Budget last Dec. 28, 2022, with three objections and one abstention.

READ: Cebu City Council OKs P51.4B 2023 annual budget

In his review letter addressed to the Council last March 20, 2023, Lenin Bersales, DBM-7 acting director IV, said that AO No. 2675 “reveals substantial compliance” with the provisions of the Local Government Code of 1991 and its Implementing Rules and Regulations.

However, the “inoperative part” represents the excess amount appropriated for the Recovery and Rehabilitation of Infrastructure Works under the Local Disaster Risk Reduction and Management Fund over the amount provided in the Annual Investment Program for the same Program/Project/Activity.

Bersales explained that following the provisions of the Local Government Code of 1991, local budgets should operationalize approved local development plans.

“As such, to ensure that plan-budget linkage is achieved and that local budgets truly operationalize approved local development plans, it is imperative that the local budgets fund the PPAs included in the investment programs, particularly in the AIP,” the DBM letter reads.

“Thus, the specific PPAs for the appropriations in the AB (annual budget) must be found in the approved AIP. In the same vein, the appropriated amount for PPAs in the AB shall in no case be greater than the amount in the AIP,” it added.

Operative parts

Meanwhile, Bersales said the operative parts of the AO would take effect on the date indicated in the AO.

These, however, are still subject to posting requirements under Section 59 of the Local Government Code of 1991.

Under the AO 2675, the city will source the fund for the General Fund Proper from the tax revenue (P44,536,128,566.00); non-tax revenue (P2,126,047,474.00); National Tax Allotment (P2,740,871,434.00), and share from Ecozone of P300,000,000.

While, for the budget for special accounts (which is inclusive of subsidy from the General Fund Proper in the amount of P1,457,715,685.30), the city government will take it from the City Hospital’s non-tax revenue at P180,000,000; City Hospital’s subsidy from the General Fund Proper (P773,462,470.50); Division for the Welfare of the Urban Poor (DWUP)’s non-tax revenue (P8,500,000) and its subsidy from General Fund Proper (P136,078,928); from the City markets’ non-tax revenue (P108,452,526), and the Local Development Fund (LDF) Subsidy from the General Fund Proper (P548,174,286.80).    /rcg

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