Garcia denies City Hall deficit under his term: ‘We had P11B in bank’

FILE: A glimpse at the facade of the Cebu City Hall. | CDN Digital photo

CEBU CITY, Philippines — Former mayor Raymond Alvin Garcia disputed claims of a multibillion-peso budget deficit under his watch, saying the city had more than P11 billion in cash deposits and could well afford to pay job order (JO) workers.

Garcia, in an interview on July 4, pushed back against allegations that his administration left a huge budget deficit, saying the city’s finances were healthy and sufficient during his term.

“Pila raba na ang JOs? We had cash deposits of about P11 to P12 billion. Ang JO, dili raman gane na kaabot ug P100 million. Unya muingon na dayon nga maong dili ka renew tungod kay budget deficit? I think that is an inaccurate statement,” Garcia said in a media interview.

READ: Archival uncovers P2B to P3B deficit on first day as Cebu City Mayor

Garcia said the city had enough funds to cover operational expenses, including salaries, and that any perceived “deficit” may be due to accumulated payables from as far back as two decades ago.

“If you say deficit, maybe what he [Mayor Archival] means is if you pay all the payables since 2008, 2009, 2010 — over 20 years — then yes, maybe madako ang kuwang,” Garcia said. “But whose fault is it that those weren’t paid before?”

He clarified that under his watch from 2024 to 2025, the city was not in a budget deficit.

“I am certain — during my watch — there is no budget deficit,” he said.

Rama: “I can’t speak for what happened after I left.”

Former Mayor Michael Rama, who was dismissed during his final year in office and succeeded in full capacity by Garcia, offered a limited response regarding the city’s financial state.

“I cannot answer that actually because I’ve been out. I have only served all of you for about one year, so I cannot speak for what happened thereafter,” Rama said during a July 4 press conference.

Garcia assumed leadership of City Hall following Rama’s preventive suspension in May 2024. Rama was later dismissed in October 2024, and Garcia led the city until the end of the term in 2025.

Garcia cites zero debt, paid-off loans

Earlier, during a teleconference on June 17, Garcia revealed that the Cebu City Government had P12.1 billion in bank deposits as of June 2, 2025. He emphasized that the outgoing administration left no debts behind.

“The city has P12.1 billion in bank deposits that we are leaving to the incoming administration — and we are proud to say that the city has zero debts,” he said.

“We paid off all existing obligations, including the South Road Properties (SRP) loan.”

Breakdown of the city’s bank deposits: General fund: P7.9 billion, trust fund: P1.54 billion, special education fund: P2.52 billion, and dollar accounts: P2.25 million

Garcia credited the city’s strong local revenue collection, recognized by the Bureau of Local Government Finance (BLGF), as a key contributor. Cebu City collected nearly ₱6 billion in 2024, ranking No. 1 in Central Visayas for highest locally sourced revenues.

“That award alone proves the city is financially healthy… Our collection efficiency and prudent spending made this possible,” he said.

He admitted that while some awarded projects remained unpaid, including components of the Cebu City Medical Center (CCMC) and slope protection works, the funds left behind were more than enough to cover them.

“There are awarded projects we have not yet paid, like the completion of CCMC and slope protection works. But this ₱12.1 billion is more than enough to answer any obligations from my one-year tenure,” he said.

Archival’s deficit claim

Mayor Nestor Archival Sr., who officially assumed office on July 1, had said the city is facing a projected P2 to P3 billion budget deficit. This is prompting a temporary freeze on new hires and a selective contract renewal process.

“Daghan kaayong gusto magpa-renew, pero akong giistoryahan tagsa-tagsa nga for the meantime, naa koy gitan-aw nga report nga deficit ta og mga P2 billion to P3 billion karon,” Archival said earlier this week.

He said the city collected P5.49 billion in revenue during the first half of 2025 but already spent P3.6 billion, with over P2.6 billion allocated to Maintenance and Other Operating Expenses (MOOE), including JO salaries.

At that spending pace, the city could reach an annual expenditure of P11 billion against only P9 billion in projected revenue, Archival noted, adding that cuts are necessary to sustain operations.

“If we renew all their contracts, then we cannot pay their salaries… Mao ni ang challenge nato,” he said.

Selective renewals

The Human Resource Development Office (HRDO) said around 1,400 casual employees have been renewed so far, with further renewals subject to the mayor’s approval. The city has more than 8,500 employees across all statuses.

JO workers are required to submit project proposals endorsed by department heads before renewal. No outside endorsements will be entertained.

“Kinahanglan gikan gyud sa mayor, ug ang chief of staff ra ang mudala sa mga dokumento diri sa HR,” HRDO chief Henry Tomalabcad said.

Archival said that department heads were tasked with identifying critical personnel, regardless of their political affiliation. Only those deemed essential would be prioritized for renewal.

“Ang nagpili basically ang mga department heads. Dili kita ang naghatag. Silay nagahatag,” Archival explained. “Relax lang unya ta. Considering sa mga natangtang, tan-awon nato unsay inyo abilidad, and that’s where we’ll put you.”

Alleged “vulgar” spending

Amid the budget scrutiny, Vice Mayor Tomas Osmeña also raised concerns over what he called “wasteful spending” by the previous administration, citing a now-canceled purchase of a luxury P4.4-million BYD Tang SUV, which he said was P1 million overpriced.

“Baga kaayo sila’g nawng nga mupalit ug BYD… Wala sila nauwaw. They are proud,” Osmeña told reporters.

Garcia, however, denied the SUV deal pushed through, insisting the transaction was canceled and never paid for.

He emphasized that the city’s financial obligations were inherited from several past administrations, including those of Osmeña himself. /csl