Capitol faced with tight cash flow, P200 million in payables; burden falls on Acting Gov. Magpale

Posted on December 28, 2012

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It is business as usual at the Provincial Capitol despite political tension after Gov. Gwen Garcia was suspended from office. She has never left her office since last week. (JUNJIE MENDOZA)

It is business as usual at the Provincial Capitol despite political tension after Gov. Gwen Garcia was suspended from office. She has never left her office since last week. (JUNJIE MENDOZA)

Barely a week after Cebu Gov. Gwen Garcia’s suspension, several big bills have arrived at the Capitol for payment.

Provincial Treasurer Roy Salubre told acting Gov. Agnes Magpale the provincial government is short of cash to settle all of them immediately, obligations worth P200 million.

He presented a cash report showing P90 million available in the coffers, saying this was the “first time” in recent years that the Capitol was “short of funds to settle our payables”.

“It’s up to Ma’am Agnes how to allocate this so as not to hamper operations,” Salubre said in a news conference attended by Magpale and Provincial Board members.

The list of payables includes payment for 24 new air-conditioned tourist buses for the Suroy-Suroy tourism program (P68 million), food catering (P3.5 million), and promised incentives for barangay health workers and tanods (P60 million).

Magpale said the Province will meet all its obligations but needs to prioritize which items to pay first.

“We have to work very hard… Atoa gyud na nga bayran,” she said.

When Magpale was sworn in as acting governor last Dec. 19, she said her first priority would be to asses the state of Capitol’s finances “for the purpose of transparency and accountability.”

Soon after that, several suppliers visited her office and presented their bills. They were worried that with the new administration, they would have a hard time getting paid.

“We promised that we will meet all obligations… We already discussed how to do it,” said Magpale.

“I hope these companies understand as well as the Cebuanos why we have to be particular about expenses in the Capitol. As early as December 19, we already had an idea that there would be a cash shortage.”

“Let’s start the year right. We will prioritize our spending, identify the problems so we can find solution.”

The provincial treasurer clarified that the province is “not bankrupt”, just tight in cash flow which requires careful prioritization of spending.

“If we have to pay all of this right now, we don’t have enough,” said Salubre.

RICHEST PROVINCE

The report of a cash flow problem comes as a shock because the Garcia administration has repeatedly boasted of Cebu as the “richest province” in the country that stays “debt free” with over P28 billion in assets, a main point in her State of the Province addresses.

One of the most urgent bills came from Perfect Clean General Services, which supplies outsourced medical personnel for Cebu’s district hospitals and janitors for the Capitol and other facilities like the Cebu International Convention Center and provincial jail.

It sent a statement of account for P13,943,828.45 as of December 17.

The general manager Marietta Bucao, in a letter to Magpale, said the agency will terminate the contract when it expires on Dec. 31 “due to the slow pacing of payments which is very disadvantageous to our business.”

Bucao said the agency has not released the 13th month pay of all janitors, medical, paramedical and other allied services personnel “unless the overdue accounts are settled” for January to November 2012.

Magpale said the status of 730 outsourced personnel in the provincial government will be reviewed.

“It’s going to be tough but we just have to review their jobs one by one. If there happens to be a duplication of functions, we just have to let go some of them,” she said.

Also due for payment, P60 million for incentives of barangay health workers, tanods, and day care workers which Governor Garcia had promised.

Magpale received statement of accounts from two companies – the manpower agency and the Laguna Group of Companies for catering services in 2011 and 2012 for P3.39 million and a separate P177,933 for the Laguna Garden Cafe for services in June 2010 to the present.

NEGATIVE IMAGE

Sought for comment, Governor Garcia criticized the public disclosure of the cash report and payables as creating a ‘negative’ image of Cebu.

“I wonder if she (Magpale) stopped to think that she is destroying the image of Cebu that we have built up all these years, the image that has given Cebu all of this interest in investments, tourism.

“Everbody is coming here but she is trying to destroy that image. That shows her hatred for me and her small mindedness,” Garcia told reporters.

She said Magpale “does not understand the fiscal position” of the province and that Cebu has a Trust Fund of over P200 million to rely on, including revenues from Filinvest as monthly payment of P600,000.

Garcia emphasized that the payables cited are still “projected payable” and supported in the annual budget.

“These are still being processed… It’s alarming if you don’t understand the figure. But as I explained, we have a trust fund that’s over P200 million. Last month I said some charges were wrong. Instead of being charged against the Trust Fund, it was charged to the General Fund.”

Garcia said she was ready to “debate one on one” with Magpale about the Capitol budget in order “to save the image of Cebu because she is projecting a very unpleasant image of Cebu.”

She dared Magpale to show whether checks were already issued for the payables and to bring in her best accountants.

Salubre, the treasurer, said the cash available from the General Fund is P90.4 million of which P50 million was allocated for the Christmas bonus of all provincial employees.

The province has P61.6 million in the Special Education Fund and several trust funds amounting to P235,428,948.31.

Of the cash in bank of P387. 4 million, the province can only use P90.4 million to settle its payables.

Cebu province receives P133 million a month as its Internal Revenue Allotment (IRA) from the national government but Salubre said the share has been reduced because of the new cityhood status of Carcar, Naga and Bogo, which now gets a bigger IRA share from national taxes.

PB Member Peter John Calderon, chairman of the committee on budget and appropriations, said the province didn’t meet its revenue collection target of P2.6 million for 2012.

With this he said, “I am inclined to recommend a lower budget than the one submitted by the governor (Gwen Garcia) for enatcment as appropriation ordinance. I think several items are unrealizable,” Calderon said.

“We might as well cut the budget. Anyway, when we realize the revenues which they project to collect, we can always pass a supplemental budget later on. I think that’s the most prudent and sound fiscal management that we have to do,” he added.

The PB is on Christmas recess and will resume its regular session on Jan. 21.

“We don’t have any figure yet for the 2013 budget of the province. But, definitely it’ will be lower than the budget submitted by the Office of the Governor (Garcia). I want to be prudent to avoid what happened to our finances this year,” Calderon said.

PB Member Arleigh Sitoy was asked by Magpale to review the operations of Sugbo TV and Sugbo News, the province’s magazine.

“We are spending so much on Sugbo TV and Sugbo News,” said Sitoy, “but what was aired or published were all political gimmickry. It’s about time to fumigate the Sugbo TV and Subo News from politics and do serious development and journalism,” he said. /Ador Vincent Mayol and Carmel Loise Matus

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