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Manila falls P2.92B short of annual revenue target

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by Allan Yves Briones

The Commission on Audit (COA) flagged the city government of Manila for failing to achieve its target P14.88 billion revenue due to “unrealistic projections.” As a result, it was not able to properly implement planned programs and projects for 2018.

City Ordinance No. 8530 passed November 8, 2017 appropriated the amount of P14.88 billion for its 2018 Executive Budget, 60% from taxes, with the rest coming from permits, business and service incomes, and other fees.

According to commission’s audit report, this failure has occurred in the last three consecutive years. Since 2015, the city government’s yearly collections have fallen short of their target revenues. In 2017, Manila had a similar target budget at P14.88 billion which it also failed to meet, falling short of P4.16 billion.

“Overall, the estimated revenue for the year as not reasonably by the Local Finance Committee (LFC) since they failed to consider the actual revenue performance and significant shortfall in the previous years,” COA said.

Source: 2018 Annual Audit Report on the City of Manila

The biggest outliers, according to the report, are the city government’s projections for external investments and real property taxes (RPT). Of the expected P4.14 billion collections from RPTs, the city government was only able to collect P2.69 billion. Of an expected influx of P1.33 billion in investments, Manila has only received P279.34 million.

As a result, according to the state auditing agency, projects deemed “crucial to the efficient discharge of the City’s functions” were not all fully implemented. Appropriations for local disaster risk reduction efforts, gender and development projects and even the senior citizen and person with disability funds were significantly affected.

The commission recommended that the city government require the LFC to prepare more reasonable projected incomes and conduct periodic reviews of its collection efficiency. According to the report, the city government will act on these proposed measures.