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CHAPTER VII

LOCAL ADMINISTRATION AND FINANCIAL PROFILE I. BACKGROUND

Local government has traditionally been the conduit through which the national policies are implemented, including the maintenance of peace and order, delivery of social services, regulation of local development, growth and directions, and maximizing reaction effectiveness during emergencies and exigent times. However, national policies are rarely responsive to the immediate needs of the locality so that RA 7160, otherwise known as the Local Government of 1991, was enacted into law. Article 3 thereof states in effect that local government units shall enjoy genuine local autonomy to enable them to attain their fullest development as self-reliant communities.

This has been the major reason for the increase in the share of Puerto Princesa City in the Internal

Revenue Allotment (IRA) from P 599,497,813.00 in 1999 to P 665,387,749.00 in 2001 and to P 797,103,830.00 in 2005 apart from its total land area and population.

This increase in the IRA share gave the city a wider latitude in the identification and

implementation of programs and projects. Likewise, the devolution of personnel increased the city’s capabilities in the delivery of services. As a result, innovative and more effective programs have been conceptualized and put into action, earning for the city numerous prestigious awards and citations.

II. SIGNIFICANCE OF LOCAL ADMINISTRATION AND FINANCE

Local Administration and Finance refers to support services, programs and projects provided to

constituents on tax, barangay budget and disbursement, legal, planning, policy legislation and human resource management. As such, it is vital to expound the essential role and responsibility of the local organization.

ORGANIZATION

The organization is regularly surveyed to ensure that there is reasonable balance in the size of various departments, between standardization of procedures and flexibility, and centralization and decentralization of decision-making. There should be proper coordination between and among the department heads as it means providing proper balance, phasing and integrating to achieve the specific goal for development.

RESPONSIBILITY While the authority should be seen clearly down from the Chief Executive to the subordinates through a scalar hierarchy and chain of command responsibility, on the other hand, should be in proportion to the authority delegated.

PLANS AND DECISION MAKING

Planning is the basic process we use to select our goals and determine how to achieve them. Effective implementation of development plans for the city means doing the right things while efficiency in the delivery of services means doing things right.It is a process that does not end when a plan is agreed

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upon, plans must be implemented. An important aspect of planning is decision-making, the process of developing and selecting a course of action to solve a specific problem.

A. STATE OF LOCAL GOVERNANCE With the ISO 9001:2000 accreditation, The City Government has been an effective instrument where national policies are implemented and local needs addressed. As a local governent unit, efficiency in service delivery is ensured, transparency is observed and local autonomy is widely experienced. However, other stakeholders of the community which include people in general and the private sector must be mobilized and maximized to attain optimum development.

To address efficiency of service delivery, the organizational structure of the City Government as discussed has been effectively mobilized by 22 departments and offices manned by the regular and contractual employees as well as casual employees all working towards the implementation of priority development programs of the government. As a result, a number of innovative and more effective programs have been conceptualized and put into action, earning for the city numerous prestigious awards and citations. To further enhance the provision of quality public service, the city has implemented the Tax Revenue Assessment Collection System (TRACS).

Local Autonomy, as guaranteed under the Local Government Code of 1991,has been the major

reason for the increase in the share of Puerto Princesa City in the Internal Revenue Allotment (IRA).

Transparency, is likewise observed by the city government in order to ensure a dynamic and responsive local government. The City Government sought the participation of various sectors to participate in the implementation of identified programs, projects and activities all directed towards the realization of the city’s vision: A Model City in sustainable development.

a. POLITICAL STRUCTURE

The elected City Mayor, City Vice-Mayor and 12 City Councilors are administering the City

Government. Assisting the stewardship of the city are the 66 Barangay Chairmen.

i. The Chief Executive

The Local Government Code of 1991 provides that the City Mayor, as the Chief Executive of the City Government, shall exercise such powers and functions for the efficient, effective and economical governance of the city. He is responsible in overseeing the planning and management of departmental policies, programs, projects, services and activities as well as enforcing all laws and ordinances relative to effective governance. He is likewise accountable in initiating and maximizing the generation of resources and revenues for the implementation of developmental plans, programs, objectives and priorities with the end view of delivering quality basic services and providing adequate facilities primarily for the promotion of the general welfare of the city and its inhabitants.

Today, Puerto Princesa City and its citizenry is very lucky to have a leader who possesses an

extra-ordinary convincing power and great concern to protect and preserve the environment while the city progresses economically. The framework of the present administration's developmental thrust is anchored on the strategies and targets explicitly stated in the City’s Comprehensive Land Use Plan (CLUP) 2001-2010 which visualizes Puerto Princesa as a model city in sustainable development. Its core programs and projects are focused on the general objectives: KALINISAN,KAPAYAPAAN AND KAUNLARAN.

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ii. The Legislative Body

The Sangguniang Panlungsod, as the legislative body of the city, has the authority to enact ordinances, approve resolutions and appropriate funds for an efficient and effective delivery of basic services and facilities for the promotion of welfare of the constituents of Puerto Princesa City.

The executive and the legislative bodies are duty bound to exercise such authority and discretion within the provisions of the Local Code and to work harmoniously coherent with the national developmental plan for an efficient and effective local governance through the delivery of basic services and provision of adequate facilities to alleviate the standard of living of its constituents and finally attain its ultimate development.

B. OVER-ALL ADMINISTRATIVE STRUCTURE

The organizational set-up of the City Government is composed of 22 departments that give direct support to the local government through provision of quality basic services to alleviate people’s welfare. Each position in the organization has an objective that is logically related to the general goal.

In July 2006, the City government of Puerto Princesa has about 890 permanent employees or an increase of 119 positions compared to 771 in May 2000. Of the total plantilla positions of 962, 72 are still vacant. Aside from regular positions, the City Government has hired 307 contractual employees for particular undertakings, which necessitated special qualifications and skills. Majority of which are assigned as Project Managers/Supervisors of the different flagship programs and projects of the City Mayor.

Likewise, 3,600 casual employees are employed to support the regular working force in priority development programs of the City like, Oplan Linis, Bantay Puerto, Satellite Clinics and other basic community projects. Please see Table 7.1.3.

C. HUMAN RESOURCES AND RECRUITMENT POLICY/STAFFING

It is the policy of the City Government of Puerto Princesa to make city employees models of excellence and professionalism in public service through: 1) Acceding to a sound recruitment and placement process; 2) Providing opportunities for career advancement and development; 3) Granting employees welfare and benefits; 4) Institutionalizing an effective performance evaluation and appraisal system; and 5) Installing a mechanism for administrative discipline and encouraging an improved employer-employee relationship.

In support of the City’s vision to provide quality service to the constituents, the City Government through the Human Resource Management Office has been moved by this objective, “Globally competitive professional service providers committed to excellent public service.” Working within the parameters of its objective, the Human Resource Office has conducted several trainings and workshops, such as, Customers First Training For Frontliners; Seminar Workshop For New Entrants; Effective Presentation; Trainers Training; Effective Delivery For Field Workers and Community Organizers and Dynamics of Supervision with the end view of developing and upgrading skills of the City officials and workers.

In furtherance of the City government program for career development, a Learning Resource

Center (LRC) was reactivated through the HRMO to provide better service for the City Government employees. It is made accessible to the employees on its new location at the ground floor of the New City hall Building.

Working within this plausible policy, the recruitment and placement policy of the city is in accordance with the pertinent provisions of the Omnibus Rules implementing Book V of Executive Order No. 292 and other related Civil Service Laws as incorporated in its approved Merit/Selection Promotion Plan. As responsibly handled by the Human Resource Management Office (HRMO), the process installed for regular

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employment is open to all qualified individuals giving them equal employment opportunity at all levels of position in the agency, provided they meet the minimum requirements prescribed.

Consequently, the Personnel Selection Board (PSB) has been created to fill-in the regular plantilla positions. PSB is composed of the City Mayor or his duly designated representative as the Chairman, three (3) members of the Sangguniang Panlungsod, the Department Head where vacancy exists, the HRMO Department Head, and representatives from the City Employees’ Association and Executive’s Association.

Table VII.1 shows the City’s Employees Profile and the composition of manpower in its

department. It clearly reflects the dominance of male employees against female employees in terms of numbers. In 14 offices (out of the 22), females outnumbered males, which were offset by the male employees of the City Engineering Department.

Table VII.1 CITY EMPLOYEES PROFILE

City Government of Puerto Princesa, July 2006

OFFICE

C0- TER-MINUS

ELEC- TIVE

PERMA-NENT

TEMPO- RARY

M F FILLED-UP

VA- CANT

TOTAL

City Mayor’s Office 21 1 63 - 28 57 85 6 91

City Vice Mayor’s Office 5 1 2 - 7 1 8 3 11

Sangguniang Panlungsod 24 12 - - 25 11 36 15 51

Office of the City Secretary - - 40 - 14 26 40 1 41

City Administrator’s Office 1 - 8 - 3 6 9 1 10

Human Resource Mgt. Office - - 24 - 6 18 24 1 25

OCPDC - - 42 - 22 20 42 2 44

City Civil Registrar’s Office - - 6 - 1 5 6 1 7

General Services Office - - 49 - 27 22 49 - 49

City Budget Office - - 14 - 5 9 14 1 15

City Accountant’s Office - - 32 - 6 26 32 4 36

City Treasurer’s Office - - 55 - 22 33 55 3 58

City Assessor’s Office - - 27 - 17 10 27 2 29

City Information Office - - 11 - 6 5 11 2 13

City Legal Office 1 - 11 1 6 7 13 2 15

City Registry of Deeds - - 4 - 2 2 4 - 4

City Health Office - - 81 0 13 68 81 7 88

City Agriculture Office - - 36 - 20 16 36 2 38

City Veterinary Office - - 16 - 6 10 16 2 18

City ENRO - - 11 - 7 4 11 2 13

City Public Market - - 16 - 5 11 16 - 16

City Slaughterhouse - - 9 - 3 6 9 - 9

CSWD - - 29 - 3 26 29 4 33

City Engineering Department - - 231 - 203 28 231 6 237

TOTAL 51 14 824 1 455 435 890 72 962

Source: Human Resource Management Office, City of Puerto Princesa Note: As of July 2006, the City Government has 3,600 Casual Employees and 307 Contractual Employees.

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D. ORGANIZATION CHART. The chart below illustrates the hierarchy of authority effectively working and coordinating in the City Government of Puerto Princesa.

Figure VII.1

ORGANIZATIONAL CHART City Government of Puerto Princesa

-- ---------_ -----------------

The following are the functions of the offices/departments in the City Government of Puerto

Princesa:

a) CITY MAYOR’S OFFICE – This office exercises general supervision and control on all city programs, projects, services and activities; enforces all laws and ordinances relative to the general governance of the city, City Charter ordinances and all other laws applicable within the jurisdiction of the city. It has 12 divisions/sections as follows:

i. Personal Staff ii. Administrative Services iii. Community Affairs Division iv. Permits and Licenses Division

City Mayor’s Office

City Administrator’s Office

City Engineering Office General Services Office

City ENRO Office Civil Budget Office

City Accountant’s Office City Treasurer’s Office

City Assessor’s Office City Information Office

City Legal Office

City Vice Mayor’s Office

Sangguniang Panglungsod

City Human Resource Office

City Planning Office Civil Registrar’s Office

City Register of Deeds

City Health Office CSWD Office

City Agriculture Office City Veterinary Office

City Secretary

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v. Employment Services Division vi. Sports Development Section vii. Economic Enterprise Development Division viii. Communication Services Section ix. Public Market Division x. City Tourism Division xi. Slaughterhouse Division xii. Library Services Division

b) SANGGUNIANG PANLUNGSOD – It serves as the policy-making body of the city government; performs legislative and Quasi-judicial investigation services. It holds sessions and performs business in behalf of the city government. It has three (3) offices namely:

i. Office of the City Vice-Mayor ii. Office of the Sangguniang Panlungsod iii. Office of the City Secretary

c) OFFICE OF THE CITY ADMINISTRATOR – It performs services and supports the activities of the Office of the City Mayor in the dissemination and implementation of the city’s governing policies, rules, and regulations. d) HUMAN RESOURCE MANAGEMENT OFFICE – Formulates personnel policies, rules and regulations in accordance with CSC guidelines; develops a manpower plan and positive and sound recruitment program for placement of qualified applicants. It establishes a system and plan for career and personnel development programs, employee’s welfare and benefits. It has four (4) divisions, namely:

i. Administrative and Records Division ii. Human Resource Development and Training Division iii. Recruitment/Selection/Appointment and Statistics Division iv. Employees Welfare/Benefits and Personnel Services Division e) CITY PLANNING AND DEVELOPMENT COORDINATOR’S OFFICE –Formulates and sustains an integrated economic, social, physical and other development objectives and policies of the city; implements the City Zoning Ordinance and other laws, rules and regulations enacted by the Sangguniang Panlungsod and the Housing and Land use Regulatory Board. It has six (6) divisions/sections, namely:

i. Administrative Section ii. Plans and Programs Division iii. Research, Evaluation and Statistics Division iv. Zoning Division v. Project Development Division vi. Geographic Information System Division f) CITY CIVIL REGISTRY – Responsible for carrying out the civil registration program in the city pursuant to the Civil Registry Law, the Civil Code and other pertinent laws, rules and regulations issued to implement them; implements the City Civil Registry Ordinance and other laws, rules and regulations passed by the Local City Council or Sanggunian.

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g) GENERAL SERVICES OFFICE - Formulates measures for consideration of Sanggunian and provides technical assistance and support to the Mayor in carrying out measures to ensure delivery of basic services and provides adequate facilities pursuant to Section 17 of the Local Government Code of 1991 and which require general services expertise and technical support services. h) CITY BUDGET OFFICE - Provides technical staff services to the Local Chief Executive and other local officials on budgeting and other related matters. It has three (3) divisions/sections, namely:

i. Administrative Section ii. City Budget Preparation and Barangay Review Division iii. Appropriation Control Division i) CITY ACCOUNTING OFFICE – Installs and maintains an Internal Audit System of the City; prepares financial statement which may be needed in policy formulation or program implementation; and apprises the City Mayor and other local government officials on the financial condition and operation of the City. It has three (3) divisions/sections, namely: i. Administrative and Records Section ii. Barangay Services Section iii. Internal Control Division j) CITY TREASURER’S OFFICE - Stabilizes the finances of the City Government and its barangays; provides financial data, technical advice and/or staff support, efficient and progressive organization for fiscal administration particularly in the field of collection, custody and disbursement of funds, budgeting, local taxation, accounting and auxiliary or general services. It has six (6) divisions/units, namely: i. Treasury Operation Review Unit ii. Administrative Division iii. Cash Receipts Division iv. Cash Disbursement Division v. Real Property Division vi. Business Tax and Fees Division k) CITY ASSESSOR’S OFFICE - Implements the systematic assessment methods, procedures and techniques as prescribed under the Real Property Code and in accordance with the rules and regulations issued by the LGU and Department of Finance in order to ensure the equitable distribution of the realty tax burden of the property owner in the city. It has four (4) divisions, namely: i. Administrative and Records Division ii. Tax Mapping Division iii. Appraisal Division iv. Building and Machineries Division l) CITY LEGAL OFFICE - Formulates measures related to legal services and provides legal assistance to the Governor or Mayor in carrying out the delivery of basic services; exercises such other powers and performs such other duties and functions in the interest of the LGU related to upholding the rule of law. It has two (2) divisions, namely: i. Legal Research Division ii. Inquiry and Investigation Division

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m) CITY REGISTER OF DEEDS - This office is the legal custodian and official repository of all certificates of title (both original certificate of titles and transfer certificate of titles, both registered and unregistered) of all documents affecting lands as well as chattels within the Puerto Princesa City. n) CITY HEALTH OFFICE - Plans, organizes, directs and coordinates all functions and activities under the direction of the City Mayor of the City Health Plan, its implementation and realization. It looks after the medical and health needs of its community while promoting awareness and self-reliance It has six (6) divisions/sections, namely: i. Administrative Division ii. Medical Services Division iii. Nursing Services Division iv. Dental Services Section v. Disease Control Section vi. Social Services Division o) CITY POPULATION OFFICE - This office functions with the aim of achieving an improved quality of life for all members of the community by managing growth and distribution of population. p) CITY SOCIAL WELFARE AND DEVELOPMENT - Provides interventions/opportunities that will uplift the living conditions of the distressed and disadvantaged individuals, families, and group of communities and enable them to become self-reliant and actively participate in community development. It has five (5) divisions/sections, namely:

i. Community Welfare and Development Division ii. Emergency Services Section iii. Child and Youth Welfare and Development Division iv. Youth Welfare Section v. Child Welfare Division q) CITY AGRICULTURE OFFICE - Formulates measures and provides technical assistance to the City Mayor to ensure the delivery of basic agricultural services; ensures that assistance and access to resources in the production and processing of agricultural and fisheries and marine products are extended to farm families and fisherfolks. It has three (3) sections, namely: i. Agricultural Extension Services ii. Fisheries services Section iii. Home and Management Services Section r) CITY VETERINARY OFFICE - This embraces the animals health division, disease prevention and control, animal dispersal program, rabies eradication drive, upgrading of animal breeds through artificial insemination and other programs assigned by the City Government. s) CITY ENVIRONMENT AND NATURAL RESOURCES OFFICE - Provides technical assistance on all matters relative to the protection, conservation, maximum utilization, application of the appropriate technology and other matters pertaining to the environmental and natural resources.

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t) CITY ENGINEERING OFFICE - Provides and accomplishes infrastructure projects and activities, public works and Engineering matters that shall develop the growth of the City of Puerto Princesa. Under the Office of the City Engineer –Administrative it has eleven (11) divisions/sections, namely:

i. Administrative Division ii. Clerical and Records Section iii. Property and Supply Section iv. Security Section v. Planning, Designing and Programming Division vi. Public Services Division vii. Construction and Maintenance Division viii. Construction Section ix. Maintenance Section x. Building and Industrial Safety Section xi. Housing Development Division While the Office of the City Engineer-Motorpool has only one division, that is the Motorpool Division.

E. EXTENT OF COORDINATION

Development planning in essence is a combined effort of various offices in the sectors. Each office contributes its share in conceptualizing the directions and forms towards development.

Thus, through the Office of the City Mayor, the activities, plans and programs of the different offices

geared towards the major objectives of the City government are coordinated, integrated and implemented.

F. PROJECT IMPLEMENTATION AND MONITORING

Projects are normally identified based on the strategic development plan which sets the direction of

development and delivery of services. Projects are the vehicle by which the plan is implemented and objectives reached.

Planning the city development projects follows the mechanics of the City Development Investment

Programs (CDIP). The CDIP serves as the medium range development plan and used as the basis in allocating funds for development projects. Projects and programs are identified and prioritized in a public-private sector representation through sectoral planning based on the vision, objectives and strategies of the City. Approved and funded projects are implemented by the Department Heads concerned or Program Managers.

The City Planning and Development Coordinator’s Office ensures that formulation, integration, and

coordination of development plans must be participated in by stakeholders. An example is the documentation of the Comprehensive Land Use Plan (CLUP) for 2001-2010 wherein major problems, issues, and concerns were based from sentiments of the entire public, the Barangay Chairmen, people’s organization, government agencies and non-government organization.

The participation of NGO’s in the City Government programs is quite significant. This is primarily

because the planning and implementation of programs, such as, Oplan Linis Program and Pista Y Ang Kagueban are overwhelmingly participated in by the non-government organizations and the general public.

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Listed below are the 73 Accredited Non-Government Organizations (NGO) actively involved with the City Government of Puerto Princesa (As of April 30, 2006): 1. House of Andrew Foundation, Inc. 2. Social Action Development Foundation, Inc. 3. Samahang Magtitinda ng Pamilihang Bayan 4. Haribon Palawan,Inc. 5. Association of Pinag-sarong Bicolanon sa Palawan 6. Federation of Senior Citizen of Puerto Princesa 7. Buklod ng Magtitinda ng Isda ng Puerto Princesa 8. Kabalikat 9. Paragua Foundation, Inc. 10. Puerto Princesa Grains Retailers Association, Inc. 11. First Palawan Development Foundation, Inc. 12. Task Force Detainees of the Philippines, Palawan Unit 13. Palawan Nature Conservation Foundation, Inc. 14. Budyong Rural Development Founsation, Inc. 15. Interglobe Multi-Purpose Cooperative, Imc. 16. New Fronmtier Multi-Purpose Cooperative, Inc. 17. Kalipunan ng mga Samahan ng mga Mamayan (KASAMA) 18. Nagkaisang mga Tribu ng Palawan 19. Foundation for People’s Livelihood and Welfare, Imc. 20. Ligaya ng Buhay Community Development Foundation, Inc. 21. Palawan Organization for Natural Resources Conservation 22. APO Palawan Tribe Foundation, Imc. 23. Tubbataha Foundation, Inc. 24. Puerto Princesa Indigenous Association for Forest Conservation 25. Cocepciom Upland Farmer’s Association For Forest Conservation 26. Palawan Share a Hope Foundation 27. Pandakayang Kooperatiba ng Palawan 28. Extra Health Care Association 29. Puerto Princesa Seaweed Farmers Multi-Purpose Cooperative 30. Natural and Historical Foundation of Palawan and City of Puerto Princesa 31. Ulugan Bay Foundation 32. Kalinga sa Palaweno Foundation, Inc. 33. Sambayanang mga Tagbanua Kat Barangay Simpocan 34. Puerto Princesa Federation of Agri-Base Cooperative (PPCFAC) 35. 21st CenturyMulti-Purpose Cooperative 36. Liberty Fishermen Multi-Purpose Cooperative, Inc. 37. Palawan Transport Service Cooperative 38. Charity Womens Association of Puerto Princesa 39. JACANA Tricycle Operators and Drivers Association, Inc. 40. Bagong Lipunan Community Association, Inc. 41. Palawan NGO Network, Inc. 42. Samahang Magkakapitbahay sa Batangay Tagumpay, Inc. 43. Palawan Matine Products Shippers Association, Inc. 44. Palawan Fishernet Operators and Fisheries Association, Inc. 45. Airline Shippers Association of Palawan, Inc.

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46. Palawan Compressors Fishing Operators and Divers Association, Inc. 47. Barangay San Rafael, Tanabag and Concepcion Multi-Purpose Cooperative 48. Community Based Forest Management Program 49. Honda Bay Boatmen Association, Inc. (HOBAI) 50. Palawan Center for Appropriate Rural Technology (PCART) 51. Nagkakaisang Tribu ng Palawan, Inc. (NATRIPAL) 52. Pangkalusugang Kooperatiba ng Palawan (PKP) 53. JACANA Coastal Residents Development Association, Inc. 54. Trescom Citizen Neighborhood Association, Inc. 55. Samahan ng mga Maliliit na Mangingisda ng Binduyan, Inc. 56. Tarabanan Fishermen Association, Inc. 57. Budyong Rural Development Foundation, Inc. 58. Alayka-Palawan, Inc. 59. Palawan Farmers Allied Agricultural Development Association,Inc. 60. Bangsa Palawan Philippines, Inc. 61. Philippine Rural Reconstruction Movement 62. Puerto Princesa Muslim Womens Association, Inc. 63. Zhakbah Islamic Association, Inc. 64. Golden Valley Teachers Village Tricycle Operators and Drivers Association, Inc. 65. Foundation for Kabalikat Development and Environmental Inc. 66. South Sea Aqua Ventures 67. IRREN Foundation 68. Taytay sa Kauswagan, Inc. 69. Crispulo and Fabiana Pilapil Foundation, Inc. 70. Alay Lakad Foundation, Inc. 71. Foundation Dantiago Cooperative 72. Pandan Multi-Purpose Cooperative 73. Tagbalay Foundation

While project monitoring and evaluation is undertaken and limited only to the project outputs.

G. QUALITY MANAGEMENT SYSTEM (ISO 9001:2000)

After several months of preparation and hardwork, the City Government of Puerto Princesa is now

one of the few local government units in the country, which is at par with its global counterparts for having been audited and registered as meeting the requirements of ISO 9001:2000. The scope of registration covers the Community Public Services of the City Government and its offices.

This certification ensures both external and internal benefits that will redound to people in general.

Among the external benefits are: (1) Higher perceived quality; (2) Improved Customer Satisfaction; (3) Competitive Edge and (4) Reduced Customer Quality Audits. While the internal benefits include: (1) Better Documentation; (2) Greater Quality Awareness; (3) Positive Cultural Change; (4) Enhanced Intra-company Communications and (5) reduced Rework.

With this accreditation, the City Government is now willing to accept greater challenges and

position itself differently even if it is a government institution.

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III. BUDGETARY

A budget is a tool for development and a blueprint of strategic policy framework. Annual/supplemental budget of the local government unit shall as much as possible be consistent with national development plans, goals and agenda without necessarily violating the principle of autonomy.

The whole annual and supplemental budgets shall be dedicated to sustainable human

development in order to achieve the twin goals of eliminating poverty and promoting economic growth. Development planning shall not br limited to projects and activities to be funded by the 20 percent of the IRA share.

The local government units shall prepare a Local Development Plan (LDP), a Local Development Investment Program (LDIP) and an Annual Investment Program (AIP).

The Local development plans shall be made operational through the Annual or Supplemental Budgets. Local budgets shall be policy-driven which will carry out the smooth execution of planned projects to pursue the attainment of development objectives.

The Annual Investment Plan (AIP) contains the priority programs and projects to implement the

development thrusts of the city administartion as approved by the City Development Council CDC). The AIP is culled from the City Development Investment Plan (CDIP) or the medium development plan, one of the implementing tools of the Comprehensive Land use Plan (CLUP).These are requisite documents prior to the preparation of the annual and supplemental budgets which are essential in the formulation of objectives, targets, budget policies and strategies for the budget year, refer to Figure VII.2.

Figure VII.2

PLAN-BUDGET LINK MODEL

PLAN Development

Planning

( 5-10 years)

Investment

Programming

(3 years)

Budgeting

( 1 year)

Source: DBM Updated Budget Operations Manual for Local Government Units

Development Issues/

Current Reality

Vision/Goal Strategic

Directions

Program Structure

* Projects

* Activities (P/P/As)

Resource Reqs

Priority P/P/As

Allocation of Resources

Major Final Output

Performance

LINK

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This Manual likewise provides that the entities involved in the various phases (Refer to Figure VII.4.) of local government budgeting are as follows:

A. Local Development Council B. Expanded Local Finance Committee C. Local Chief Executive D. Sangguniang Panglungsod / City Council E. Department Heads/Chief of Offices F. City Planning and Development Coordinator G. Treasurer H. Budget Officer

I. Accountant J. HRMO

The budget process consists of five (5) phases. These are: (A) Budget Preparation; (B) Budget

Authorization; (C) Budget Review; (D) Budget Execution; and (E) Budget Accountability, refer to Figure VII.3.

Figure VII.3 THE BUDGET CYCLE

A. BUDGET PREPARATION

The budget preparation starts with the issuance of the local government budget call, cost

estimation, preparation of budget proposals, executive review of budget proposals and finally the preparation of the budget message, local expenditure program and budget of expenditures and sources of financing. These three (3) documents shall consist the Executive Budget to be submitted to the Sangguniang Panglungsod, refer to Table VII.2.

Budget

Preparation

Budget

Authorization

Budget

Accountability

Budget

Execution

Budget

Review

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Table VII.2 BUDGET PREPARATION CALENDAR

City of Puerto Princesa

ACTIVITY TARGET DATES

1. Budget Call Issuance July

2. Preparation/Submission of Budget Proposal July-August

3. Pre-Technical Budget Hearing August

4. Consolidation/Preparation of Executive Budget September

5. Submission of Executive Budget October

B. BUDGET AUTHORIZATION The second phase in the process starts from the time the local chief executive submits the budget to the Sanggunian for legislative deliberation and ends with the corresponding enactment of the appropriations ordinance. C. BUDGET REVIEW

The primary purpose of budget review is to determine the compliance of the enacted appropriation ordinance with the requirements set forth in the Local Government Code.

D. BUDGET EXECUTION

The fourth phase involves the release and actual disbursement of funds appropriated for the performance of functions and undertaking of projects and activities.

E. BUDGET ACCOUNTABILITY

It involves the accurate recording and reporting of LGU’s income and expenditures and the evaluation of LGU’s physical and financial performance.

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Figure VII.4

PLANNING-BUDGETING CYCLE

Local Chief City

Council/ Development

Executive/ Council/

Local Finance Sangguniang

Committee/ Panglungsod/

Council/ Civil Society/

Sangguniang Private Sector

Panglungsod

Local Chief Executive (Local Finance Committee)

Sangguniang Panglungsod Reviewing Authority Source: DBM Updated Budget Operating Manual for Local Government Units

It is imperative that 20% of the revenue from the central government, or the so-called Internal

Revenue Allotment (IRA), is utilized for funding development programs, projects and activities of the local government units.

Despite the austerity measures adopted by the national government due to ballooning deficit and huge public sector debt, the City Government of Puerto Princesa was not negatively affected. Instead, it responsibly executed its mandate to lead and to spur the economy in order to create more business and employment opportunities for its people.

Thus, year 2005 has been a boom year for the City of Puerto Princesa vis a vis infrastructure

development. Within this period, major constructions to provide people with quality necessary facilities were conceptualized, accomplished and made functional. Year 2006, has been envisioned to be the continuation of this developmental thrusts anchored on the strategies and targets laid out in the City’s Medium Term Development Investment and the Comprehensive Land Use Plan 2001-2010 focused within the parameters and attainment of the general objectives: KAUNLARAN, KAPAYAPAAN AND KALINISAN. Over the medium term, the city has undertaken the following programs and projects: a. Kabuhayan Programs for the unemployed b. Water for rural barangays c. Agriculture and Fishery production d. Free health and social services for the poor e. Housing projects f. Rehabilitation and asphalting of roads g. Construction and renovation of public school buildings h. Tourism and environmental protection projects, with emphasis on:

Development Planning

(5-10 years) Investment

Programming

(3 years)

AIP

-MFOs,PIs/ Targets

(1 year)

Budget

Preparation

Budget

Accountability

Budget

Execution

Budget

Review Budget

Authorization

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i. Improvement of all parks and plazas, including boulevards ii. Decongestion of Poblacion iii. Completion of coastal development projects

The city’s initiative is geared towards the completion of these programs and projects with the end

view of rejuvenating the local economy.

During the last five years (FY 2001-2005), the budget for the city has a fluctuating trend as clearly presented in Table VII.3. There has been an average decrease of 7.54% in budget allocation for FY 2002 and 2004 while the city increased its budget in 2003 and 2005 at an average of 24.19%.

Table VII.3 CITY BUDGET FOR THE RECENT 5 YEARS

City of Puerto Princesa FY 2001-2005

YEAR BUDGET

2005 1,400,165,000.00

2004 925,923,884.77

2003 955,479,163.00

2002 816,670,113.00

2001 913,873,465.72 Source: City Budget Office While Table VII.4 shows the increasing trend in the budgetary allocations of the City Government

of Puerto Princesa from 1996 to year 2000. There is an average annual budget increase of 13.78% or a yearly increase of 5.91%, 22.86%, 12.83%, 13.5%, respectively.

Table VII.4 PUERTO PRINCESA CITY BUDGET FOR THE PAST 5 YEARS

FY 1996-2000

YEAR BUDGET

2000 994,092,158.87

1999 859,853,855.46

1998 749,553,649.34

1997 578,167,907.75

1996 543,961,716.59 Source: City Budget Office, City of Puerto Princesa

IV. FINANCIAL PROFILE

The Financial Profile indicates the state of city’s finances showing the trends and patterns of its revenues and expenditures for FY 2001-2005. Puerto Princesa City has been classified as a first class city. Like most other cities, Puerto Princesa sourced its income mainly from the Internal Revenue Allotment (IRA).This is due to the vast land area which are mostly public in nature and the city’s development constraints, such as, our fragile environment.

A. REVENUE PROFILE

Under this profile, sources of revenues are classified according to sources, local and external, and further disaggregated by major categories, as shown below.

161

Table VII.5 PUERTO PRINCESA CITY REVENUE PROFILE

FY 2001-2005

Item 2001 2002 2003 2004 2005 1. Local Sources

1.. Tax Revenue 1.1.1. Real Property Taxes

1.1.2. Business Taxes

1.1.3.Miscellaneous Taxes

1.2. Non-Tax Revenues

1.2.1. Fees and Charges

1.2.2.EconomicEnterprises

1.2.2.1. Public Market 1.2.2.2.Slaughterhouse

1.2.2.3. Bus Terminals

1.2.2.4.Othereconomic Enterprises

1.2.3. Others

Discounts on Real

Property Tax/SEF

2. External Sources 2.1. Internal Revenue

Allotment ( IRA)

2.2. Share from National Wealth

2.3. Grants and Aids

2.4. Others

T O T A L R E V E N U E

P 26,709,972.22

24,700,304.79

2,609,048.01

8,650,411.49

5,660,334.92 3,194,020.87

-

1,324,395.81

9,289,165.27

665,387,749.00

77,815.35

-

-

P 747,603,217.73

P 34,360,061.65

24,367,230.86

3,320,029.28

10,312,032.25

6,380,098.52 4,684,081.71

-

1,510,550.65

3,658,250.39

(2,931,979.36)

709,188,616.00

-

-

1,352,647.41

P 796,201,619.36

P 28,006,422.76

25,476,704.49

5,780,448.42

11,761,313.50

6,579,580.08 4,717,215.15

207,853.00

2,831,361.86

1,264,854.58

(3,622,241.04)

744,329,068.00

7,812,500.00

2,000.00

P 835,147,080.80

P 36,658,479.14

30,151,554.24

17,712,373.73

4,320,632.84

5,782,558.89 5,059,581.93

222,774.00

1,360,966.17

173,618.63

(3,650,948.31)

744,446,419.00

-

217,840.55

P 842,455,850.81

P 50,275,817.50

34,931,863.40

30,141,106.18

5,962,663.55

7,752,682.45 4,464,097.99

1,382,479.16

851,461.41

349,782.66

(6,150,081.24 )

797,103,830.00

-

-

743,885.36

P 927,809,588.42

Source: City Accounting Office, City of Puerto Princesa

It can be gleaned from Table VII.5 that the city’s income for the FY2001-2005 are derived from the

following sources: (1) Share from Internal Revenue Allocation; (2) Local Taxes, namely: Real Property Taxes, Business Taxes and Miscellaneous Taxes; (3) Non-Tax Revenues particularly from Fees and Charges and Economic Enterprises;(4) Share from National Wealth; (5) Grants and Aids and Other Receipts ( PCSO, GMA and Provincial Government).

162

Figure VII.5– Local Income by Source

In 2005, among the internally sourced revenues, Tax Revenues consist of Real Property, Business and Miscellaneous Taxes account for 84.745 % of the total local income while Non-Tax Revenues, such as, Fees and Charges and Receipts from the city’s Economic Enterprises, such as, public market, bus and jeepney terminal, fishports, slaughterhouse, etc. contribute at least 4.380 % and 10.616 % respectively of the total local revenues for the fiscal year. Please refer to Figure VII.5.

From the items of the local sources, revenues collected from RPT and Business Taxes are

considered stable since it marked an increase of more than 5% annually. Noteworthy is the significant rate of increase in 2005 from 2004 collection of the Real Property Taxes and Business Taxes at a rate of 37.96 % and 15.85 % respectively. This can be credited to the efficient implementation of the Tax Revenue Assessment Collection System (TRACS). This may likewise be attributed to other factors, such as, close coordination between the City Treasurer’s Office and City Assessor’s Office in terms of intensive tax collection notwithstanding the minimal rates of taxes being imposed by the City Government and the initiative on the part of the City Assessor’s Office to strictly require the updated payment of taxes prior to the issuance of the owner’s Tax Declaration over his property. Business One Stop Shop (BOSS) has been the venue for the processing of other requirements for business permit s and licenses, such as, DTI, SSS, Philhealth, and others.

L o c a l In c o m e b y S o u r c e

F Y 2 0 0 5

R e a l P r o p e r t yT a x e sB u s in e s s T a x e s

M is c .T a x e s

F e e s & C h a r g e s

E c o n o m icE n te r p r i s eO th e r s

163

Table VII.6 PERCENTAGE OF THE LOCAL REVENUE WITH THE TOTAL REVENUE


YEAR TOTAL REVENUE LOCAL REVENUE PERCENTAGE

2001 P 747,603,217.73 82,137,653.38 10.99 %

2002 796,201,619.36 88,592,335.31 11.13 %

2003 835,147,080.80 86,625,753.84 10.37 %

2004 842,455,850.81 101,442,539.57 12.04 %

2005 927,809,588.42 136,111,954.30 14.67 %

Source: City Accounting Office

In 2005, the Local Revenue amounting to P 136,111,954.30 comprises 14.67 % of the total

revenue, which has remarkably increased from P 82,137,653.38, or 10.99 % of the total revenues collected in 2001. However, in 2003, local collection has been adversely affected by the declaration of tax amnesty, refer to Table VII.6.

On the average, local taxes, comprising tax revenue and non-tax revenue is 11.84 % of the total

revenues generated from FY 2001 to 2005, refer to Figure VII.6. Figure VII.6 – Percentage of Local Income to Total Income

Like most other cities, the city is mainly dependent on the Internal Revenue Allotment (IRA) at an

average rate of 88.29 % for FY 2001-2005. Please refer to the TableVII.7.

Percentage of Local Income to Total

Income

FY 2001-2005

0

200000000

400000000

600000000

800000000

1000000000

1200000000

2001 2002 2003 2004 2005

Local Income

Other Sources of Income

164

Table VII.7 PERCENTAGE OF THE INTERNAL REVENUE ALLOTMENT (IRA)

WITH THE TOTAL REVENUE City of Puerto Princesa

FY 2001-2005

Year Total Revenue IRA Percentage

2001 P 747,603,217.73 665,387,749.00 89.00 %

2002 796,201,619.36 709,188,616.00 89.07 %

2003 835,147,080.80 744,329,068.00 89.12 %

2004 842,455,850.81 744,446,419.00 88.36 %

2005 927,809,588.42 797,103,830.00 85.91 %


This increase in the share in IRA gave the city greater latitude in the identification and implementation ofpriority programs, projects and activities to boost the city’s campaign as the premier eco-tourist destination as well asbeing the sports and conference capital of the Philippines.

The increasing trend in the IRA receipts resulted to an increase in the total income of the City Government from P 747,603,217.73 in 2001 to P 927,809,588.42 in 2005 at an average rate of 5.21 % for FY 2001-2005. The City’s expenditures are augmented from the local revenue as well as the external sources, refer to Figure VII.7.

Figure VII.7– Total Revenue FY 2001-2005

B. EXPENDITURE PROFILE

This profile shows the patterns and trends of expenditures by functions/sectors and by allotment

classifications incurred by the city over the period 2001-2005 as discussed in the succeeding pages, refer to Table VII.8.

Total Revenue FY 2001-2005

City of Puerto Princesa

0.00

200,000,000.00

400,000,000.00

600,000,000.00

800,000,000.00

1,000,000,000.00

2001 2002 2003 2004 2005

165

Table VII.8 CITY EXPENDITURE BY FUNCTION/SECTOR


Item 2001 2002 2003 2004 2005

General Public Service P198,512,410.56 P231,746,227.68 P235,266,209.55 P194,105,443.34

P236,648,335.69

Education 10,651,295.37 9,672,282.92 11,612,284.88 13,255,689.94 51,695,713.09

Health, Nutrition and Population Control

42,889,291.66 40,447,251.01 52,437,054.19 41,047,995.77

46,046,240.01

Housing and Community Development 104,183,158.24 104,333,926.35 192,837,803.41 78,532,093.12

41,860,772.69

Social Welfare 5,622,484.31 16,808,943.27 22,992,840.59 9,299,249.70

14,337,459.20

Economic Services 74,287,918.50 72,215,848.08 94,750,602.20 70,061,357.32

124,116,196.98

Other Developmental Services

60,919,142.26 34,924,872.50 52,816,929.73 48,899,283.80

31,784,885.84

Other Budgetary Obligation

417,249,513.41 226,397,944.73 317,918,369.90 404,508,506.89

584,876,736.45

T o t a l P914,315,214.31

P736,547,296.54

P980,632,094.45

P859,709,619.88

P1,131,366,339.95


The City’s Expenditures for FY 2001-2005 consists mainly of the following functions/sectors: (1) General Public Services; (2) Education; (3) Health Nutrition and Population Control; (4) Housing and Community Development; (5) Social Welfare; (6) Economic Services and (7) Other Budgetary Obligations,

It can be gleaned from the table that the bulk of the city’s expenditures by functions/sectors is expended for other budgetary obligations in the amount of P 417,249,513.41 or 45.64 % of the total expenditure in 2001 which has increased to P 584,876,736.45 or 51.70 % of the total expenditure in 2005 which has been utilized for transfer of loans ( green bonds and loan funding the E Governance Project) from Landbank to Veterans Bank and other project costs, like the Coastal Development and Reclamation Project, completion of Green Homes and Sanitary Landfill.

The City has likewise spent most of its income for General Public Services, which has accounted for P 198,512,410.56 in 2001 and P 236,648,335.69 in 2005 at a rate of 21.71 % and 20.92 % respectively of the total expenditures for FY 2001 and 2005, refer to Table VII.8.

166

Table VII.9 CITY EXPENDITURE


Item 2001 2002 2003 2004 2005

Personal Services P298,157,400.45 P286,883,021.05 P344,743,823.92 P368,563,641.46 P353,003,946.54

Maintenance and Other Operating Expenses 245,582,859.85 169,159,908.62 336,824,216.45 282,671,653.81 451,263,608.37

Capital Outlay 370,574,954.01 280,504,366.87 299,064,054.08 208,474,324.61 327,098,785.04

T o t a l P914,315,214.31 P736,547,296.54 P980,632,094.45 P859,709,619.88 P1,131,366,339.95


Based on the table showing the City’s Expenditures by Allotment for 2001-2005, Personal Services

amounting to P 298,157,400.45 or 32.61 % of the total expenditure in 2001 increased to P 353,003,946.54 or 31.20 % of the total expenses in 2005. On the other hand, the Maintenance and Other Operating Expenditures increased to P 451,263,608.37 or 39.89 % in 2005 from P 245,582,859.85 or 26.86 % in 2001. While the Capital Outlay which accounted for P 370,574,954.01 or 40.53 % of the total expenditures in 2001 decreased in the amount of P 208,474,324.61 or 24.25 % of the expenditures in 2004. However, it has accounted for 28.91 % of the total expenditures in the amount of P 327,098,785.04 in 2005, refer to Table VII. 9.

Figure VII.8 – City Expenditure by Item

Figure VII.8 – Comparison of City Expenditure

The graph (Figure VII.8) shows that the City Government expends most of its income for Maintenance and Other Operating Expenses (MOOE) to enhance provision of quality services to the public and to ensure loan repayments. It likewise allotted revenues for Personal Services to accommodate the

Comparison of City Expenditure

FY 2001 and 2005

0

200000000

400000000

600000000

PS MOOE CP

2001

2005

CITY EXPENDITURE BY ITEM

FY 2005

31%

40%

29% Personal Services

Maintenance and Other Operating Expenses Capital Outlay

167

salary and benefits of regular personnel as well as the wages of casual and contractual employees who support the regular workforce. However, there is a decrease in the amount allocated for Capital Outlay since projects are already due for completion in 2004 and the new as well as the on-going projects were accommodated in 2005.

Table VII.10

SCHEDULE OF LOANS PAYABLE City of Puerto Princesa

2002-2005

Lending Institutions Year Total Amount of Loan Released

Total Payments Made

Balance

DBP, World Bank (Premiumed), ADB

(PRMDP), PVB,LBP, PNB- Trust Banking Group Green Bonds

2002 P 519,738,310.16 P 79,661,594.19 P 402,663,405.32

2003 682,211,815.60 74,810,858.69 542,385,402.20

2004 830,383,195.59 218,154,975.08 665,618,935.85

2005 1,397,966,302.11 437,185,994.21 853,298,871.13


It can be gleaned from the table (Table VII.10) that the city has incurred a total of P

1,397,966,302.11, which has increased at an average rate of 27.42 % annually. That out of the total amount of loan released, the city has made payment of at least P 437,185,994.21 for the covered year leaving a balance of P 853,298,871.13 in 2005. The City’s debt ratio is estimated at 18.08% for the year 2005.

Table VII.11

LOCAL REVENUE AND EXPENDITURE City of Puerto Princesa

FY 2001-2005

Year Revenue Expenditure Cumulative Result of Operations

2001 P 747,603,217.73 P 914,315,214.31 P-(166,711,996.58)

2002 796,201,619.36 736,547,296.54 59,654,322.82

2003 835,147,080.80 980,632,094.45 -(145,485,013.65)

2004 842,455,850.81 859,709,619.88 -(17,253,769.07)

2005 927,809,588.42 1,131,366,339.95 -(203,556,751.53) Source: City Accounting Office, City of Puerto Princesa

Table VII.11 shows that the total revenue of the city has increased from P 747,603,217.73 in 2001

to P 927,809,588.42 in 2005 at an average rate of 5.6 % annually. However, the city has expended more than the total revenue collection in 2001 to 2005 except 2002, thus, incurred a deficit at an average rate of -(15.87 %). While in 2002, the city has realized an income amounting to P 59,654,322.82 or 7.49 % of the total revenue for the fiscal year.

168

Figure VII.9 – Revenues and Expenditures

The graph (Figure VII.9) shows the cumulative result of operations for the FY 2001-2005. Puerto Princesa is looking forward for a city which is enjoying fiscal autonomy as mandated by RA

7160, otherwise known as the Local Government Code of 1991. To give the City Government the proper perspective to set its goal and priorities for every fiscal year, the City Accounting Office has made the city’s financial projection for FY 2007-2011. Please refer to the table below.

Table VII.12

PROJECTED NET NEW FINANCING Puerto Princesa City

FY 2007-2011 2007 2008 2009 2010 2011

Projected Operating Revenue

1,071,620,074.62 1,178,782,082.09 1,296,660,290.30 1,426,326,319.32 1,568,958,951.26

Projected Operating Expenditures

886,704,979.28 931,040,228.25 977,592,239.66 1,026,471,851.64 1,077,795,444.22

Gross Cash Flow from Operation

184,915,095.34 247,741,853.84 319,068,050.64 399,854,467.68 491,163,507.03

Debt Service on Current Obligations

148,343,800.34 146,860,362.34 145,391,758.72 143,937,841.13 142,498,462.72

Gross Fund-After Debt

36,571,295.00 100,881,491.50 173,676,291.92 255,916,626.55 348,665,044.31

Less Project Recurring Capital Expenditure

176,351,072.67 185,168,626.31 194,427,057.62 204,148,410.50 214,355,000.00

Less proposed Capital Expenditure

346,300,000.00 352,900,000.00 206,500,000.00 210,100,000.00 211,700,000.00

Net New Financing Capital

(486,079,777.67) (437,187,134.81) (227,250,765.70) (158,331,783.95) (77,389,955.69)


REVENUES AND EXPENDITURES

FY 2001-2005

Puerto Princesa City

0

200000000

400000000

600000000

800000000

1000000000

1200000000

2001 2002 2003 2004 2005

Revenues

Expenditures

169

V. PLAN IMPLEMENTATION TOOLS The City is currently implementing the following tools to effectively and efficiently attain its major

developmental thrusts:

A. TAX REVENUE ASSESSMENT AND COLLECTION SYSTEM (TRACS)- a computerized system for recording information on real property, industrial and commercial establishments and all other processes to help the City Government: (a) Generate more local revenue; (b) Reduce dependency on the national government Internal Revenue Allotment (IRA); (c) Improve delivery of basic services and (d)Ensure transparency in the financial operations within these functional areas, namely: (1) On-line Issuance of Business Permit and (2) Real Property Tax Assessment and Collection. Transactional efficiency gained in the implementation of TRACS are as follows: (1) In terms of quality: 100 % accuracy and reliability in the assessment and computation of taxes and fees and encoding of reports and (2). In terms of time: guaranteed fast and efficient processing of transactions provided all requirements are complied with.

B. GEOGRAPHIC INFORMATION SYSTEM (GIS)- It is an effective planning tool primarily responsible for map generation and land use delineation.

C. ZONING ORDINANCE- The Revised Zoning Ordinance No.163 based on the original land use plan has been guiding the development of the city since year 2000. Please see Annex VII. 1(Revised Zoning Ordinance 163).

D. BUILDING CODE- The city government generally adopts the National Building Code of the Philippines and its implementing rules and regulations as provided under Presidential Decree No. 1096.

E. ORDINANCE ON TAXATION- Ordinance No. 56, an Ordinance providing for the revision of assessments, classification and valuation of real properties located in the City of Puerto Princesa, as amended by Ordinance No. 75-94. Please see Annex VII.2 (Ordinance No. 56, as amended).

F. OPLAN LINIS- Approved on July 19, 1991, Ordinance No. 163-91, an Ordinance prohibiting the dumping of waste refuse garbage, non-biodegradable objects and other waste materials in any places in the street and other places not otherwise designated as dumping place and providing penalties thereof. Please see Annex VII.11(Ordinance No. 163-91). Through the Oplan Linis Program, the City of Puerto Princesa has been awarded the Hall of Fame Award for being the “Cleanest and Greenest City in the Philippines.

VI. MAJOR ISSUES - The Society Today

Puerto Princesa is a progressing city as an eco-tourist destination. As such, it has expended most of its income for support facilities to enhance the eco-tourism drive with much less return of investment at present. More evident about this is the fact that most of the projects do not directly and primarily take into consideration the issue on poverty alleviation. These projects have been the major factor for the hiring of more casual and contractual employees which are paid out of the Personal Services item of the city’s expenditures. However, in the implementation of its development thrusts, it is bound to go on a slow phase due to certain restrictions provided to guard the environment.

The financial profile shows that the city is dependent on the Internal Revenue Allotment (IRA) just

like the other cities in the country. The city’s collection system as well as initiatives to reduce IRA dependency has resulted to appreciation of income generated from local sources. However, the city’s income generating capacity has not been totally maximized. This may be attributed to the following

170

circumstances: (1) The city has operated several economic enterprises which are supposed to be self-liquidating and should yield more revenues for the city, however, they are still dependent on the city’s annual budget for their operations. They have generated income, however, it is still meager to enhance the local economy. These enterprises have engaged only in a few economic or income generating activities. There is an urgent need to explore on some ways and means to maximize these offices. Income targets should likewise be set for these enterprises to improve on their performance as self-liquidating projects; (2) There are certain local legislations which are expected to boost the economy of the city but turned out not to be fiscally sound, such as declaration of tax amnesty which has rather negative impact and worked as disincentive to taxpayers paying promptly and perpetuated complacent attitude among taxpayers; (3) Moreover, legislation for purposes of updating and modifying tax rates as mandated by the law to be revised every three (3) years has not been fully supported and enacted to date notwithstanding the proposal submitted by the concerned office; (4) Pieces of delinquent property are not disposed of accordingly pursuant to the provisions of RA 7160, otherwise known as Local Government Code of 1991.

It appears from the record that expenditures exceed the city’s income. An issue worth taking into

consideration is the city’s huge budget for some programs and projects which in their nature are not revenue generating. Rather they just add to the bulk of the city’s expense. Hence, there is a need to consider the modification of programs and projects and adoption of sound measures and strategies which are not cost-effective so that the funds earmarked from these maybe allocated for better uses. Sourcing out of funds from other entities and banking institutions to augment the expenses of the city is plausible provided it is within the bounds of fiscal adequacy. Certain measures and schemes aimed at generating more local income must be prioritized, implemented and supported. Urgent realignment of priorities is imperative to avoid deficit.

In terms of governance, the city has been efficiently delivering quality basic services to its

constituents. This has been confirmed and guaranteed by the ISO 1900:2000 certification awarded to the City Government in May 2006. However, in the implementation of its programs and projects, the city has been compelled to hire more casual employees to support the regular workforce. Their wages have added to the ballooning expense of the city.

The city has to enhance all measures to monitor and evaluate the effectiveness of its programs

and projects. This has direct and immense implication on the income of the city. There are programs and projects which are already completed and needs only maintenance and if already identified would somehow reduce the budget allocation and in the end reduce the city’s expenditures. Moreover, the city has been financing most of its projects and programs out of its revenues and to some extent from the borrowings. Potentials of the private sectors have not been maximized. Local investors have delimited their activities within their own businesses. As stakeholders of the community, they can share with the city in numerous potentials for adventure and growth.

The city has been responsive to its people but efficiency in public service could be further

strengthen through people empowerment and enhancement of their capacity to utilize and maximize their resources sustainably and prudently. People empowerment should be reinforced through information-based governance.

Moreover, concentration of development is on the urban areas thereby leaving certain basic needs in rural areas unattended. A manifestation for this is the very low proportion of households in rural areas with access to basic services such as safe water and sanitation.

The role of private sector in extending public service has not been fully maximized. Symbiotic

relationship dictates that their active involvement in program or project implementation must be intensified as stakeholders of the society.

171

VII. SUMMARY OF OBJECTIVES/DEVELOPMENTAL CHALLENGES AND STRATEGIES:

A. OBJECTIVES:

a. LOCAL ADMINISTRATION. To develop an efficient and effective local government structure responsive to the needs of the city. b. FINANCE. To develop and maintain a financial management system that ensures maximum and wise utilization of financial resources of the city and to enhance the capacity for revenue generation.

B. DEVELOPMENTAL CHALLENGES AND THEIR CORRESPONDING STRATEGIES:

a. LOCAL ADMINISTRATION:

i. Promotion of a balanced Urban and Rural Development

• To adopt environmentally compact development with appropriate infrastructures for solid and liquid waste management and complete urban services outside poblacion through public-private partnerships.

ii. Enhancement of basic social services thru establishment and strengthening of public and private partnerships.

• To formulate and institutionalize the provision of affordable and sustainable housing program through public-private partnership.

• To institutionalize community–based socialized health insurance program and efficient delivery of health services supported by basic medical equipment and medicines and infrastructure.

• To install efficient monitoring systems and structures in the delivery of social services.

iii. Development and enhancement of Human Resources

• To identify, formulate, and conduct capability building program on eco-tourism, information and communications technology and other environment-friendly enterprises.

• To formulate policies, systems and procedures that will promote transparency, accountability and integrity of the civil servants in the delivery of services.

• To develop and upgrade the skills and competencies of the City Government officials on planning and public administration.

iv. Intensification of government- people partnership

• To empower stakeholders as advocates of good governance, by educating them to be responsible citizens and institutionalization of efficient monitoring systems and structures in the delivery of basic social services.

b. FINANCE: i. Enhancement/ strengthening of revenue generating capability of the city.

• To review/ update, enact and implement revenue legislations that will enhance and increase tax collection by imposing higher tax rates and imposing taxes on idle lands within the limits provided under applicable laws.

172

• To enact revenue measures on business and on the existing economic facilities/ enterprises owned and managed by the City Government of Puerto Princesa to increase income collection.

• To institutionalize tax collection scheme up to the grassroot level by providing adequate support facilities for better mobilization.

• To implement income generation schemes and measures in accordance with the tax Code and the Local Government Code, such as public auction of delinquent property.

• To declare tax amnesty strictly in accordance with the provisions of the existing laws allowing the same and must be attuned to its purpose or objective and would not be an impediment to collect taxes due from delinquent taxpayers.

ii. Enhancement of the operation of city economic enterprises to become self- liquidating offices.

• To assess whether each economic enterprise is generating more revenues than expenditures.

• To set reasonable income targets for every fiscal year to sustain their operations and yield net revenues for the city.

• To enact legislation/Order increasing the rates imposed by these enterprises to increase their income.

● To encourage these enterprises to engage in various economic/ income-generating activities.

iii. Commitment to pursue the legal share over natural resources within the city in accordance with the provisions of the Local Government Code. iv. Implementation of a transparent and sound fiscal management.

● To manifest political will to manage and maintain the city’s cash position in good standing. ● To be efficient in financial management system by trimming down on its expenditures while

aiming for an improved and increasing income for every fiscal year. ● To strictly adopt efficient cost recovery scheme, such as, energy saving measures.

● To engage in various economic activities/ income generating programs and projects.

v. Promotion of government-private sector partnership in the development of the city. ● To encourage environmental friendly investments through legislations which provide reasonable incentives and tax holidays to investors.

● To enter into an agreement or joint venture with private sector for the implementation of developmental programs and projects.

chapter vii local administration and financial profile administration and... · 146 upon, plans...

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