BY GEROME DALIPE IV
ILOILO City – The City Council has approved a P4.215-billion budget for 2025, designed to support the city’s ongoing development initiatives and drive future growth.
The councilors unanimously passed the committee report on November 20 presented by Councilor Rex Marcus Sarabia, the Appropriations Committee chairperson who recommended the approval of the ordinance for the 2025 budget.
In his report, Sarabia noted expectations of increased revenues from key sources, including Real Property Tax (RPT) and the National Tax Allotment (NTA), which will help fund the city’s development plans and ensure its continued progress.
He said the increases reflect the city’s growing economic activity and improved fiscal capacity, which will support the P4.215-billion budget for 2025.
Sarabia pointed out that the city’s RPT collections have seen a remarkable increase of around 300%, with projections for 2025 at P1,056,520,748.
This represents a P94,520,748 increase, or a 14.83 percent growth, compared to the actual P962,000,000 collected in 2024.
He also said the increase in NTA could be attributed to the growth in national revenue collections in 2022, which serves as the basis for the 2025 allotment.
The boost in NTA signifies enhanced fiscal support from the national government, providing additional resources for local projects.
Sarabia pointed out the expected increase in income from RPT and NTA provides the city with more resources to finance priority programs and infrastructure projects, ensuring the sustainability of its development initiatives.
Sarabia added the sharp increase in the NTA for Iloilo City, rising from P1,453,190,044 in 2024 to P1,714,764,252 in 2025, represents a significant jump of P261,574,208.
He emphasized that this growth reflects the recovery of economic activity in the Philippines following the subsidence of the COVID-19 pandemic’s effects in 2022.
The additional P261.57 million in NTA provides Iloilo City with greater fiscal capacity to implement priority initiatives, particularly in infrastructure, health, and education, the councilor added. He said the increased NTA for Iloilo City provides crucial fiscal support, especially in light of the challenges in local revenue generation, such as the reduced growth in RPT.
However, the city’s strong performance in Business Tax collection demonstrates resilience and adaptability in maintaining revenue streams.
In the 2025 executive budget, the City Budget Office reported that 57.43 percent of the city’s revenue is projected to come from local sources, with the remaining 42.57 percent derived from external sources, including a 17.79 percent increase in the NTA share. Among local sources, tax revenues remain the primary contributor, with an estimated growth of 12.89 percent.
These figures underline the city government’s reduced dependence on the NTA compared to other LGUs, reflecting Iloilo City’s robust local revenue generation and sound fiscal management.
The P4.215-billion budget for 2025 is centered around the RISE program, which serves as the blueprint for Iloilo City’s future development.
The RISE program focuses on four key pillars: Responsive Governance, Investment in People, Sustainable Growth, and Excellence.
In addition, the RISE program represents the Trenas’ administration’s vision for Iloilo City’s continued growth and development, which aims to impact on the city’s governance, economy, and overall quality of life for its residents.
The budget for 2025 categorizes expenditures by expense class, which includes maintenance and other operating expenses (MOOE) amounting to P1.65 billion, or 40 percent of the total budget.
This allocation covers operational costs necessary to maintain the city’s services and day-to-day functions, including utilities, supplies, and other essential expenditures.
Personal services (PS) account for 32 percent of the total budget, which is about P1.3 billion. This portion covers salaries, wages, and other benefits for city government employees.
The special purpose appropriations (SPA) represent 16 percent of the budget, or around P660.956 million.
SPAs are earmarked for specific programs or contingencies, such as calamity funds, debt servicing, or other priority projects.
Capital outlay accounts for eight percent of the total budget, amounting to P329.43 million.
This allocation is intended for long-term investments such as infrastructure projects, the acquisition of equipment, and other assets crucial to the city’s development and modernization.
On the other hand, financial expenses (FinEx) account for 4 percent of the budget, or P183.389 million. This portion is set aside to cover the city’s financial obligations, such as interest payments on loans and other debt servicing costs.
The Local Finance Committee stressed emphasized the city government holds liquid assets in cash deposits with the Development Bank of the Philippines amounting to approximately P5 billion, indicating robust financial health.
These cash reserves alone could cover all contractual obligations listed in the budget, amounting to P232,276,482.00, without difficulty.
Sarabia added that the the Bureau of Local Government issued a finance certificate stating the annual amortization of existing loans, which include principal plus interest, pegged at P394.903 million.
On the other hand, the city’s net debt service ceiling, or the allowable additional amortization, stands at P285.053 million.
Thus, the city government still has maximum debt service capacity of ₱679.956 million and a borrowing capacity of P2.675 billion.
Hence, Councilor Sarabia noted the city government is in a very good financial position, capable of fully paying all existing obligations and with substantial unused borrowing capacity./PN
