Iloilo City Council Okays PHP4.1-B Budget for 2025: More than P200-million set aside for loan repayments

By Mariela Angella Oladive

The Iloilo City Council approved a PHP 4.134 billion annual budget for 2025 during its regular session on Nov. 20, reflecting a 14.83% increase—over PHP 500 million higher than the PHP 3.6 billion allocation in 2024.

The 2025 budget allocates PHP 232.3 million for contractual obligations, including loans.

Records show a steady increase in the city’s budget over recent years.

In 2021, the budget was PHP 2.97 billion, rising to PHP 3.54 billion in 2022 and PHP 3.77 billion in 2023.

Despite a slight dip in 2024, the 2025 budget marks a record high.

Funding sources are projected as 57.43% from local revenues, 42.57% from external sources, and 17.79% from the National Tax Allotment (NTA).

The boost in local revenues is largely due to a 300% adjustment in real property taxes (RPT) following an updated valuation framework approved in June 2023.

The framework raised the land levy rate from 1.5% to 2%, while the ad valorem tax on idle lands increased to 2% for residential properties and 3% for agricultural, commercial, and industrial lands.

To cushion taxpayers, the city implemented a 40% discount on RPT payments for 2024 and 2025, excluding idle land taxes. Full implementation of the revised rates begins in 2026.

P5 BILLION CASH STASH

The Committee on Appropriations’ report emphasized Iloilo City’s financial health, noting its debt servicing for 2025 will account for only 5.62% of its regular income, well below the 20% cap mandated by the Local Government Code.

The city government currently holds about PHP 5 billion in cash deposits with the Development Bank of the Philippines, ensuring liquidity to meet all contractual obligations.

According to the Bureau of Local Government Finance, Iloilo City has:

• PHP 394.9 million in annual loan amortization (principal and interest).
• PHP 285.1 million as the net debt service ceiling for additional yearly amortization.
• PHP 2.675 billion in allowable additional borrowing capacity.

“This demonstrates Iloilo City’s robust financial condition, with underutilized borrowing capacity and sufficient resources to settle debts,” the report said.

REVENUE AND SPENDING ADJUSTMENTS

Councilor Rex Sarabia, chair of the appropriations committee, acknowledged that while RPT adjustments bolstered revenue, they also tightened projections.

“This was expected since one income stream was deliberately reduced,” Sarabia said, noting similar discussions in prior budget hearings.

He highlighted the city’s growth and the need for increased spending to address rising demands from its growing population.

“Complaints about increased business tax and RPT rates are outweighed by visible improvements like plaza renovations, market upgrades, and public housing projects,” Sarabia added.

The 2025 budget aligns with the Treñas administration campaign and political tagline-cum-blueprint “RISE”—Responsive Governance, Investment in People, Sustainable Growth, and Excellence—and funds initiatives like Salary Standardization 6, expanded health services, infrastructure projects, and the establishment of a Data Assessment and System Management Office.

The City Mayor’s Office, as the primary executor of city programs, received the largest allocation. This includes funding for new ICARE and dialysis centers and 43 new positions created in 2024.

Sarabia also called for better utilization of the Disaster Risk Reduction and Management Fund (DRRMF), as only 50% of the 70% allocated for disaster prevention programs was utilized.

“Moving into 2025, we aim to use the budget more efficiently,” he said.

Additional Approvals

The council also approved PHP 81.9 million for the special account of Local Economic Enterprises to support city projects and operational needs.

With rising revenues and prudent fiscal management, Iloilo City remains on track to fund key development programs and sustain its rapid urban progress.