Iloilo City’s 2025 Budget ‘Inoperative’ Over Faulty National Tax Allocation

By Rjay Zuriaga Castor

The Department of Budget and Management (DBM) declared the 2025 approved budget of the Iloilo City government “inoperative in its entirety” due to an error in the computation of its National Tax Allocation (NTA).

The issue originated from the City Budget Office, which admitted an internal miscommunication. The DBM had sent a letter on June 27, 2024, containing the correct NTA share, but the document was not forwarded to the budget officer preparing the 2025 budget.

As a result, the 2025 budget was based on an initial NTA estimate instead of the updated figures from the DBM.

City Budget Officer Viminale Capulso explained on Wednesday, February 6, that the city’s 2024 NTA share was PHP 1,453,190,044. This was initially estimated to increase by 18%, reaching PHP 1,714,764,252 for 2025.

However, the correct NTA figure provided by the DBM was PHP 1,723,939,468, resulting in a shortfall of PHP 9,175,216.

The DBM flagged the city’s 20% Development Fund, 5% Local Disaster Risk Reduction and Management Fund (LDRRMF), and 1% Local Council for the Protection of Children Fund as underfunded due to this discrepancy.

Since these funds must adhere to fixed percentage allocations under the Local Government Code, the DBM declared the budget inoperative.

The City Council rectified the budget during its regular session on Wednesday. It will now be resubmitted to the DBM for review, and once approved, the revised budget will be implemented retroactively from January 1, 2025.

The increase in the NTA share brought the adjusted 2025 annual budget to PHP 4,143,175,216, up from the previously approved PHP 4.134 billion on November 20, 2024.

With the necessary adjustments, the 20% Development Fund increased from PHP 342 million to PHP 344 million, the LDRRMF from PHP 206.7 million to PHP 207.158 million, and the Local Council for the Protection of Children Fund from PHP 17.147 million to PHP 17.239 million.

Capulso assured the public that the error did not cause damage, as the adjustments provided funding for previously unfunded projects.

“This is actually a happy problem because the amount increased, giving us additional funds for our projects,” she said.

Additional funds were allocated for previously unfunded projects, including PHP 6,589,660 for drainage construction, rehabilitation, and repair at La Paz Plaza and PHP 200,000 for the Philippine Councilors’ League.

To prevent a similar issue in the future, Capulso said a separate logbook for DBM communications has been created.

“I have designated another records officer, so we assigned a new one. We have a separate logbook for communications coming from the DBM or exclusively from the DBM,” she said.

Staff must also affix their initials when relaying information to ensure accountability and confirm receipt of documents, addressing previous issues where there was no proof of acknowledgment.

To prevent a similar issue in the future, Capulso said a separate logbook for DBM communications has been created.

“I have designated another records officer, so we assigned a new one. We have a separate logbook for communications coming from the DBM or exclusively from the DBM,” she said.

Staff must also affix their initials when relaying information to ensure accountability and confirm receipt of documents, addressing previous issues where there was no proof of acknowledgement.