Financial stability via sound fiscal management

By LOUIE MALIZA
Padayon Pilipino .

THE lack of sound fiscal management is one of the reasons of insolvency. Many local government units (LGUs), especially those without steady sources of income, are operating at the border of indebtedness. This problem is exacerbated when the officials are impulsive spenders who squander the taxpayers’ money for personal whims and caprices.

Call it unfair, but Misamis Oriental wallowed in indebtedness when Gov. Yevgeny Vincente Emano assumed the provincial government leadership in July 2013. With an almost empty financial coffer and difficulty to sustain operations, Misamis Oriental was, at that time, on the brink of collapse.

The Provincial Treasurer, Ronald Violon, disclosed that the provincial government owed over P225 million in unpaid premiums with Philhealth in 2013.

It was subsequently discovered that the Philhealth premium paid for in 2013 covered more than 800,000 persons, which number exceeded the actual population of Misamis Oriental which was then a little over 748,000 (2007 Census Population, released April 2013 Philippine Statistic Office).

The provincial government had no option but to renew only the health insurance of the provincial government employees.

Including Philhealth, the outstanding liabilities of Misamis Oriental in 2013 ballooned to about P1.2 billion. The bulk of these liabilities was due to the non-payment to the contractors and the procurement of the more than P80 million re-conditioned heavy equipment. What made the situation worse was the non-payment of the outstanding loan balance of the Misamis Oriental Telephone (Misortel) System.

When he took up the reigns of the provincial government in mid-2013, Governor Emano immediately buckled down to work. Emano had to burn the candles at both ends, together with his financial advisers and key personnel in order to address the problem.

While addressing the province’s financial predicament, Emano also reviewed and instituted reforms in the management of the provincial capitol’s human resources.

Finding sufficient grounds and through the recommendation of the legal team, Emano ordered the filing of criminal complaints before the Ombudsman against seven former employees of the provincial government while directed an investigation against 12 others for misconduct, insubordination, malversation of public funds, malicious mischief, among others.

Along the way, the governor streamlined the workforce of the various departments in the provincial government in consultation with the Department of Budget and Management (DBM) and the Civil Service Commission (CSC).

Emano’s transition team also recommended the reduction of consultants to 12 as against the 137 consultants hired by the previous administration.

After the adoption of various resolutions to address both the financial and human resource problems, Emano then imposed measures to enhance the province’s revenue collection. Marilou Rivera, the former Provincial Treasurer and currently the Provincial Accountant, recalled how she fought against multi-national companies in collecting taxes for the province. She had to face the charge filed against her with the Ombudsman as a consequence of the diligent performance of her duty to the province but was later vindicated when the anti-graft court dismissed the said charge.

For his serious effort to save the province, Emano reported a total income of P1 billion at the end of December 2013.

In six months, from July 2013 to December 2013, the Real Tax Collection of Misamis Oriental increased by 65 percent or a total of P34.3 million while the professional tax climbed by 10 percent.

Fast forward to 2017, Gov. Emano had this report submitted to the Commission on Audit (COA) – Region 10: “The total current operating income of the Provincial Government for 2017 was PhP1,475,484,417.36 of which some PhP1,255,038,871.00 (equivalent to 85%) comes from the Internal Revenue Allotment. The total local income reached to PhP 219,252,293.20, representing the amount of Real Property Tax, Tax on Business, Fees and Charges, Economic Enterprises and Other Receipts collected.

“Of the total budget appropriation of PhP1,952,938,802.00, some PhP 1,309,213,989.34 (equivalent to some 67%) was expended for personnel services, capital outlay, MOOE, non-office and other special projects.”

Clearly, the governor’s sound financial management has turned Misamis Oriental from being financially insolvent into a financially stable province. And while he continues to provide opportunities for the province’s growing populace at present, Gov. Emano stays focused on the future.

(Louie Maliza is a former business page editor of a local newspaper. He is now with the provincial press office.)