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18 Sep 2014
Republic of the Philippines
Office of the Governor
Province of Iloilo
B U D G E T M E S S A G E
October 15, 2010
The Honorable Members
Province of Iloilo
Ladies and Gentlemen:
May I submit the proposed Annual Budget for FY 2011 of the Iloilo Provincial Government for the General Fund pursuant to Section 318 of RA 7160.
This Executive Budget was prepared with significant and important policy and development considerations. Working within the framework and context of change and reform, this budget is anchored on the following:
1. 1. A leadership that values strong public commitment and transparency;
2. A government that values efficiency and effectiveness in the delivery of basic public services;
3. A government that believes in an engaged partnership and collaboration with the non-governmental organizations, private sector, peoples organization and other stakeholders;
4. A strong working collaboration with the Sangguniang Panlalawigan and the municipal mayors of the province;
5. An efficient and judicious use of financial resources of the Iloilo Provincial Government; and
6. Programs and projects that directly address the development needs of the people of the Province of Iloilo.
The Executive Budget for CY 2011 further puts into perspective several development problems and issues faced by the province such as: the sluggishness of economic growth, declining agriculture productivity, poor state of the environment; inadequacy of infrastructure facilities and services and inadequate delivery of basic social services such as health, education and social welfare.
GOALS, OBJECTIVES AND STRATEGIES
With the cited development perspectives, the province strives to attain the following development goals, objectives and strategies;
1. Improve household income through entrepreneurship and employment opportunities;
2. Improve farm household income through enhanced agriculture productivity;
3. Healthy living environment through environmental protection and enhancement;
4. Enhance quality of life through quality and accessible education, social welfare and related services;
5. Improve health and nutrition through accessible health facilities and services;
6. Enhance accessibility through better infrastructure and other support facilities; and
7. Good governance through transparency, service competencies and good fiscal position.
To support the budget for FY 2011, the following fiscal policies and measures shall be adopted:
1. Massive capital investments shall be focused to the following development priorities;
a. Health enhancement through hospital upgrading and improvement;
b. Roads, bridges and other infrastructure upgrading; and
c. Iloilo Provincial Government facilities upgrading and rehabilitation.
2. Leverage local revenues in the form of equity vis-à-vis grants, loans and other financing modes;
3. Loans shall not exceed 20% debt service ratio which is actual debt service cost over regular income (IRA plus locally sourced revenues);
4. Sustained and aggressive efforts to collect more local revenues for the province; and
5. Programs and projects shall be matched with the financing capacity and available funding resources of the province.
OTHER BUDGETARY REQUIREMENTS
The balanced General Fund Budget for FY 2011 is composed of the Expenditure Program and Sources of Financing, both amounting to P1,733,282,968.00 for the General Fund and P341,060,319.00 for the Hospital Operations and Health Facilities as Special Account in the General Fund. It means a per capita spending of a moderate increase compared to current year’s per capita of P1,584,378,158.00. The Expenditure Program and Source of Financing are illustrated in Exhibits 1 and 2.
While we continuously pursue strategies to sustain the development needs of the people in the province, for CY 2011, two major priorities were put in place that influenced the shift in our budget allocation.
Cognizant of the indispensable and enduring role of the civil service employees in ensuring the delivery of public service, the Province of Iloilo adopted the sound and rational compensation and benefit system for all its employees, thereby adopting the Omnibus Job Classification and Compensation Standardization System in the Civil Service, this Act is known as the “Government Classification and Compensation Act of 2006, and appropriated funds thereof. The increase in salary of the employees per the approved schedule will be granted in four tranches and the second tranche is appropriated in this year’s budget while the remaining two tranches will hopefully be implemented in the next two succeeding years.
The second major strategy adopted is the Special Account to be maintained in the General Fund as embodied in Article II Sec. 313 of the Local Government Code declaring Hospital Operations and Health Facilities as Special Account in the General Fund to improve health services to indigent patients, as well as to the constituents of the Province of Iloilo in general. More funds were allocated to improve their hospital equipments and facilities. This is service oriented to help ensure that the basic needs of social services were taken care of.
General Public Services
Allocation for this sector is P 327,355,552.00 of the total budget. The amount will be distributed to programs that will promote order and public safety and for the Judiciary, Administrative Overhead and regulatory functions of the province.
The amount of P 483,678,390.00 is provided for the delivery of social services and welfare or 37.21% of the budget. Beneficiaries of this allocation are the members of the marginalized sector of the community.
Hospital Operations & Health Facilities, Special Account in the General Fund
The budget allocates P 151,817,749.00 to this sector or 11.68 % of the total LGU budget.
The amount reserved for 20% IRA is P 230,098,570.00 which is 17.70% of the total budget. Aid to the 1,721 barangays at P1,000 per barangay is provided in the total amount of P1,721,000. P20,000,000.00 is provided for Loan Amortization.
Exhibit 4 shows the trend of expenditures for FY 2009 to FY 2011. The Economic, Social and General Public Services Sectors increase is attributed to the rising costs of utilities, electricity and fuel.
Distribution by Functional Activity
It has long been recognized that in order to achieve an efficient and effective operation, a local government unit should aim for the improvement of the ratio of its overhead costs to cost of production and service delivery. Thus, it is important to present in this Message, through the chart below, the direct cost of public goods and services produced and delivered vis-à-vis its associated cost. This presentation slices the budget pie on the basis of functional activity.
The distribution of LGU budget (Exhibit 5), P 424,670,752.00 or 46% is allocated for the operation of frontline services; P 166,012,677.00 or 18% is provided for General Policy, Administration and Finance Services; and P 337,148,309.00 representing 36% of the total budget will be for Other Purposes (20% IRA, Aid to Barangays, Reserve for Calamity, Loan Amortization and Terminal Leave Pay).
Distribution by Major Expense Class
· ♦ Personal Services
The total expenditures for Personal Services for the budget year is P 590,683,429.00 Total Personal Services accounts for 45.44% of the total LGU budget.
· ♦ Maintenance and Other Operating Expenses
The amount of P 342,103,262.00 has been set aside for MOOE, representing 26.32% of the budget.
· ♦ Capital Outlays
Expenditures for Capital Outlays will amount to P 30,065,000.00 or 2.31% of the total expenditures.
The amount of P 337,148,309.00 or 25.93% of the total budget as earlier mentioned was set aside as reserve for 20% IRA, Calamity, Aid to Barangays, Terminal Leave Pay and Loan Amortization.
Operation of Economic Enterprise
The proposed Budget for the Hospital Operations and Health Facilities, Special Account on the General Fund in FY 2011shall be sourced from the estimated Income of P341,060,319.00 which is allocated as follows:
Maintenance and Other
Submitted together with this Message are the Local Revenue and Expenditure Program and the Budget of Expenditures and Sources of Financing.
Gentlemen and Ladies of the Sanggunian, this budget proposal manifests our determination to lay a strong foundation for a greater and progressive province. May we always join our hands together as we go about our mission of providing a brighter future for our constituents.
Very truly yours,
(SGD) ARTHUR D. DEFENSOR, SR.