Parañaque to LGUs: Spend prudently, collect taxes aggressively

The Commission on Audit’s (COA) recent findings that some local governments in Metro Manila were mired in debt reminded Parañaque City treasurer Anthony Pulmano of the local government’s financial predicament years ago.

In July 2013, then newly-installed Parañaque Mayor Edwin Olivarez found out that the city had only P237 million left in its coffers until the end of the year. Of the total, P100 million had already been allocated for the salary of city hall employees.

A check of the city’s accounting books also showed a debt of P4 billion to a government bank and various suppliers and contractors.

“What did we do? We implemented aggressive and efficient tax collection, combined with prudent spending,” Pulmano told the Inquirer.

The COA’s annual audit reports showed newly elected Mayors Francisco “Isko Moreno” Domagoso of Manila and Francis Zamora of San Juan saddled with financial woes, courtesy of their predecessors.  Domagoso was facing a P4 billion deficit while Zamora said he had been left with a debt of P1 billion.

According to Pulmano, he turned down a suggestion at that time to collect in advance the taxes due the next year (2014) from big establishments and real property owners.

“[Although] we would [have been] OK that year, we would [be] left with nothing in the coming year,” he said.

Pulmano instead went back to the city’s books and discovered that many registered businesses had been misdeclared.

“For example, this establishment should be paying P10,000 in taxes as a manufacturer with an annual income of P750,000 to P1 million. Instead, it only pays P4,000 in taxes because it declared itself only as a distributor of that product,” he said.

The city also went after delinquent taxpayers and auctioned off real property with tax delinquencies to force owners to settle their obligations.

Six years after, the city has paid off most of its loan, with the remaining P400 million to be settled by 2021.

The city budget has also grown to P7.8 billion in 2019 from just P3.3 billion in 2013, even without raising taxes.

“It took us some time to pay off those debts, because we did not want the city to sacrifice the public services we give to our constituents,” Pulmano said.