(BORONGAN CITY INFORMATION OFFICE)
Downgraded to a 2nd class
TACLOBAN CITY– Mayor Jose Ivan Dayan Agda expressed confidence that Borongan City will maintain its status as a first-class city through the efforts of the local finance team and collaboration with stakeholders.
“We are confident that with the support of our finance team and all stakeholders, we can maintain our status as a first-class city. However, this requires everyone’s cooperation,” Mayor Agda stated during a press conference held on December 23.
To qualify as a first-class city, it must generate a minimum of P100 million in annual local revenue. Mayor Agda disclosed that Borongan only achieved this revenue target this year, 2024, since becoming a city in 2007 or 17 years ago.
“For the past several years, we failed to meet the target. We only managed collections of P68 million to P78 million annually. One major factor was the pandemic, which halted business activities and prevented us from taxing local businesses,” Agda explained.
Borongan began recovering financially this year, reaching over P100 million in local income.
However, the city’s economic classification was downgraded into a second-class city by the Department of Finance, through the Bureau of Local Government Finance (BLGF) which was based on its revenue performance from two years ago.
Mayor Agda noted that the downgrade has potential implications, such as reduced salaries for city employees due to changes in salary grades and schedules.
However, this will not take immediate effect as the city has been given three years for final assessment.
“If we consistently maintain more than P100 million in local income from 2025 to 2026, the city will undergo assessment in 2027,” Agda explained.
He credited the expiration of tax holidays for businesses like SaveMore and McDonald’s, as well as the revision of the city’s tax code, for the increase in tax collections.
“When these businesses started, they applied for tax holidays for two or three years as part of our investment incentives. Now, their full payments contribute significantly to our revenue,” Agda clarified.
The city’s tax code, revised every five years, also played a role.
Agda emphasized that the maximum allowable tax increase during revisions is 10%, debunking claims of excessive tax hikes due to Borongan’s city status.
“It is unfair to accuse the city of excessive taxation. This is misinformation,” he said, pointing out that increases are regulated under the Local Government Code of 1991.
Additionally, revenue from PhilHealth reimbursements has bolstered the city’s income, with the city government ensuring free medicines for residents. “Through PhilHealth, the city receives a return on its healthcare expenditures, which contributes to our revenue growth,” Agda said.
With the city’s trajectory improving, Mayor Agda expressed optimism about Borongan’s financial outlook. “We have already reached the target and collected more than P 100 million. Together, through collective effort, we can maintain our first-class city status,” he concluded.
JOEY A. GABIETA
