BAGUIO CITY – Members of the city’s local finance committee will be meeting with officials of the Philippine Economic Zone Authority (PEZA) to thresh out the issues relating to the decline in the remittances of the economic zone to the local government over the past several years.
City Budget Officer Leticia O. Clemente informed members of the local legislative body that there will be a scheduled consultation between the city’s finance officers and PEZA officials to discuss the reasons why there was a decline in the zone’s remittances that significantly affected projects from the internally generated funds.
Based on the data from the city’s local finance committee, the local government was projected to receive some P220 million from PEZA as remittance of locators operating in the zone. However, for the first three quarters of this year, the city only received a total of P135 million with a guaranteed remaining P25 to P30 million to be remitted for the last quarter of this year.
Earlier, some members of the local legislative body questioned the finance committee why there was a sudden drop in the projected income from PEZA next year of P165 million compared to the projected P220 million PEZA income this year.
City Accountant Antonio Tabin explained the local finance committee based the projected maximum income of P165 million from PEZA remittances next year on the actual remittances received by the city for the first three quarters this year.
Tabin admitted for still unknown reasons, there has been a pattern of the increase and decrease of PEZA remittances to the city which is beyond the control of the local finance committee, thus, increasing the city’s projected PEZA share next year is improbable and could result to budget deficit.
In 2015, the city projected an income of P180 million from PEZA remittances but was able to collect P196 million in actual remittances for the year.
Tabin claimed the operation of the locators in the PEZA is market driven, thus, the local government uses the actual collections of the city for the first quarter of the prevailing year to project the income to be derived from the zone the following year.
Aside from the consultation with PEZA officials, the local finance committee will also look into the assessment of the Bureau of Internal Revenue on the income statements of the locators to ascertain whether or not the data obtained from PEZA tallies with their declarations with the revenue collecting agency.
Under the PEZA law, host local governments are entitled to receive a share of 2 percent from the gross receipts of the operation of economic zones in their respective areas of jurisdiction.
By Dexter A. See