NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Profile

1.1 Agency Profile

Calapan was converted from a municipality into a component city by

virtue of Republic Act No. 8475. The law was authored in Congress by
Representative J. Renato V. Leviste and signed by President Fidel V.
Ramos on February 2, 1998. On March 21, 1998, the people of Calapan
ratified the creation of the City of Calapan through a plebiscite marking
the same day as the City’s foundation day. Effective July 2005, Calapan
was reclassified from 4th class to 3rd class city.

Calapan City has an area of 2,250.06 km2 (96.55 sq mi) and is composed

of 62 barangays, of which 22 are classified as urban and 40 as rural. It is
headed by Honorable Arnan C. Panaligan, and assisted by Honorable Vice
Mayor Gil G. Ramirez and the Sangguniang Panlungsod Members in the
administration of the City.

By virtue of Executive Order No. 682 dated November 22, 2007,

Calapan City was designated as the Regional Center of MIMAROPA
Region.

1.2 Vision

Metro Calapan 2026: MIMAROPA’s premier center of investment and

agro-industry.

Note 2 – Basis of Financial Statements Presentation

The consolidated financial statements of the City Government of Calapan

(CGC) have been prepared in accordance with the IPSAS. The consolidated
financial statements are presented in pesos, which is the functional and
reporting currency of the City. The accounting policies have been applied
starting the year 2015.

In October 2018, the City started to implement the Electronic New Government
Accounting System (e-NGAS). The account balances as of August 31, 2018
were used as beginning balances

Note 3 – Summary of Significant Accounting Policies

3.1 Basis of Accounting

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 The consolidated financial statements are prepared on an accrual basis in
accordance with the IPSAS.

3.2 Consolidation

The controlled funds are all those over which the controlling entity has the
power to govern the financial and operating policies. Inter-group
transaction, balances and unrelieazed gains and losses on transactions
betweem entities and funds are eliminated in full.

The City maintains three funds, namely the: General Fund (GF), Special
Education Fund (SEF) and Trust Fund (TF).

It also maintains special accounts under the GF for the following special
projects/economic enterprises it operates:

a. City College of Calapan (CCC);

b. Botika ng Bayan (BnB);
c. Socialized Medical Healthcare Program (SMHCP);
d. Market Administration;
e. Slaughterhouse;
f. Operation of Cemetery; and
g. 20% Development Fund (DF).

3.3 Revenue Recognition

Revenue from non-exchange transactions

Taxes, fees and fines

The City recognizes revenues from taxes and fines when the event occurs
and the asset recognition criteria are met. To the extent that there is a
related condition attached that would give rise to a liability to repay the
amount, liability is recognized instead of revenue. Other non-exchange
revenues are recognized when it is improbable that the future economic
benefit or service potential associated with the asset will flow to the entity
and the fair value of the asset can be measured reliably.

Transfers from other government entities

Revenues from non-exchange transactions with other government entities

are measured at fair value and recognized on obtaining control of the asset
(cash, goods, services and property) if the transfer is free from conditions
and it is probable that the economic benefits or service potential related to
the asset will flow to the City and can be measured reliably.

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 The City availed of the 5-year transitional provision for the recognition of
Tax Revenue-Real Property and Special Education Tax. For the first year,
there will be no change in policy for the recognition of the aforementioned
tax revenue.

Revenue from exchange transactions

Sale of goods

Revenue from the sale of goods is recognized when the significant risks
and rewards of ownership have been transferred to the buyer, usually on
delivery of the goods and when the amount of revenue can be measured
reliably and it is probable that the economic benefits or service potential
associated with the transaction will flow to the City.

Interest income

Interest income is accrued using the effective yield method. The effective
yield discounts estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount. The method applies
this yield to the principal outstanding to determine interest income each
period.

Rental income

Rental income arising from operating leases on investment properties is

accounted for on a straight-line basis over the lease terms and included in
revenue.

3.4 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash at bank,
deposits on call and highly liquid investments with an original maturity of
three months or less, which are readily convertible to known amounts of
cash and are subject to insignificant risk of changes in value. For the
purpose of the consolidated statement of cash flows, cash and cash
equivalents consist of cash and short-term deposits as defined above.

3.5 Inventories

Inventory is measured at cost upon initial recognition. To the extent that

inventory was received through non-exchange transactions (for no cost or
for a nominal cost), the cost of inventory is its fair value at the date of
acquisition.

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 After initial recognition, inventory is measured at the lower of cost and net
realizable value. However, to the extent that a class of inventory is
distributed or deployed at no charge or for a nominal charge, that class of
inventory is measured at the lower of cost and current replacement cost.

Net realizable value is the estimated selling price in the ordinary course of
operations, less the estimated costs of completion and the estimated costs
necessary to make the sale, exchange, or distribution. Inventories are
recognized as an expense when deployed for utilization or consumption in
the ordinary course of operations of the City.

3.6 Property, Plant and Equipment (PPE)

All PPE are stated at cost less accumulated depreciation and impairment
losses. Cost includes expenditure that is directly attributable to the
acquisition of the items. When significant parts of PPE are required to be
replaced at intervals, the City recognizes such parts as individual assets
with specific useful lives and depreciates them accordingly. Likewise,
when a major inspection is performed, its cost is recognized in the
carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs
are recognized in surplus or deficit as incurred. Where an asset is acquired
in a non-exchange transaction for nil or nominal consideration the asset is
initially measured at its fair value.

Depreciation on assets is charged on a straight-line basis over the useful

life of the asset.

Depreciation is charged at rates calculated to allocate cost or valuation of

the asset less any estimated residual value over its remaining useful life.
The assets’ residual values and useful lives are reviewed, and adjusted
prospectively, if appropriate, at the end of each reporting period. An
asset’s carrying amount is written down immediately to its recoverable
amount, or recoverable service amount, if the asset’s carrying amount is
greater than its estimated recoverable amount or recoverable service
amount. The City derecognizes items of PPE and/or any significant part
of an asset upon disposal or when no future economic benefits or service
potential is expected from its continuing use. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
surplus or deficit when the asset is derecognized.

Public Infrastructures were not previously recognized in the books. The

City availed of the 5-year transitional provision for the recognition of the
Public Infrastructure. For the first year of implementation of the PPSAS,
the City will not recognize the Public Infrastructure in the books of
accounts.

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 By the end of 2018, all Public Infrastructures were already recorded back
in the City’s books of accounts.

3.7 Leases

Leases in which the City does not transfer substantially all risks and
benefits of ownership of an asset are classified as operating leases. Initial
direct costs incurred in negotiating an operating lease are added to the
carrying amount of the leased asset and recognized over the lease term.

Rent received from an operating lease is recognized as income on a

straight-line basis over the lease term. Contingent rents are recognized as
revenue in the period in which they are earned.

3.8 Provisions

Provisions are recognized when the City has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits or service potential will be
required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.

Contingent Liabilities

The City does not recognize a contigent liability, but discloses details of
any contingencies in the notes to the financial statements, unless the
possibility of an outflow of the resources embodying economic benefits or
service potential is remote.

3.9 Changes in Accounting Policies and Estimates

The City recognizes the effects of changes in accounting policy

retrospectively. The effects of changes in accounting policy are applied
prospectively if retrospective application is impractical.

It also recognizes the effects of changes in accounting estimates

prospectively by including in surplus or deficit.

3.10 Related Parties

The City regards a related party as a person or an entity with the ability to
exert control individually or jointly, or to exercise significant influence
over the City, or vice versa. Members of key management consist of the
following:

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 City Mayor: Hon. Arnan C. Panaligan - City Mayor
City Vice Mayor: Hon. Gil G. Ramirez - Vice Mayor

Honorable Members of the Sangguniang Panlungsod:

1. Hon. Mary Pauline Mylene A. de Jesus
2. Hon. Charles O. Pansoy
3. Hon. Rafael E. Panaligan, Jr.
4. Hon. Genie R. Fortu
5. Hon. Farrah Fay C. Ilano
6. Hon. Jocelyn U. Neria
7. Hon. Ronalee E. Leachon
8. Hon. Roberto L. Concepcion
9. Hon. Rius Anthony C. Agua
10. Hon. Marian Teresa G. Tagupa

Department Heads:
1. City Administrator - Atty. Adel C. Abas
2. City Accountant - Mr. Edgardo C. Basilan
3. City Engineer - Engr. Benjamin L. Acedera
4. City Architect - Arch. Elmer C. Villas
5. City Treasurer - Mr. Manuel M. Ilagan, Jr.
6. City Budget Officer - Ms. Lorieta A. Galicia
7. City Health Officer - Dra. Basilisa M. Llanto
8. City Assessor - Mr. Jelson O. Masongsong
9. City HRMO - Mr. Roland O. Punzalan
10. City SWDO - Ms. Juvy L. Bahia
11. City Civil Registrar - Mr. Deo Mar Francis F. Mauro
12. City Agriculturist - Ms. Lorelein V. Sevilla
13. City Legal Officer - Atty. Jesus Franco B. Lasquite
14. City Veterinarian - Dr. Feby Dar C. Manglicmot
15. City CENRO - Mr. Wilfredo G. Landicho
16. Acting City PDC/TIO - EnP. Amormio Carmelo Joselito S.
Benter
17. City Education Officer - Ms. Marilyn E. Manigbas
18. City GSO - Mr. Policarpio Edmund B. Abas
19. City HUSO - Engr. Redentor A. Reyes, Jr.
20. City YSDO - Mr. Marvin L. Panahon
21. City EEM - Dr. Ronald F. Cantos
22. City PSD - Mr. Nelson V. Aboboto
23. City College Administrator - Dr. Rene M. Colocar
24. SP Secretary – Atty. Harvey Ecker A. Zamora

3.11 Service concession arrangements

The City analyzes all aspects of service concession arrangements that it

enters into in determining the appropriate accounting treatment and

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 disclosure requirements. In particular, where a private party contributes an
asset to the arrangement, the City recognizes that asset when, and only
when, it controls or regulates the services the operator must provide
together with the asset, to whom it must provide them, and at what price.
In the case of assets other than ‘whole-of-life’ assets, it controls, through
ownership, beneficial entitlement or otherwise - any significant residual
interest in the asset at the end of the arrangement. Any asset so recognized
are measured at their fair value. To the extent that an asset has been
recognized, the City also recognizes a corresponding liability, adjusted by
a cash consideration paid or received.

3.12 Budget Information

The annual budget is prepared on the modified cash basis, that is, all
planned costs and income are presented in a single statement to determine
the needs of the City. As a result of the adoption of the Modified cash
basis for budgeting purposes, there are basis, timing or entity differences
that would require reconciliation between the actual comparable amounts
and the amounts presented as a separate additional financial statement in
the statement of comparison of budget and actual amounts. Explanatory
comments are provided in the notes to the annual financial statements;
first, the reasons for overall growth or decline in the budget are stated,
followed by details of overspending or underspending on line items.

3.13 Significant Judgments and Sources of Estimation Uncertainty

Judgments

In the process of applying the City’s accounting policies, management has

made judgments, which have the most significant effect on the amounts
recognized in the consolidated financial statements.

Operating lease commitments-City as Lessor

The City has entered into property leases of certain of its properties. The
City has determined, based on an evaluation of the terms and conditions of
the arrangements, (such as the lease term not constituting a substantial
portion of the economic life of the commercial property) that it retains all
the significant risks and rewards of ownership of the properties and
accounts for the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of
estimation uncertainty at the reporting date, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and

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liabilities within the next financial year, are described below. The City
based on its assumptions and estimates on parameters available when the
consolidated financial statements were prepared. However, existing
circumstances and assumptions about future developments may change
due to market changes or circumstances arising beyond the control of the
City. Such changes are reflected in the assumptions when they occur.

Useful Lives and Residual Values

The useful lives and residual values of assets are assessed using the
following indicators to inform potential future use and value from
disposal:

a) The condition of the asset based on the assessment of experts

employed by the City;

b) The nature of the asset, its susceptibility and adaptability to changes in

technology and processes;

c) The nature of the processes in which the asset is deployed; and

d) Changes in the market in relation to the asset

Impairment of non-financial assets-cash-generating assets

The recoverable amounts of cash-generating units and individual assets

have been determined based on the higher of value-in-use calculations and
fair value less costs to sell. These calculations require the use of estimates
and assumptions. It is reasonably possible that the assumptions may
change, which may then impact management’s estimations and require a
material adjustment to the carrying value of tangible assets.

The City reviews and tests the carrying value of assets when events or
changes in circumstances suggest that the carrying amount may not be
recoverable. Cash-generating assets are grouped at the lowest level for
which identifiable cash flows are largely independent of cash flows of
other assets and liabilities. If there are indications that impairment may
have occurred, estimates of expected future cash flows are prepared for
each group of assets. Expected future cash flows used to determine the
value in use of tangible assets are inherently uncertain and could
materially change over time.

Impairment of non-financial assets-non-cash generating assets

The City reviews and tests the carrying value of non-cash-generating

assets when events and changes in circumstances suggest that there may

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be a reduction in the future service potential that can reasonably be
expected to be derived from the asset. Where indicators of possible
impairment are present, the City undertakes impairment tests, which
require the determination of the fair value of the asset and its recoverable
service amount. The estimation of these inputs unto the calculation relies
on the use estimates and assumptions.

Any subsequent changes to the factors supporting these estimates and

assumptions may have an impact on the reported carrying amount of the
related asset.

Held-to-maturity investments and loans and receivables

The City assesses its loans and receivables (including trade receivable)
and its held-to-maturity investments at the end of reporting period. In
determining whether an impairment loss should be recorded in surplus or
deficit, the City evaluates the indicators present in the market to determine
if those indicators are indicative of impairment in its loans and receivables
or held-to-maturity investments.

Where specific impairments have not been identified the impairment for
trade receivables, and loans and receivables is calculated on a portfolio
basis, based on historical loss ratios, adjusted for national and industry-
specific economic conditions and other indicators present at the reporting
date that correlate with defaults on the portfolio. These annual loss ratios
are applied to loan balances in the portfolio and scaled to the estimated
loss emergence period.

Cash and cash equivalents

The City limits its exposure to credit risk by investing cash and cash
equivalents with only reputable financial institutions that have a sound
credit rating, and within specific guidelines set in accordance with the
Sanggunian’s approved investment policy. Consequently, the City does
not consider there to be any significant exposure to credit risk.

Liquidity risk

Liquidity risk is the risk of the City not being able to meet its obligations
as they fall due. The City’s approach to managing liquidity risk is to
ensure that sufficient liquidity is available to meet its liabilities when due,
without incurring unacceptable losses or risking damage to the City’s
reputation.

The City ensures that it has sufficient cash on demand to meet expected
operating expenses through the use of cash flows forecasts.

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Note 4 – Cash and Cash Equivalents

This account consists of:

2019 2018
Cash on Hand
Cash-Local Treasury ₱ 5,102,507.11 ₱ 15,392,887.62
Cash in Bank-Local Currency, Current Account (LCCA)
Cash in Bank-LCCA 235,847,227.97 259,724,747.95
Investment in Time Deposits
Cash in Bank-LCCA-Time Deposits 36,929,295.30 36,929,295.30
Total ₱ 277,879,030.38 ₱ 312,046,930.87

Cash-Local Treasury amounting to ₱5,102,507.11 is broken down as follows:

2019 2018
GF Proper ₱ 3,411,214.59 ₱ 3,328,691.98
Botika ng Bayan (BnB) 3,565.07 933.82
City College of Calapan (CCC) 0.00 9,310.00
SEF 1,673,227.45 1,293,640.04
TF 14,500.00 10,760,311.78
Total ₱ 5,102,507.11 ₱ 15,392,887.62

The CGC maintains nine depository accounts with Land Bank of the Philippines
(LBP) and one account with Development Bank of the Philippines (DBP), both
Calapan City Branch, as follows:

2019 2018
LBP
GF Proper ₱ 186,821,271.68 ₱ 176,221,162.78
BnB 2,065,567.68 2,413,798.37
CCC 1,944,164.82 2,239,831.31
City College-SHSVP 458,750.00 88,250.00
SMHCP 9,758,318.80 16,043,910.01
SEF 22,393,989.98 19,126,725.85
TF Proper 8,881,187.13 39,425,467.77
Local Investment Fund for
Employees (LIFE) 249,478.23 269,525.76
PhilHealth-Per Family Payment  
Rate (PFPR)   1,310,972.16 2,081,948.61
DBP
TF 1,963,527.49 1,814,127.49
Total ₱ 235,847,227.97 ₱ 259,724,747.95

Cash in bank earns interest based on the prevailing bank deposit rates. Short-
term deposits are made for varying periods, depending on the immediate cash

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 requirements of the LGU and earn interest at the respective short-term deposit
rate.

Investment in Time Deposit under GF amounting to ₱36,929,295.30 was

deposited to the following banks:

2019 2018

LBP-High Yield Account ₱ 21,000,000.00 ₱ 21,000,000.00

DBP-Special Savings Account   15,929,295.30   15,929,295.30
Total ₱ 36,929,295.30 ₱ 36,929,295.30

Note 5 – Receivables

This account includes the following:

2019 2018
Loans and Receivable Accounts
Real Property Tax (RPT) Receivable ₱ 5,233,940.10 ₱ 5,417,577.92
Special Education Tax (SET)
Receivable 3,076,357.87 3,142,915.71
Loans Receivable-Others 7,832,537.35 7,385,324.61
Allowance for Impairment-Loans
Receivable-Others (165,646.60) (165,646.60)
Lease Receivables
Operating Lease Receivable 315,098.80 724,934.15
Allowance for Impairment- (111,244.66) (111,244.66)
Operating Lease Receivable
Intra-Agency Receivables
Due from Other Funds 12,312,257.49 8,616,122.68
Other Receivables
Receivables-Disallowances/Charges 723,851.53 0.00
Total ₱ 29,217,151.88 ₱ 25,009,983.81

RPT and SET Receivables represent the balances of property tax receivables set
up at the beginning of the year but remained unrealized at year-end.

Loans Receivable-Others represent various loans granted to groups and/or

individuals for livelihood assistance projects such as farm equipment
mechanization, SEA-K, employees’ livelihood program, etc.

Other Receivables represent collectible from a former employee for unremitted

collections of business income, recorded by virtue of a COA Disallowance.

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 Note 6 – Inventories

This account includes the following:

2019 2018
Inventory Held for Sale
Merchandise Inventory ₱ 1,176,659.00 ₱ 2,539,403.09
Total ₱ 1,176,659.00 ₱ 2,539,403.09

No inventory items were pledged as security during the current or prior

financial year.

Note 7 – Prepayments and Deferred Charges

This account includes the following:

2019 2018
Prepayments
Advances to Contractors ₱ 34,355,348.56 ₱ 2,226,657.10
Prepaid Insurance 1,130,381.19 1,742,767.67
Total ₱ 35,485,729.75 ₱ 3,969,424.77

Note 8 – Investment Property

This account consists of:

2019 2018
Land and Buildings
Investment Property, Buildings
Public Market ₱ 216,434,622.76 ₱ 225,060,709.72
Accumulated Depreciation (61,683,867.48) (56,910,256.60)
Hawker’s Plaza 12,047,747.00 12,047,747.00
Accumulated Depreciation (2,416,242.62) (1,911,458.91)
Total ₱ 164,382,259.66 ₱ 178,286,741.21

The above properties are being leased out to stall owners on an annual basis at
rates approved by the SP through the City’s Revenue Code.

Note 9 – Property, Plant and Equipment (PPE)

The component of this account includes the following PPEs presented at cost
less accumulated depreciation, as shown below.

  Balance as of Net Addition/ Balance as of

Account Title    
12/31/2019 (Reduction) 12/31/2018
Land and Land ₱ 114,922,263.25 ₱ 22,550,244.51 ₱ 92,372,018.74

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Improvements
Infrastructure Assets     642,286,249.12 104,913,974.69 537,372,274.43
Buildings and Other
 
Structures 485,251,527.96 69,664,109.80 415,587,418.16
Machinery and   171,621,727.23 17,438,776.42 154,182,950.81
Equipment
Transportation   55,363,944.47 8,208,786.10 47,155,158.37
Equipment
Furniture, Fixtures and
 
Books 14,810,053.97 (679,222.70) 15,489,276.67
Construction in Progress   49,487,323.28 23,444,652.66 26,042,670.62
Other PPE 18,504,485.10 4,341,506.03 14,162,979.07
Total       1,552,247,574.38   249,882,827.51   1,302,364,746.87
Less: Acc. Depreciation   (691,263,973.32)   (91,622,487.34)   (599,641,485.98)
Net Book Value   ₱ 860,983,601.06 ₱ 158,260,340.17 ₱ 702,723,260.89

The City measured the residual value of all items of property, plant and
equipment, but does not expect a residual value of these assets, because these
will be utilized for their entire economic lives and do not have a significant
scrap value. During the current financial year, the City reviewed the estimated
useful lives and residual values of property, plant and equipment, where
appropriate.

Purchases of various equipment for disaster risk reduction measures amounted

to ₱3,357,400 in 2019 which includes Mini-Firetruck, Extricating Device,
Drone, CPR Dummies, fire hose among others. Disposal of unserviceable
DRRM equipment amounted to ₱22,500.

There were unaccounted balances reflected in the Schedules of PPE pertaining

to transfers from the Trust Fund in previous years whose details are
unaccounted for.

Note 10 – Intangible Assets

This account consists of:

2019 2018
Other Intangible Assets ₱ 3,994,659.00 ₱ 3,994,659.00
Accumulated Depreciation (898,798.27) (1,508,483.10)
Total ₱ 3,095,860.73 ₱ 2,486,175.90

The balance of ₱3,095,860.73 pertains to the Drainage Master Plan of the City
of Calapan.

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Note 11 – Financial Liabilities

a. Current Financial Liabilities

This account consists of:

2019 2018
Payables
Accounts Payable ₱ 39,754,523.09 ₱ 37,036,702.66
Total ₱ 39,754,523.09 ₱ 37,036,702.66

Trade payables are non-interest bearing and are normally settled on 60-days
terms. Other payables are non-interest bearing and have an average term of six
months.

b. Non-Current Financial Liabilities

This account consists of:

2019 2018
Bills/Bonds/Loans Payable
Loans Payable-Domestic ₱ 181,675,191.49 ₱ 145,347,407.17
Total ₱ 181,675,191.49 ₱ 145,347,407.17

Loans Payable-Domestic account amounting ₱181,675,191.49 pertains to

various term loans availed from LBP to finance the construction of the New
Public Market and Hawkers’ Plaza. The first two loans bear interest at a fixed
rate of 6.75% annually while the last three loans bear interest at LBP prevailing
rates at the time of availment subject to quarterly repricing and all has a term of
15 years. These loans are guaranteed by the assignment of the LGU’s Internal
Revenue Allotment (IRA).

Loan Contract Date Balance

Restructured Term Loans August 7, 2012 ₱ 125,396,542.42

Hawker’s Plaza February 1, 2013 7,374,479.67
Opening/Construction of Access Roads October 1, 2019 6,866,659.63
Leading to Proposed Calapan City
Coliseum (Phase I) and Construction of
Protection Wall
Opening/Construction of Access Roads October 1, 2019 12,060,009.77
Leading to Proposed Calapan City
Convention (Phase I)
Construction of City Convention October 1, 2019 29,977,500.00
Total ₱ 181,675,191.49

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Note 12 – Inter-Agency Payables

This account consists of:

2019 2018
Due to BIR ₱ 8,656,636.20 ₱ 5,074,799.88
Due to GSIS 4,986,539.47 4,649,559.83
Due to Pag-IBIG 189,004.80 93,477.96
Due to PhilHealth 40,520.49 43,145.49
Due to NGAs 100,142.00 100,174.00
Due to LGUs 795,958.99 713,057.20
Total ₱ 14,768,801.95 ₱ 10,674,214.36

Due to BIR, GSIS, Pag-IBIG and PhilHealth represents the amount deducted
from the salaries of officials and employees and is remitted to the respective
government agencies immediately on the month following the month for which
these were deducted.

There were unaccounted balances reflected in the Schedule of Payables arising

from previous years whose details were already difficult to determine, as
follows:

Amount
1. Due to BIR ₱ 271,051.12
2. Due to GSIS 44,767.93
3. Due to Pag-IBIG 23,307.68
4. Due to PhilHealth 12,520.49
Total ₱ 351,647.22

Due to NGAs under GF amounting to ₱100,142.00 represents fund received

from NGAs intended for various projects as follows:

Payees Particulars Amount

1. Others Others ₱ 100,000.00
2. Bureau of Treasury Livestock Development Fund 122.00
3. Bureau of Treasury Legal Research 20.00
Total ₱ 100,142.00

Due to LGUs amounting to ₱546,144.92 under GF consists of share of various

barangays in RPT while the amount of ₱249,814.07 under TF pertains to unpaid
obligations to various barangays in the sand and gravel fees, purchase of
barangay patrol and projects under Philippine Coconut Authority.

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Note 13 – Intra-Agency Payables

This account consists of the following:

2019 2018
Due to Other Funds ₱ 12,278,148.61 ₱ 8,616,122.68
Total ₱ 12,278,148.61 ₱ 8,616,122.68

Due to Other Funds under GF amounting to ₱12,278,148.61 is composed of:

GF Proper
BnB ₱ 734.50
CCC 402,348.41
TF 10,767,379.33
Sub-total 11,170,462.24
SMHCP
BnB 1,107,686.37
Total ₱ 12,278,148.61

The difference of ₱ 34,108.88 between the Due from Other Funds and Due to
Other Funds account balances pertains to the transfer of Botika ng Bayan
(BnB) fund to General Fund (GF) Proper which was not yet recognized in the
GF Proper at year-end since official receipt was issued only on January 4, 2020.

Note 14 – Trust Liabilities

This account consists of:

2019 2018
Trust Liabilities ₱ 14,519,841.34 ₱ 53,777,407.98
Trust Liabilities-DRRMF 13,717,025.32 10,121,237.29
Bail Bonds Payable 420,803.97 570,203.97
Guaranty/Security Deposits Payable 149,400.00 0.00
Total ₱ 28,807,070.63 ₱ 64,468,849.24

Trust Liabilities amounting to ₱14,519,841.34 are broken down as follows:

Particulars Amount

City College of Calapan Fund

1. Athletic Fee ₱ 76,590.00
2. Commission on Higher Education 52,657.25
3. Computer Laboratory 4,353.04
4. Cultural Fee 58,577.00
5. Department of Science and Technology 440,000.00
6. Guidance Fee 90,420.00

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 Particulars Amount
7. Library Fee 102,615.00
8. National Service Training Program 47,986.75
9. Parliament Fee 144,604.75
10. Provision for ID 142,194.00
11. Publication Fee 153,227.98
12. Registration Fee 44,440.00
13. School Handbook 75,990.00
14. Senior High School Miscellaneous Fees 8,655.00
15. Training and Seminar Fees 79,640.00
Sub-total 1,521,950.77

TF
1. Department of Social Welfare and Development
Child Friendly Prize 104,640.00
Day Care Center 1,950,000.00
Senior Citizen Building 500,000.00
2. PhilHEALTH
Per Family Payment Rate 1,310,974.16
PhilHEALTH Capitation Fund 939,417.01
3. Department of Health
Construction of RHU-City Hall 6,930,000.00
4. Department of Agriculture
CSLU-Phil Sino for Agritech 12,734.74
Organic Trading Post 300,000.00
Rice Achievers Award 29,760.00
5. National Mortgage Finance Corp.
Brgy. Tibag 35,462.86
6. Department of Budget and Management
Green, Green Project 848,948.10
7. Department of Trade and Industry
EAS Profile 5,847.50
8. Philippine Charity Sweepstake
Small Town Lottery (STL) 30,106.20
Sub-total 12,997,890.57
Total ₱14,519,841.34

Trust Liability-DRRMF with the total amount of ₱13,717,025.32 corresponds to

the balance of accumulated unexpended/unobligated balances of Quick
Response Fund (QRF) and Mitigating Fund (MF)-Maintenance and Other
Operating Expenses (MOOE) transferred from GF to TF for CYs 2012 to 2019
and donations by other LGUS/NGAs as follows:

27
 Particulars Available Utilized Balance
Transferred to Trust Fund
CY 2019 ₱ 10,767,379.33 ₱ 0.00 ₱ 10,767,379.33
CY 2018 8,422,168.25 6,745,000.00 1,677,168.25
CY 2017 1,256,923.42 576,591.30 680,332.12
CYs 2012 to 2014 432,368.30 0.00 432,368.30
Donation by Other LGUs/NGAs
CY 2019 150,000.00 0.00 150,000.00
CY 2017 9,777.32 0.00 9,777.32
Total ₱21,038,616.62 ₱7,321,591.30 ₱13,717,025.32

Bail Bonds Payable amounting to ₱420,803.97 pertains to the bail bonds and
bidder’s bond of various suppliers and contractors.

Note 15 – Deferred Credits/Unearned Income

This account consists of:

2019 2018
Deferred Real Property Tax ₱ 5,233,940.10 ₱ 5,417,577.92
Deferred Special Education Tax 3,076,357.87 3,142,915.71
Unearned Revenue-Investment Property 315,098.80 724,934.15
Other Deferred Credits 27,542,252.83 23,614,566.50
Total ₱ 36,167,649.60 ₱ 32,899,994.28

The amounts of ₱5,233,940.10 and ₱3,076,357.87 correspond to the

accumulated uncollected portion of Real Property Tax (RPT)/Special Education
Tax Receivables, respectively.

Other Deferred Credits totaling ₱27,542,252.83 pertains to advance payments of

taxpayers.

Note 16 – Other Payables

This account consists of:

2019 2018
Other Payables
GF ₱ 4,216,999.17 ₱ 2,553,354.93
TF 4,236,942.51 2,809,901.96
SEF 236,236.28 0.00
Total ₱ 8,690,177.96 ₱ 5,363,256.89

Other payables are non-interest bearing and have an average term of six months.

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Note 17 – Tax Revenue

This account consists of:

2019 2018
Tax Revenue-Individual and Corporation
Professional Tax ₱ 191,700.00 ₱ 173,105.00
Community Tax 3,799,651.23 3,628,671.05
Tax Revenue-Property
Real Property Tax-Basic 20,053,365.41 17,258,289.64
Discount of RPT-Basic (3,227,100.19) (2,708,713.82)
Special Education Tax 17,120,477.76 14,826,307.80
Discount of SET (2,016,967.39) (1,692,981.21
Real Property Transfer Tax 9,403,579.76 6,838,603.75
Tax Revenue-Goods and Services
Business Tax 92,877,551.08 85,862,438.32
Tax on Sand, Gravel and Other 10,791,641.11 299,062.50
Quarry Products
Tax on Delivery Trucks and Vans 1,437,109.00 1,399,759.00
Amusement Tax 1,459,787.85 1,173,091.11
Franchise Tax 6,660,082.16 5,348,014.94
Printing and Publication Tax 33,277.50 41,926.25
Tax Revenue-Others
Other Taxes 276,300.00 160,197.10
Tax Revenue-Fines and Penalties
Taxes on Individual and 100,652.80 117,856.21
Corporation
Property Taxes 2,545,235.36 2,727,803.74
Goods and Services 1,352,427.51 274,581.59
Other Taxes 0.00 630,470.21
Share from National Taxes
Share from Internal Revenue 656,220,074.00 592,819,511.00
Collections
Total ₱ 819,087,844.95 ₱ 792,177,994.18

Note 18 – Service and Business Income

This account consists of:

2019 2018
Service Income
Permit Fees ₱ 19,476,731.85 ₱ 18,835,692.01
Registration Fees 1,027,190.00 826,382.00
Registration Plates, Tags and 1,277,650.00 1,195,500.00
Stickers Fees
Clearance and Certificates Fees 4,462,007.08 3,922,130.85

29
 2019 2018
Supervision and Regulation 1,728,000.00 2,069,700.00
Enforcement Fees
Inspection Fees 1,453,934.42 1,545,891.68
Verification and Authentication Fees 258,215.00 260,735.00
Processing Fees 157,125.00 196,150.58
Fees for Sealing and Licensing of 75,234.00 111,958.00
Weights and Measures
Fines and Penalties 438,050.27 472,517.41
Other Service Income 834,145.00 818,270.00
Business Income
School Fees 1,843,870.96 3,209,417.50
Rent Income 26,000.00 6,000.00
Parking Fees 3,215,275.40 2,611,440.00
Receipt from Market Operations 12,357,995.35 12,645,324.64
Receipts from Slaughterhouse 1,124,442.50 869,047.00
Operation
Receipts from Cemetery Operation 1,149,950.00 1,107,900.00
Sales Revenue 4,543,528.24 3,465,263.06
Cost of Sales (3,260,769.21) (2,561,621.64)
Garbage Fees 4,160,664.00 3,845,755.00
Hospital Fees 1,180,737.60 629,670.15
Interest Income 570,255.18 628,651.09
Service Concession Revenue 192,429.11 352,903.22
Fines and Penalties 154,298.14 164,761.22
Other Business Income 5,007,708.52 4,584,837.38
Total ₱ 63,454,668.41 ₱ 61,814,276.15

On September 10, 2012, the City entered into a Memorandum Agreement with
Mr. Jesus H. de Veyra for the construction, operation and maintenance of the
City Slaughterhouse for a period of thirty (30) years. Receipts from the
operation of the slaughterhouse are recorded as Service Concession Revenue.

Note 19 – Shares, Grants and Donations

This account consists of:

2019 2018
Shares
Share from PCSO ₱ 922,995.91 ₱ 2,872,645.49
Grants and Donation
Grants and Donations in Cash 22,857,582.10 177,999,675.91
Total ₱ 23,780,578.01 ₱ 180,872,321.40

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Note 20 – Personal Services

This account consists of:

2019 2018
Salaries and Wages
Salaries and Wages-Regular ₱ 160,638,041.85 ₱ 139,535,413.63
Other Compensation
Personnel Economic Relief Allowance 13,239,364.54 12,688,636.36
Representation Allowance 3,285,175.00 3,236,387.50
Transportation Allowance 1,959,475.00 1,843,187.50
Clothing/Uniform Allowance 3,312,000.00 3,125,000.00
Subsistence Allowance 904,461.64 887,080.46
Laundry Allowance 107,933.93 100,048.53
Productivity Incentive Allowance 2,748,000.00 2,671,500.00
Hazard Pay 5,010,033.36 4,097,909.48
Overtime and Night Pay 1,684,246.31 1,335,997.11
Year-End Bonus 13,458,075.80 11,857,452.65
Cash Gift 2,760,500.00 2,683,500.00
Other Bonuses and Allowances 25,622,731.97 13,004,817.00
Personnel Benefit Contributions
Retirement and Life Insurance Premiums 19,159,001.22 16,694,857.42
Pag-IBIG Contributions 3,178,470.83 2,778,156.12
PhilHealth Contributions 1,772,238.00 1,621,020.49
Employees Compensation Insurance
Premiums 659,929.02 630,799.46
Other Personnel Benefits
Terminal Leave Benefits 9,826,912.18 5,426,030.36
Other Personnel Benefits 1,888,216.82 4,352,794.38
Total ₱ 271,214,807.47 ₱ 228,570,588.45

Note 21 – Maintenance and Other Operating Expenses

This account consists of:

2019 2018
Travelling Expenses
Travelling Expenses-Local ₱ 9,099,408.21 ₱ 4,797,571.09
Travelling Expenses-Foreign 90,065.61 673,869.76
Training and Scholarship Expenses
Training Expenses 2,824,222.74 2,664,682.43
Scholarship Grants/Expenses 7,943,641.20 7,934,406.87
Supplies and Materials Expenses
Office Supplies Expenses 8,638,793.05 8,115,943.28
Accountable Forms Expenses 1,033,720.75 960,613.79
Animal/Zoological Supplies 1,887,718.50 1,166,628.00

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 2019 2018
Expenses
Food Supplies Expenses 11,342.74 21,868.07
Welfare Goods Expenses 479,078.00 2,692,085.00
Drugs and Medicines Expenses 6,970,564.61 4,032,706.35
Medical, Dental and Laboratory 1,599,126.30 2,774,409.70
Supplies Expenses
Fuel, Oil and Lubricants Expenses 25,462,631.88 27,092,739.88
Agricultural and Marine Supplies 7,215,765.00 5,411,275.00
Expenses
Textbooks and Instructional 0.00 455,000.00
Materials Expenses
Military, Police and Traffic Supplies 0.00 12,525.00
Expenses
Other Supplies and Materials 6,608,425.30 2,859,585.50
Expenses
Utility Expenses
Water Expenses 7,422,164.75 7,208,731.92
Electricity Expenses 20,880,500.72 18,776,147.11
Communication Expenses
Postage and Courier Service 7,269.00 2,480.00
Telephone Expenses 1,928,905.22 2,086,236.56
Internet Subscription Expenses 1,852,200.94 1,462,944.12
Cable, Satellite, Telegraph and Radio
Expenses 950,500.92 930,820.88
Awards/Rewards Expenses
Prizes 3,192,150.00 2,747,274.96
Confidential, Intelligence and
Extraordinary Expenses
Extraordinary and Miscellaneous 2,195,004.00 816,763.00
Expenses
Professional Services
Consultancy Services 0.00 985,329.09
Other Professional Services 34,567,467.44 33,512,210.50
General Services
Environment/Sanitary Services 20,740,149.96 21,413,328.79
Janitorial Services 6,675,408.16 5,438,805.04
Security Services 13,735,846.27 11,276,005.94
Other General Services 42,367,652.95 34,927,550.39
Repairs and Maintenance
Investment Property 0.00 32,085.00
Land Improvements 669,890.00 443,285.50
Infrastructure Assets 911,211.44 1,074,383.70
Buildings and Other Structures 5,958,920.07 6,308,304.64
Machinery and Equipment 9,812,877.00 7,642,900.00
Transportation Equipment 4,381,735.30 5,533,089.02

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 2019 2018
Furniture and Fixtures 0.00 26,155.33
Taxes, Insurance Premiums and Other Fees
Taxes, Duties and Licenses 353,694.56 219,415.78
Fidelity Bond Premiums 208,563.00 104,519.50
Insurance Expenses 5,791,117.46 4,908,539.83
Other Maintenance and Operating Expenses
Advertising Expenses 123,491.20 40,728.00
Printing and Publication Expenses 1,692,900.00 1,135,773.00
Transportation and Delivery 912,072.00 785,611.00
Expenses
Rent Expenses 360,000.00 1,296,163.00
Membership Dues and Contributions 428,995.40 216,946.50
to Organizations
Subscription Expenses 55,210.00 51,222.50
Donations 121,921,052.02 260,233,597.8
5
Other MOE 28,084,247.62 26,163,865.18
Total 529,467,123.3
₱ 418,045,701.29 ₱ 5

Note 22 - Financial Expenses

This account consists of:

2019 2018
Interest Expenses ₱ 9,495,087.73 ₱ 10,314,831.60
Bank Charges 1,200.00 0.00
Total ₱ 9,496,287.73 ₱ 10,314,831.60

Note 23 – Non-Cash Expenses

This account includes the following:

2019 2018
Depreciation
Investment Property ₱ 7,463,669.95 ₱ 7,508,434.46
Land Improvements 3,607,309.75 1,475,967.44
Infrastructure Assets 46,153,509.63 38,064,869.26
Buildings and Structures 26,013,439.36 21,813,932.04
Machinery and Equipment 12,750,761.74 10,397,253.36
Transportation Equipment 4,797,068.97 4,044,798.34
Furniture, Fixtures and Books 552,176.52 1,044,744.67
Other PPE   1,539,305.20   536,671.16
Amortization
Intangible Assets 399,465.90 505,990.14

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 2019 2018
Impairment Loss
Loans and Receivables 0.00 165,646.60
Other Receivables 0.00 23,922.62
Property, Plant and Equipment 236,334.69 0.00
Losses
Loss on Sale of PPE 6,466,599.23 182,907.53
Total ₱ 109,979,640.94 ₱ 85,765,137.62

Note 24 – Reconciliation of Net Cash Flows from Operating Activities to

Surplus/(Deficit)

2019 2018

Surplus/(Deficit) ₱ 126,047,232.64 ₱ 105,765,140.99

Non-Cash Transactions
Depreciation 102,877,241.12 84,886,670.73
Amortization 399,465.90 505,990.14
Impairment Losses 236,334.69 189,569.22
Losses on Sales of Assets 6,466,599.23 182,907.53
Increase (Decrease) in Payables 11,673,560.98 (103,264,860.22)
Increase in Other Current Assets (67,082,856.19) (3,466,817.68)
Increase in receivables (4,207,168.07) 5,351,528.65
Total ₱ 176,410,410.30 ₱ 90,150,129.36

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 Note 25 – Reconciliation between actual amounts as presented in the Statement of Comparison of Budget and Actual Amounts
and in the Statement of Financial Performance
For the Year Ended December 31, 2019

Personal
Income MOOE Capital Outlay
Particulars Services Financial
Expenses
Statement of Comparison of Budget and ₱935,899,428.50 ₱271,214,807.47 ₱409,161,150.11 ₱22,071,472.81 ₱188,725,167.89
Actual Amounts
Basis Differences:
Capital Expenditures (188,725,167.89)
Borrowings (48,904,169.40)
Timing Differences:
Debt Service (Loan Amortization, (12,576,385.08)
Retirement of Debt Instruments)
Per Statement of Financial Performance ₱886,995,259.10 ₱271,214,807.47 ₱409,161,150.11 ₱9,495,087.73 ₱0.00

35