Baguio City’s over P4.43B idle funds in time deposits and HYSA flagged by COA

Baguio City, Philippines - The city government of Baguio was flagged by the country’s Commission on Audit (COA) for over P4.43 billion in time deposits and high-yield savings accounts (HYSA), while the local government was having unpaid debts and unimplemented projects. 

The issue was raised based on the COA’s audit in 2023. According to the data gathered by Phil Star Global from the agency, the city's funds kept in time deposits and HYSA accounts reached P4.45 billion as of December 2023. 

However, COA declared a surplus and said that P3.7 billion—537 percent of unspent funds—is too high.

 According to the audit, Baguio has only P695 million in idle funds, which happens to be the largest in time deposits and should have been placed under time deposit during the first quarter of 2024. Moreover, the city has seven other accounts at the Development Bank of the Philippines, with a total balance of P1.11 billion. 

FUNDS placed under HYSA/time deposit

The COA further disclosed that these funds were placed in the HYSA/time deposit accounts maintained by the city at the Land Bank of the Philippines. Citing circular Nos. 92-382 and 92-382-A, COA says only unused funds from LGUs should be placed in time deposits or HYSAs. 

The agency explained that the unused funds in Baguio reached only P695 million by December 2023, implying that the cash in time deposit accounts was no longer needed, considering that it was meant for settling liabilities, carrying out operations, and completing projects. 

Further, the COA report underscored that this improper allocation of funds led to the piling up of liabilities with suppliers and contractors, unpaid payments to city officers and employees, and unremitting amounts to other government agencies. Due to this, COA said financial mismanagement may further retard the performance of Baguio in fulfilling its development priorities and commitments to its citizens.

Said audit observation arose when the Baguio local government faced increased examination regarding un-executed priority development initiatives that lack funding, despite substantial sums being placed in time deposits.  The city's financial practices are now questionable, and officials are anticipated to address the issues highlighted by COA regarding the proper allocation and use of public funds.

Source:https://www.philstar.com/nation/2025/01/15/2414234/baguio-flagged-over-p443-billion-savings