COA’s AOM on Baguio's P4B time deposits answered and an old issue, says Baguio City Treasurer

BAGUIO CITY (January 19, 2025) --  The audit observation memorandum (AOM) by the COA questioning Baguio City’s alleged over P4B time deposits was an old issue that had been properly answered, Baguio City Treasurer Alex Cabarrubias said.

This propping up Baguio City Mayor Benjamin Magalong’s avowal that they have explained to the COA about the AOM, which he added, was a 2023 audit findings.

Cabarrubias claimed that on April 22, 2024, he had answered COA's 2023 audit report contained in COA AOM No. 2024-006 which informed of the city's "non-adherence" to COA Circular 92-382 dated July 3, 1992 by placing in time deposits and high yield savings account (HYSA) funds that are not considered as idle.

"In my reply, I already put forward our justification for our decision that we only had the best intentions for the city as the interest earned from that period of 2018 to 2023 were put to good use infused to projects and programs that are beneficial to our constituents," Cabarrubias argued.

In his April 22, 2024 letter to Supervisor Auditor Atty. Nover Bate and Audit Team Leader Alicia Estibar, the city treasurer said he was aware of the COA Circular 92-382 provisions but with the huge amount under current accounts of the city, he was tempted to place amounts not considered as idle into time deposits taking advantage of the high interests offered.

"Having in mind the objective of the Circular, we set the longest period of the time deposits at 180 days or six months, way shorter than the average (time required for) the implementation of projects, the fund cover of which, is the bulk of the time deposits," Cabarrubias wrote the auditors.



Cabarrubias also assured auditors that in availing the time deposits, they saw to it that "the City Government is financially stable and could satisfy its financial obligation on time."

"No payment of whatever kind has been denied or even delayed for non-availability of cash by reason of the time deposit placements."

Cabarrubias then promised to comply with the recommendations in the AOM but appealed to deposits be terminated only upon maturity.

Only P1.13 billion out of the P4.43 billion remains in time deposit, according to the city treasurer.

He also has argued that as a result of the placements, Baguio City realized an estimated P323 million in interest income for the period 2018-2023.

The proceeds, the city treasurer said, were infused in various city programs, projects and activities with amounts spread out in the city budget.

Baguio City accordingly has not yet received a reply or dissenting information from the COA on Cabarrubias’ letter.