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Baguio Mayor Benjamin Magalong says the practice dates back to 2018, before his term as mayor, with the Baguio earning P332 million
COTABATO CITY, Philippines – Baguio Mayor Benjamin Magalong on Thursday, January 16, defended the city government’s time deposits and high-yield savings accounts, which state auditors said exceeded idle fund limits. He said the practice has long been used to generate additional earnings for the local government, and Baguio raised hundreds of millions from the deposits.
The Commission on Audit has asked the Baguio City government for an explanation on why it held P4.43 billion in time deposits and HYSA across 24 accounts – P3.32 billion in 17 Land Bank of the Philippines accounts and P1.11 billion in seven Development Bank of the Philippines accounts.
“It’s true, we have time deposits. But that was in 2023. The audit observation memo was from 2023,” Magalong said in Cotabato where he was invited to speak during the 5th Cities and Municipalities Competitiveness Summit in the Bangsamoro Autonomous Region in Muslim Mindanao.
He said the practice dates back to 2018, before his term as mayor, with the Baguio City government earning P332 million from such investments from 2018 to 2023.
In 2023 alone, earnings reached P75 million, according to Magalong.
He acknowledged that as of January 15, Baguio still maintained time deposits amounting to P1.13 billion. The funds, he said, would be returned to the city government’s general fund and reintegrated into the city’s budget upon maturity.
Magalong asserted the fiscal autonomy of local governments and the importance of maintaining financial stability, meeting obligations, and preparing for unforeseen needs. He explained that Baguio’s local finance committee invested idle funds in short-term deposits to maximize earnings.
The process, he said, is transparent, properly recorded, and reported to the city council which means that the funds are traceable and cannot be concealed.
State auditors have called out Baguio officials, warning that these amounts exceeded authorized idle fund limits, which capped investments at P695 million during the first half of 2024.
The funds, meant for liabilities and operating expenses, instead reflected an “accumulation of liabilities” and unpaid obligations, auditors said.
Of the total funds, P1.88 billion was allocated for priority development projects, but auditors noted that only P293 million was spent in 2023.
The COA also noted that the deposits earned interest rates of 0.65% to 1.75%, far below the 7.5% minimum prescribed under a 2001 city resolution.
Earlier, the Baguio City government assured COA that it would use the excess funds to settle liabilities but sought an extension to allow time deposits to mature before withdrawal.
While acknowledging the COA findings, Magalong raised concerns that the issue might be weaponized as part of a supposed demolition campaign against him. He linked this to his earlier whistleblowing on alleged corruption in the national government’s financial aid programs, which he claimed have fostered systemic corruption and political patronage.
Magalong said his public stance against the alleged corruption has made him a target of character attacks, with critics labeling him as a “gambling lord” and a “drug lord.”
He said his family has also been dragged into the alleged smear campaign, with his daughters falsely accused of being sex workers and his young grandchildren branded as drug addicts.
“The attacks are relentless, just to bring me down,” he said. “I will never give up. I’ll just keep going. I’m willing to die for this country.”
Aid program scheme
While in Cotabato, Magalong sharply criticized what he described as corrupt practices in the government financial aid programs, alleging that schemes like the so-called “7-7-7” promote systemic corruption and political patronage.
Before local government workers and officials, Magalong explained the alleged “7-7-7” scheme, where congressmen hosting fund distributions through Speaker Martin Romualdez’s office reportedly receive P7 million each from three aid programs: the Ayuda sa Kapos ang Kita Program (AKAP), Assistance to Individuals in Crisis Situation (AICS), and Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD).
“Do you know there’s another crazy thing? It’s not just 7-7-7, there’s also 30-30-30. If you’re the host district, you get P30 million AKAP, P30 million AICS, and P30 million TUPAD,” Magalong said.
Magalong accused congressmen of exploiting these programs to bolster political influence and engage in vote-buying.
“And you know, they’re not yet satisfied. There are still entitled congressmen out there who have unlimited AICS and AKAP. When they run out, they can just get more, like reloading bullets,” he said.
Magalong was in Cotabato where he spoke about how Baguio uses data analytics and AI to enhance governance in tourism, public safety, traffic, and disaster response, among others. Central to this is the Smart City Command Center, which employs AI and sensors for real-time insights, enabling swift action and efficient resource use. – Rappler.com
