COA: Cebu City spent only P344.45M of P4.31-B Development Fund in 2025

CEBU CITY, Philippines — Cebu City spent only 7.98 percent of its more than P4.31-billion, which is the 20% Development Fund (DF) in 2025.

This leaves billions of pesos intended for infrastructure and socio-economic projects largely unused because of delays in procurement, poor project readiness, and implementation deficiencies, the Commission on Audit (COA) has found.

In its 2025 Annual Audit Report, COA said the city utilized only P344.45 million out of the P4.32 billion available under the mandatory development fund, falling far short of delivering projects programmed for the year.

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The audit attributed the low utilization primarily to the delayed or non-implementation of 41 priority infrastructure projects worth P2.11 billion, citing procurement setbacks, lack of implementation readiness, and weaknesses in project realignment and execution.

“The City Government’s ability to deliver planned socio-economic programs and infrastructure projects and achieve its intended development outcomes” suffered because of these issues, COA said, adding that the situation ran contrary to provisions of the DBM-DOF-DILG Joint Memorandum Circular No. 2020-1, which governs the planning and utilization of local development funds.

Billions remained idle

The 20% Development Fund finances priority infrastructure and development programs that local governments identify in their approved annual investment plans.

With only about eight percent spent, roughly 92 percent of the city’s available development fund remained unutilized during the year.

COA noted that many projects failed to move beyond the procurement stage or lacked sufficient preparation before implementation, resulting in significant delays.

READ: Cebu City audit: DEPW constraints delayed 41 projects

The state auditors also flagged deficiencies in the city’s project realignment process, saying inaccurate project reporting and execution problems hampered the government’s capacity to deliver its planned programs.

COA recommendations

To prevent similar setbacks, COA urged the Cebu City government, through its management, the Department of Engineering and Public Works (DEPW), and the City Planning and Development Office, to strengthen project planning and implementation.

Among its recommendations, COA called on the city to:

improve the screening and review of projects so that only procurement-ready and implementation-ready projects receive funding;

conduct additional validation measures, including site inspections where feasible, to identify implementation issues before projects begin;

establish a unified monitoring system involving implementing offices and the Bids and Awards Committee to provide real-time updates from planning through implementation;

address manpower and capacity constraints within the DEPW, including outsourcing the preparation of detailed engineering documents for projects beyond the department’s capacity, as allowed under Republic Act No. 9184;

strengthen project validation and reporting controls to ensure only verified projects undergo budget realignment and require officials to justify the inclusion of projects already ongoing or completed; and

ensure project billboards contain accurate information to improve transparency and avoid misleading the public.

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Capacity constraints

COA also pointed to the engineering department’s limited capacity as one of the factors slowing project implementation.

The audit recommended that city officials consider outsourcing the preparation of programs of work and other engineering requirements for infrastructure projects that exceed the DEPW’s in-house capabilities to help clear existing backlogs and accelerate implementation.

Transparency issues

Apart from implementation delays, COA also raised concerns over inaccuracies in project billboards, saying incorrect project information could misinform residents and undermine transparency in the city’s development initiatives.

The audit urged city officials to ensure that project details posted on-site accurately reflect the status and scope of government-funded projects.

The findings is part of COA’s Annual Audit Report on the City Government of Cebu for the year ended Dec. 31, 2025, which evaluates the city’s compliance with government budgeting, procurement, and financial management rules.

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