2.1. Section 80 of the International Public Sector Accounting Standard (IPSAS) 1 –
Presentation of Financial Statements states that:
“A liability shall be classified as current when it satisfies any of the
following criteria:
(a) It is expected to be settled in the entity’s normal operating cycle;
(b) It is held primarily for the purpose of being traded;
(c) It is due to be settled within twelve months after the reporting date;
or
(d) The entity does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date.
All other liabilities shall be classified as non-current.”
2.2. Our verification of the Municipality’s year-end financial statements revealed that,
as of December 31, 2024, the account Loans Payable – Domestic, classified under
Current Liabilities, carried a total balance of ₱95,973,110.17.
2.3. This amount represents loans obtained by the Local Government Unit (LGU) from
the Land Bank of the Philippines to finance the following projects:
2.3.1. Construction of Government Center
2.3.2. Plaza Development
2.3.3. Construction of Manjuyod Jetty Port
2.3.4. Construction and Rehabilitation of Sandbar and Cottages
2.3.5. Acquisition of Lot for Jetty Port and Road
2.4. These loans, authorized by SB Resolution No. 035, s. 2022, are subject to fifty-six
(56) equal quarterly amortizations beginning in January 2025 for the 1st four loans,
and January 2026 for the last loan, with final maturities extending to October 2038
and October 2039.
2.5. In support of this, the bank confirmation as of December 31, 2024, received from
the Land Bank of the Philippines confirmed that the LGU had availed of the
following loan facilities, and the Loan Profile provided by the Municipal
Accountant enabled the team to compute the current and non-current portion of the
loan:
32
