Despite an impressive increase in the number of guests patronizing the famed Loboc floating restaurant river cruise, an estimated PhP19,827,979.30 was classified as “unearned income” traced to the grant of monetary incentives to van drivers, tour agencies, guides and any person who could reel in tourists and guests to the Loboc Tourism Center (LTC), according to the Commission on Audit (COA).
The COA, in it’s 2015 and 2017 Annual Audit Report (AAR), found that the Local Government Unit (LGU) of Loboc paid out PhP889,570.00 in 2014 and PhP18,938,409.30 in 2016 respectively, commissions to any person, tourist transport operators, and tourist establishments.
The COA raised serious concerns over the impact of the continued implementation of the commissions to van drivers on the income of the LTC and the “multiplier effect on the budget of the LGU.”
The COA also urged the Loboc LGU to “instruct the economic planners to exert extra efforts to find alternative strategies to sustain tourist arrivals aside from giving monetary incentives to van drivers.”
MAINTENANCE NOT COMMISSION
The PhP50.00 commission to van drivers for each guest they bring to the floating restaurants was deducted from the PhP100.00 Maintenance, Safety and Security (MSS) entrance fee collected from all visitors to the LTC as per Municipal Ordinance No. 01 series of 2010.
The MSS collection is used for the “protection, preservation, maintenance, development and promotion of the natural and environmental tourist spot and for the safety and security of the tourists and guests.”
OPPORTUNITY LOSS
But the COA auditing team expressed dismay by how much these monetary incentives cost the LTC in “unearned income” or “opportunity loss” in 2014 and 2016.
The 2015 Audit Report showed that the total gross MSS income for 2014 amounted to PhP11,627,900.00 but the PhP889,570.00 commissions to van drivers were regarded as “unearned income” or “opportunity loss”.
NO LEGAL BASIS
However, the COA pointed out that the P50 monetary incentive is not in pursuance of Municipal Ordinance No. 01 series of 2010 and rebuked the Sangguniang Bayan (SB) for adopting Resolution No. 132-2014 on August 27, 2004 and implemented in November 2014 granting a PhP50.00 commission to van drivers apparently to amend or repeal existing ordinance.
The COA deemed the commissions “without legal basis”.
The COA reminded the SB that an ordinance is a local law of a general and permanent character while a resolution is a mere expression of the opinion or sentiment of the body, is temporary in nature and cannot supersede an ordinance.
MARKETING STRATEGY
The 2015 COA report also noted that transactions involving the monetary incentives given to van drivers had no appropriate expense accounts in the governments chart of accounts.
The audit report showed that despite the driver’s monetary incentive scheme, there was no significant increase in the number of guests compared to the months where no incentives were paid to the van drivers.
The payment of monetary incentives to van drivers representing approximately 50% of the gross receipts has generated a break-even net receipts resulting to opportunity lost or unearned income, according to the audit report.
BACKGROUND
Even as the COA deemed the granting of commissions to van drivers “without legal basis”, the Loboc LGU argued that “considering the remarkable decline in the number of tourists arrivals due to the devastating effects of the 7.2 magnitude earthquake that sowed destruction to Bohol on October 15, 2013, decisive marketing strategies has to be executed to arrest the alarming decline.”
But on May 25, 2015, the SB enacted Municipal Ordinance No. 4 series of 2015 authorizing the PhP50.00 commission to van drivers that generated PhP46 million total revenues but incurred commissions amounting to PhP18.9 million which was 41% of the income of the LTC in 2016, according to the 2017 COA Audit report.
However, this time the SB heeded the call of the COA to revisit the grant of the commission to van drivers thru a proposed ordinance reducing the incentives from PhP50.00 to PhP25.00.
Commissions for van drivers delivering guests to the fifteen floating restaurants in Loboc increased by 160% more or less after the LGU paid an additional P50 per head for a whopping P130 commission from the previous P80.
Recently, operators and management of the commissary where food is sourced out to the 19 floating restaurants decided to raise entrance fee to the LTC from PhP450.00 to PhP550.00.
According to Elmer Varquez, Municipal Tourism Officer, PhP225 is for the river cruise with entertainment, PhP225 for food and PhP100 for the MSS.
It remains unclear if commissions for van drivers will be deducted from the MSS with suggestions that the monetary incentives may be shouldered by the operators of the floating restaurants. (Chito M. Visarra)