Market Update: Baguio’s revenues climb 8% to P3.329b, reflect vibrant city economy – Full Analysis

Baguio City generated revenues of P3.329 billion in 2025, up 8.1 percent from the P3.079 billion recorded in 2024, according to Herald Expess, a member of Philippine Press Institute’s News Common.

The Baguio City Accounting Office (CAO) said the city’s financial performance reflects a strategy of stability and self-reliance, according to a report delivered by the CAO during a Monday flag-raising ceremony. Officials attributed the growth to increased national tax shares and improved local collection efficiency.

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The National Tax Allotment (NTA) remained the primary external revenue source, totaling P1.462 billion in 2025. This represents an 18.6-percent rise from the previous year.

The CAO noted that the NTA accounts for roughly 44 percent of total revenues, with growth driven by the Mandanas-Garcia ruling. The ruling expanded the share of national taxes for local governments, allowing Baguio to fund infrastructure and health initiatives previously dependent on the national government.

Other external sources, such as PhilHealth subsidies, national wealth shares and grants, rose to P397.145 million.

On the local front, tax revenue collections reached P941.16 million, up 8.1 percent. The CAO credited this growth to intensified tax mapping and digital payment systems that streamlined the process for citizens to settle professional, real property, and business taxes.

Regulatory and business income from permits, parking and city-operated facilities like the slaughterhouse rose 7.3 percent to P528.64 million.

Interest income fell 61.3 percent to P16.91 million. The CAO said the decline is not a sign of financial weakness but a shift in fiscal policy. Following recommendations from the Commission on Audit, the City Treasury Office reduced idle funds kept in high-yield time deposits.

Total operating expenses reached P2.526 billion in 2025, an 8 percent increase over the P2.339 billion spent in 2024.

Personnel services expenditures, covering salaries and benefits, totaled P1.027 billion. While this is 7.2 percent higher than the previous year, the city remains under the 45 percent spending cap mandated by the Local Government Code.

“The city remains well under the prescribed limit which is a positive indicator of financial health, as it shows that the local government is not top-heavy in administrative cost and has sufficient room to allocate more for social services,” the CAO said.

The expenditure includes the second tranche of the Salary Standardization Law (SSL). With the third tranche set for Aug. 2, the CAO expressed confidence that costs will stay within the legal cap.

Maintenance and other operating expenses reached P1.319 billion, up 10.2 percent. This spending supports the transition toward an integrated health system under the Universal Health Care Act and expanded social welfare programs.

The CAO said that while expenditures rose to meet service demands, they remain “strictly aligned with the city’s operational requirements and service delivery commitments.”

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