Cebu City Hall has made a significant budgetary decision for 2026, deliberately allocating zero funds for the highly anticipated financial reward traditionally given to employees. This leaves the line item under Personal Services in Annex A, page 41, entirely blank, marking a stark departure from past practices.
A Break from Tradition
Every February 24, Cebu City celebrates its establishment as a chartered city in 1937 under Commonwealth Act 58. Historically, the city has granted its employees a bonus in line with this celebration. Over recent years, these cash incentives have grown substantially, with records showing employees received P15,000 each in 2023, P25,000 in 2024, and P35,000 in 2025. Consequently, the total budget appropriation for these bonuses ballooned from P83,675,000 in 2024 to P139,020,000 in 2025, highlighting a rapid increase in expenditure.
Why the Bonus Was Scrapped
On Wednesday, February 18, Councilor Dave Tumulak, chairman of the budget committee, explained the decision to cut the funding. The primary reason is strict warnings from the Commission on Audit (COA), which has already flagged the city's 2023 and 2024 bonuses by issuing audit observation memoranda and notices of suspension. Mayor Nestor Archival, who made the tough decision early in budget deliberations, warned that releasing more bonuses while these audit issues persist could lead to a formal disallowance. If that occurs, workers would be required to return the money they received, and officials who authorized the payments could face administrative liability.
Compounding these legal risks is a stark financial reality. From January to December 2025, Cebu City reportedly posted a P91-million deficit. With revenues under heavy pressure, the local government simply does not have the funds for additional expenditures, making the bonus unsustainable in the current fiscal climate.
Can Workers Get Extra Leave Instead?
To recognize hardworking employees without spending cash the city does not currently have, Mayor Archival considered an alternative reward. He is planning to grant qualified personnel up to 10 days of additional leave credits. However, this plan faces strict legal hurdles under Civil Service Commission Memorandum Circular 41, series of 1998, known as the Revised Omnibus Rules on Leave. Under these rules, employees are strictly entitled to 15 days of vacation leave and 15 days of sick leave annually, plus up to three days of special leave privileges. Civil Service rules do not authorize local chief executives to simply invent additional leave credits outside those established by law, posing a significant barrier to this alternative.
No Quick Fix in Sight
Some workers held out hope that the City Council might pass a supplemental budget to fund the bonus later in the year. However, Tumulak explained that this route is not viable at this stage. Supplemental appropriations must come from declared savings, which only happen when previously approved projects are discontinued. Because the city is still in the first quarter of the fiscal year, Tumulak noted it would be highly premature to declare savings now without disrupting essential public services.
For now, the Charter Day bonus remains on hold. Tumulak appealed for understanding from city employees, noting that officials might revisit granting financial incentives only after the COA deficiencies are cleared and the city's financial standing improves. This decision underscores the broader challenges facing local governments in balancing employee rewards with fiscal responsibility and legal compliance.
