The City of Manila is still facing a debt by more than P3.5 billion according to Commission on Audit (COA). The city government owes P613.6 million for electricity and P57.7 million for water.
Vice Mayor Isko Moreno said, “Manila is left with a debt of P3.5 billion and only P235 million in cash, and still living from hand to mouth. There are no [extra] expenditures right now. Once there are collections, they’re being saved for the employees’ payroll”. Manila’s major sources of funds are coming from Local Government Units (LGU’s), Real Estate Taxes, Licenses and Permits of Businesses, etc. but are still not enough to cover the City’s debt.
One of the solutions that Mayor Joseph Estrada has looked into is increasing property taxes. In fact, in news on The Philippine Star, they have already started imposing higher real estate taxes in the city. He told the reporters that this could generate ₱ 3 billion in revenue, which could fund basic social services and pay off the city’s debts. The last time the city government increased its taxes was 20 years ago. The council has earlier explained that this year’s higher tax rates were not really an increase but merely an effect of updated fair market values.
Vice Mayor Isko Moreno, for his part, appealed to residents and business owners complaining about higher and inconsistent tax rates. He explained that the rates are based on property zoning.
The Manila City government auctioned off 97 real estate properties, whose owners are delinquent taxpayers, to pay off its debts. The properties, worth P103.5 million, have a total tax due of P1.1 billion, the city government said.
Aside from the debt crisis the City of Manila is facing, there are also many problems that have to be addressed but unfortunately these can only be done when there is money and funding. To name a few these are, putting order and organizing sidewalk vendors, the need to relocate squatters, to give better pay and incentives to policemen and law enforcers, to beautify the city, to add street lights and revitalize the city of Manila from urban decay.
Even if i may have to face “hostile opposition” , or “violent disagreements” of opinion with my Manila Property Owners, i still agree that the ” Zonal ” Values used for Real Estate Taxes are not reflective on the True Market Values and Prices that Buyers and Sellers are utilizing. It is a matter of being fair. Property owners must realize that it will be an advantage to All and Beneficial to the City and eventually to the Property Owners. This is a matter of Responsible Citizenship , Solidarity, and Patriotism.
The Benefits to the City, and the People of Manila will have a Multiplier effect on the long run. increase of Property Tax will generate funds to pay the pending obligations, because it is also the people of Manila who can help the City to recover from its debts.
Manila City officials can look into, Urban Renewal Projects and Tourist Oriented developments, so as to transform the ” beautiful City” of Manila, to its Glorious Past. Developers can lease and sublease, they could also relocate the Bilibid Prison and the Oil Depot in Pandacan for housing projects.
As an LGU, and mandated by law, the City Government , with the necessary help, coordination, Fund Managent and approvals of other Government Departments and Agencies , may also take into consideration Issuing “Development Bonds”. These like that of the ” PABAHAY BONDS” issued by the NHMFC, headed by Vice President Binay. These Bonds carry with it Government Guarantees, with yields of say 5%, and can be Tax fee. The Bonds, will earn by the “Securitization” of the Cash Flow Income generated from rental collections of all the establishments paying regularly to the City Government.
I commend the local officials for putting up ‘orange tents’ for vendors behind the Bonifacio Shrine near Manila City Hall in a bid to generate income and regulate sidewalk vending. However, this creative idea has to be sustainable. ” Orange Tents” will be a success if they put in the necessary discipline , order, political will, police ” muscle” for implementing the rules and regulations.
In conclusion , it is my “Unsolicited Proposal” that the City of Manila, with the help of Vice President Binay, to issue “MANILA DEVELOPMENT BONDS” where Developers, Investors, and Property owners may profit from on the long term.
With Securitization, the financial needs of the City of Manila can be properly addressed and the Funds be Managed by Independent Reputable Investment Bankers, Trust Departments, Professional Cash and Asset Managers, who will take care of the collections, Property and Facility Management for the City of Manila.
Here is the link of the video of Mayor Joseph Estrada in tackling Manila’s Debt Crisis.
Daisy Dulay DZRH Radio Interview regarding Bahay Bonds 2:
The Philippine Star