At the outset, allow us to clarify that our previous column about the Baguio City market development is meant to awaken the consciousness of our readers and hopefully, the local leadership and Baguio residents to consider other alternative designs for a public market that would maintain the native character and culture of Baguio, which made visits of our residents and also tourists from other parts of the country and foreigners, a lasting and unforgettable experience, instead of another commercial box, called a mall, that would obliterate this historical landmark in our beloved city.
It is also meant for our aldermen to consider other alternative means to raise funds for its development that are open for the city under the Local Government Code, that would challenge the capability of our city to do the construction based on its own sariling sikap, instead of the very convenient alternative of choosing a private corporation to finance and construct it at “no cost from our government.” Oh, really?
First of all, let us consider the projected cost of the proposed five-story mall, which is about P6 billion. This commercial box that a private corporation would gleefully invest in will be sitting on the most prime real estate property of Baguio. Once constructed, the private corporation will take over the management and control of the building for a maximum period of half a century. For a P6-billion investment to do business for 50 years in the most prime property right at the heart of Baguio must be a dream deal to catch. The private corporation would lease out the stores at their own rates, including the parking spaces for its customers. Of course, it would provide for road networks towards its business complex, for the convenience of its customers. Good for the business, the more the customers, the more the income. Of course too, the private corporation would provide for the maintenance of its mall complex for the convenience of its customers and would spend for infrastructure needed. Remember, theirs is the “heart” of Baguio for half a century.
So where does that leave the city in this deal? Oh, two floors (or is it just one and a half floors?) will be allotted to the bonafide incumbent market vendors. The three other floors are for the private corporation to lease out at its dictated rates. As to the floors allotted for the market vendors, who will collect their rents – the city or the private corporation? The city will, of course, get revenues from business taxes. But what about the millions of income that the private corporation would generate from the three floors and parking of the building? The corporate income tax is paid where the mother corporation is registered. So Baguio could not even gain an increase in its internal revenue allotment.
In sum, while at the outset, it is noted that the actual development of the public market-cum-mall will entail no expense from the city, the consequences are huge. The city is surrendering the management and control of the development of a prime property to a private entity. The operation of the mall and income to be generated therefrom by the private developer has minimal advantage to the city. But more than this is the impending obliteration of the Baguio public market that our city is very much identified with nationally and globally.
We have adequately discussed in our previous column about the need to preserve a historical landmark of Baguio. Some readers asked, where can we get P6B to develop the public market? I explained that the P6B is a proposal from a private developer because it will construct a five-story mall together with infrastructures to enhance its business which it will operate for a 50-year period.
Where will the public market be? It will be situated in the first two floors of the mall. Note that we have many duly accomplished Baguio architects who could design a public market that truly captures the essence of Baguio’s character and culture and the cost need not be P6B. So where do we source the funds?
As we have suggested, the city can consider bond flotation as a means to obtain funding. The mechanics of bond flotation is found in the LGC. The legal basis for its issuance is found in Sec. 295 thereof, which states that local government units shall have the power to create indebtedness and enter into credit and other financial transactions. They are authorized to source funds to finance identified development projects.
In laymen’s terms, the concept of bond flotation is that it is a means available to an LGU, like Baguio City, to raise money to build or develop an identified development projects, like the public market, by selling bonds to the public with an attractive return on its investments over a period of time. The mechanics is found in the said law and we encourage our aldermen to go over the same and take serious consideration.
The concept is based on sariling sikap and considering the track record of the city in the past years that we have been accumulating surplus over the past years. To tap this is the goodwill that our government has generated funding of government projects, kudos to Mayor Benjie, in line with his 15-point agenda.
We appeal to the city government to take a second look at this mode of financing instead of the very convenient project development in partnership with a private developer that could lead to great and irreparable consequences that would break the heart of Baguio.
I remember very well that many migrants from the lowlands and the uplands came to Baguio with high hopes of creating a family and establishing residency here on their sariling sikap. That was how our public market was formed by these residents’ own ingenuity, resiliency, patience, and hard work. Perhaps it is about time our city should now stand on its own feet and develop its own public market that it will be proud of because it would symbolize the proud character and culture that defines the Baguio that we know and its people. — DEL CLARAVALL
April 25, 2024
