At first glance, the plan of the city government of Baguio as initiated by the executive department to a loan a whopping $50 million or more than P2 billion to fund the long overdue rehabilitation of its 30-year-old sewerage and treatment plant and sewer connections would seem too burdensome and a big gamble for a city that has no known history of borrowing money of such huge amount for its projects and programs.
It would be burdensome because as expected, the city is planning to source the payments of this loan from the residents, in the form of sanitation fee which differs if one is a household or a commercial establishment; and from tourist and visitors in the form of environmental fee.
The amount of sanitation fee for residents would be 16 percent of a household’s monthly water bill, and 18 percent for commercial and government establishment.
This onerous obligation may put at stake the ability of the city government to pay the loan amortizations on time for many years because not everybody can afford an additional expense, in light of the continuing rising levels of inflation which have been unabated and do not seem to ease in the coming years.
Tourists, on the other hand, will have to pay at least P80 environmental fee per visitor per day, the accumulated amount of which is being eyed to cover part of the amortization.
We agree with the city budget officer that the amount is fair and reasonable since other tourist destinations collect higher amounts as environmental fee. We also believe that sustainable tourism done through preservation efforts is a must and a shared responsibility with those who benefit from the fruits of a well-maintained tourist spot.
But that is if the city would be able to maintain tourist arrivals that would pay enough to cover the annual amortization. As a tourist destination that has already become a year-round choice for recreation among tourists, it would be great to think that the city would be able to fund a project that will improve its image as a sound and environment-friendly city.
Given the volatility of the economy, and barring unforeseen circumstances that could adversely affect the flow of the city’s lifeblood provided by its tourism industry, the city cannot be assured 100 percent of a steady cash flow that would prevent it from defaulting in its loan payment.
It is not that we do not trust in our city’s capability to retain its hold to being a top favorite destination, but it is too risky for us to count the eggs before it hatch.
We need to realize that the loan will bind the city for a considerable number of years. It is therefore crucial for the current leaders to consider the repercussions of its moves today to the future leaders and constituents of the city, who will bear the burden of paying off the obligation.
We fully acknowledge the need for the city to address the sanitation and environment concerns caused by a sewerage network that has not been on tiptop shape for a long time now, putting at risk the health of residents and the image of the city. Until now, we cannot bear being branded having a water body whose contamination level is worse than Manila Bay. We also cannot afford to have another outbreak that involves the safety of water and food we consume, among other concerns.
But we believe the city must take extra caution and review its plan to loan. It should consider other options, like undertaking the project in phases and spend within its means, tapping other agencies such as the Baguio Water District to share the financial requirements and responsibility for the sewerage rehab, or at least come up with a realistic plan B if the proposed loan turns out to be the only alternative.
We should talk to the Baguio people, by way of honest to goodness consultations, and consider their thoughts about the project, since it is their and the city’s future we might be mortgaging in the process.
May 9, 2024