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Tuesday, December 28, 2004
Borrow less, Mandaue advised
ITS borrowings may pale in comparison to other cities but still there is a need for Mandaue City to reduce its loans “so that it will not burden itself from paying interest rates that could otherwise be used for social programs and small capital projects.”
This was among the observations of the City Development Strategy (CDS) report for Mandaue City.
The report was formulated in pursuit of socioeconomic and institutional development and reform with the help of the World Bank, the United Nations Habitat, the League of Cities and the CDS program.
The CDS report also advised the City to be selective in the implementation of projects and programs, giving priority to those that have positive socio-economic effects.
Debt-ridden gov’t
Based on the CDS report, Mandaue’s total revenue in 2001 reached P703.12 million, which is higher by 34.7 percent from that of the previous year.
Part of this amount, though, was derived from loans from government financing institutions.
Mandaue City was able to secure a P250-million credit line from Land Bank of the Philippines to finance, among others, the Gerardo Ouano Rd. extension project.
As of Dec. 31, 2001, the City’s outstanding loans amounted to P236.8 million, the CDS report said.
It also found out that Mandaue’s share of the internal revenue allotment has been decreasing, from 50.5 percent in 1999 to just 25.3 percent in 2001.
The report further noted that Mandaue’s revenue from real estate taxes has been increasing in the past few years, while local tax revenue per capita has been increasing from 1997 to 2001.
“The City needs to implement rigorous selection of its programs and projects to ensure that it only spends on the most effective and efficient social programs and undertake only those capital projects that have positive economic and social effects,” the CDS report said.
Among the strategies that were identified to help remedy the situation is the grant of tax incentives, such as tax holidays and lower tax payments, for certain investors and business locators who meet certain criteria and the implementation of regulatory reforms that get rid of red tape and promote transparency.
Priorities
The CDS report also identified the computerization of the tax collection and payment system, reform in the tax scheme and tax schedule, and a reform in the system of incentives for investors and business locators as priority investments for the City.
The CDS report was made pursuant to the City’s inclusion in World Bank’s CDS II project.
In 2001, Mandaue City was selected as one of the 19 cities in the country to be included in World Bank’s CDS II project, which allocated US$500,000 for the formulation of the respective CDS programs of the 19 cities. (ROV)
(December 28, 2004 issue)
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