Talk back: Half-truths, lies, and the South Road Properties

Sun.Star
Friday, May 04, 2007

By Paul Villarete
Project Manager

ARDHA-Satya Mithya Apeksa Bhayankara. It’s an old Bengali proverb which roughly means, “Half-truth is more dangerous than falsehood.” Another Yiddish proverb states exactly the same thing: "A half-truth is a whole lie."

And half-truths take many forms. Sometimes, it’s mere exaggeration, but oftentimes, it’s stating minimal facts while hiding other more meaningful ones. Whatever it is, the intention is to lie or deceive.


Mary Ann de los Santos’ facts

Let’s try to look at Mary Ann’s alleged facts:

1. The City owes JBIC P7.6 billion for the SRP: The outstanding balance of the loan from JBIC is Yen 11,092,600,000 (source: Land Bank of the Philippines).

Using an exchange rate of 1 Yen = 0.3969 Pesos (Banko Sentral ng Pilipinas, May 3, 2007), the total outstanding loan of Cebu City from JBIC is P4,402,652,940.00. The P7.6 Billion figure is not true, not even a half-truth, but is actually an absolute lie.

2. Every man, woman and child in the City share a debt burden thereon of roughly P70,000.00: If what she says is true and knowing that the population of Cebu City is at least 718,821 (NSO census, 2000), then the total debt of the city must be P50 billion! It’s a flat blatant lie meant to deceive the minds of Cebuanos she wants to be mayor of.

3. The City is paying almost P2 million a day for debt service: In 2006, the City’s amortization was only P566,932,279.97 or approximately 1,553,239.12 a day. The figure given was another exaggeration which is a half-truth meant to sway people’s minds.

But what is significantly withheld is the fact that as of today, one-third of what was remitted actually went to, and became an income of, the national government. The exaggeration and intentional withholding of facts indicates the intent to deceive the public with half-truths.

4. Real estate taxes, business taxes and license fees have been increased tremendously in order to service debt of SRP: One may wonder where the “tremendous” increases are. Increases, if there are any, had been pursuant to the Local Government Code, which mandates such, and not to service debt. It is significant to note that the Code even allows sourcing of funds through loans while limiting debt servicing to 20% of budget, and the City has not exceeded that cap.

To even suggest that incurring such debt payments, which is clearly allowed by the framers of the Local Government Code, is a bad provision of law, makes those honorable gentlemen and ladies, and Congress itself look like idiots! The statement is not true.

Tragedy

But what happens if we imagine of the unrealistic scenario that Mary Ann does win and become mayor?

This kind of tragedy will kick in:

1. The entire SRP is mortgaged to the Land Bank of the Philippines, which means that “turning over” the SRP means going to the LBP and asking them to foreclose on our property because we are unwilling (as opposed to unable) to service our loan.

2. Granting that can be accomplished, we will immediately lose our credit standing, not just with LBP, but will all other banks (domestic and foreign) that will see a Cebu that copped-out of a financial obligation without even trying to make it work. No financial institution, in their right mind, will lend a centavo to a City under this kind of a Mayor.

3. If Mary Ann thinks she can run the City without debt, then God help us…hello, are you on planet Earth? Advanced countries like Germany and Japan used to be the most debt-ridden among the rest, and it is precisely that they have access to capital that they were able to develop! Even Australia has a higher debt than the Philippines.

Half-truth

The debt to every Cebuano is a half-truth. What is conveniently hidden that with the P5 billion loan, we have a property which has a value of at least P15 billion. And that’s even a conservative estimate with the actual value probably ranging from P25 – 35 billion. For every debt a Cebuano is supposed to owe, he/she owns property three to seven times worth.

This is not to mention the other benefits of employment and economic production the SRP will bring in that land we call the SRP that we, each and every Cebuano own. Now, a candidate for mayor proposes to throw that away? Give back to national government P25-35 B worth of properties just to escape the P5 B debt? She’s not even mayor yet and she’s escaping problems instead of facing and solving them head-on as a mayor should.

And throw away P25 – 35 B of our property?

The inadequacies of the City, including all those mentioned by Mary Ann existed before debt-service on the SRP started.

Even without the SRP, the Cebuanos, and their mayor will face the same problem, as any other city in the Philippines or any other developing country. I agree with Joel Mari Yu. “Let us not be our own worst enemies, which is what the international community thinks of us. The SRP is not just a revenue stream, it is our future. We need it to grow, physically and economically, and no Cebuano should doubt this.”

South Reclamation Project