Transparency thresholds
Transparency thresholds
Updated 01:28am (Mla time) Nov 18, 2004
By Juan Mercado
Inquirer News Service
Editor's Note: Published on page A12 of the November 18, 2004 issue of the Philippine Daily Inquirer
"ARE they serious?" our neighborhood bank manager asked. "They'd hire a consultant to figure out how much Cebu City's yen loans for the South Reclamation Project (SRP) cost in pesos? My assistant can do that in her sleep."
She was incredulous that over 18 councilors, confused over how much Mayor Tomas Osmeña's IOUs really amount to, will dun taxpayers in today's devalued peso.
It depends on whom you talk to. City Hall accountant Edna Jaca claims Cebu only owes P2.26 billion. The debt is almost triple that, counters, City Treasurer Tessie Camarillo. It is P6.36 billion.
"We're facing two different sets of figures," a puzzled Vice Mayor Michael Rama told equally stumped colleagues. "How much really is our foreign debt?"
Don't ask Osmeña who stonewalls on the debt. But his city accountant uses the conversion rates prevailing in 1996 when he signed for the loan. Under this "first set": debt repayment burden on every man, woman and child, who lives within city limits would be a tolerable P31,400.
But currency depreciated from P26 to the dollar then to P56 today, the city treasurer notes. She factored actual rates into Cebu's 2005 budget. The Commission on Audit's Helen Hilayo backs the treasurer, saying: obsolete rates doctor actual debt by P1.52 billion.
Under the "second set," per capita debt repayment would be P87,643. Wait. There's more. Councilor Gabriel Leyson says his calculator totals Osmeña's IOU at P4.3 billion. That's a third opinion. Dusting off their math, councilors came up with yet a fourth guess: P6.3 billion.
"There must be some way out of here," the joker says to the thief in Bob Dylan's song: "All Along the Watchtower." "There's so much confusion/I can't get relief."
Temporary relief is a councilors' executive session where they'll try sorting it out. But a "your-guess-is-as-good-as-mine" approach won't wash with the Tokyo bill collectors.
Neither will debts "fold its tents like the Arabs and silently steal away." They will, in fact, increase. "They were stunned by interest totals last year," Sun Star reporter Ginging Campaña noted. "They were stunned this year. And they'll be stunned next year because payment for principal begins."
The problem, however, is more basic: Osme¤a never crafted a debt management policy. He has no such policy today. And it'll take more than a consultant to cobble one tomorrow.
City Hall has no policy on food security, peri-urban areas, youth, transport, migration -- and yen loans, Cebu Daily News editorials noted. The mayor shuns transparency. But (this) "provides temporary sanctuary from accountability-but a bumper harvest of problems."
The city now reaps what it sowed. "Capacity (of the whole government) to service foreign debts has weakened over the years," the national treasurer notes. Cebu's going into hock is part of the overall P1.14 trillion outstanding foreign IOUs. And there's been a shift away from yen-denominated loans: from 47 percent to 34 percent.
It's critical to develop a strategy to ensure that foreign liabilities don't bankrupt the city. This requires thinking through risk factors, debt service burdens, lowering of financing costs, balancing budgets to flatten the debt's trajectory, etc.
"He that goes a-borrowing, goes a-sorrowing," the 1593 proverb says. The council's anxious questions are the first tentative stab to get a fix on the quagmire. This is welcome. For over a decade, a council dominated by the mayor merely murmured amen.
"Secrecy on city finances is clamped in place by a harem of eunuchs known as the city council," the Sun Star observed. No one put His Honor's "feet to the fire with the tough questions ... This mayor rewards subservience handsomely. But his tolerance for independent thought is thin."
Will crushing debts see Osmeña shift to transparent governance? His statements don't hint of a "Saul-on-the-road-to Damascus" change ahead.
No one expects the mayor's addresses to compare with Cicero's "First Oration Against Cataline" (43 B.C.) or Martin Luther King's "I Have A Dream" (1951). But cliché-laden speeches ill serve cities being swept into 21st-century change.
Osmeña's inaugural address proposals were limited to legalization of cockfighting and better tax collection. "Not exactly the stuff of radical reform." His last State-of-the-City speech discussed his awards, school kids' contributions, etc. But it zippered up on yen loans, malnutrition and a deepening water crisis.
When people today cast about for governance models, they look to Naga City. Cebu Daily News editor in chief Ivan Suansing explains why.
A Ramon Magsaysay Award winner, Naga City Mayor Jesse Robredo “isn't as swashbuckling as Tomas Osmeña ... Yet, this unknown Bicolano has transformed Naga into one of the Philippines fastest-growing economies" with a transparent government that brings in world experts.
Robredo has structures that give citizens a say in decisions, from budgets to schools. Procurement bids go on the Internet. So do government forms. Corruption and project costs are down. Government forms are accessible. "With hits of up to 1,300 a day, this website has been hailed as a people empowerment tool."
It is the opposite of what prevails in Cebu where the question is: What's the threshold for transparency? A per capita repayment burden of P31,400? Or is it P87,643?
Updated 01:28am (Mla time) Nov 18, 2004
By Juan Mercado
Inquirer News Service
Editor's Note: Published on page A12 of the November 18, 2004 issue of the Philippine Daily Inquirer
"ARE they serious?" our neighborhood bank manager asked. "They'd hire a consultant to figure out how much Cebu City's yen loans for the South Reclamation Project (SRP) cost in pesos? My assistant can do that in her sleep."
She was incredulous that over 18 councilors, confused over how much Mayor Tomas Osmeña's IOUs really amount to, will dun taxpayers in today's devalued peso.
It depends on whom you talk to. City Hall accountant Edna Jaca claims Cebu only owes P2.26 billion. The debt is almost triple that, counters, City Treasurer Tessie Camarillo. It is P6.36 billion.
"We're facing two different sets of figures," a puzzled Vice Mayor Michael Rama told equally stumped colleagues. "How much really is our foreign debt?"
Don't ask Osmeña who stonewalls on the debt. But his city accountant uses the conversion rates prevailing in 1996 when he signed for the loan. Under this "first set": debt repayment burden on every man, woman and child, who lives within city limits would be a tolerable P31,400.
But currency depreciated from P26 to the dollar then to P56 today, the city treasurer notes. She factored actual rates into Cebu's 2005 budget. The Commission on Audit's Helen Hilayo backs the treasurer, saying: obsolete rates doctor actual debt by P1.52 billion.
Under the "second set," per capita debt repayment would be P87,643. Wait. There's more. Councilor Gabriel Leyson says his calculator totals Osmeña's IOU at P4.3 billion. That's a third opinion. Dusting off their math, councilors came up with yet a fourth guess: P6.3 billion.
"There must be some way out of here," the joker says to the thief in Bob Dylan's song: "All Along the Watchtower." "There's so much confusion/I can't get relief."
Temporary relief is a councilors' executive session where they'll try sorting it out. But a "your-guess-is-as-good-as-mine" approach won't wash with the Tokyo bill collectors.
Neither will debts "fold its tents like the Arabs and silently steal away." They will, in fact, increase. "They were stunned by interest totals last year," Sun Star reporter Ginging Campaña noted. "They were stunned this year. And they'll be stunned next year because payment for principal begins."
The problem, however, is more basic: Osme¤a never crafted a debt management policy. He has no such policy today. And it'll take more than a consultant to cobble one tomorrow.
City Hall has no policy on food security, peri-urban areas, youth, transport, migration -- and yen loans, Cebu Daily News editorials noted. The mayor shuns transparency. But (this) "provides temporary sanctuary from accountability-but a bumper harvest of problems."
The city now reaps what it sowed. "Capacity (of the whole government) to service foreign debts has weakened over the years," the national treasurer notes. Cebu's going into hock is part of the overall P1.14 trillion outstanding foreign IOUs. And there's been a shift away from yen-denominated loans: from 47 percent to 34 percent.
It's critical to develop a strategy to ensure that foreign liabilities don't bankrupt the city. This requires thinking through risk factors, debt service burdens, lowering of financing costs, balancing budgets to flatten the debt's trajectory, etc.
"He that goes a-borrowing, goes a-sorrowing," the 1593 proverb says. The council's anxious questions are the first tentative stab to get a fix on the quagmire. This is welcome. For over a decade, a council dominated by the mayor merely murmured amen.
"Secrecy on city finances is clamped in place by a harem of eunuchs known as the city council," the Sun Star observed. No one put His Honor's "feet to the fire with the tough questions ... This mayor rewards subservience handsomely. But his tolerance for independent thought is thin."
Will crushing debts see Osmeña shift to transparent governance? His statements don't hint of a "Saul-on-the-road-to Damascus" change ahead.
No one expects the mayor's addresses to compare with Cicero's "First Oration Against Cataline" (43 B.C.) or Martin Luther King's "I Have A Dream" (1951). But cliché-laden speeches ill serve cities being swept into 21st-century change.
Osmeña's inaugural address proposals were limited to legalization of cockfighting and better tax collection. "Not exactly the stuff of radical reform." His last State-of-the-City speech discussed his awards, school kids' contributions, etc. But it zippered up on yen loans, malnutrition and a deepening water crisis.
When people today cast about for governance models, they look to Naga City. Cebu Daily News editor in chief Ivan Suansing explains why.
A Ramon Magsaysay Award winner, Naga City Mayor Jesse Robredo “isn't as swashbuckling as Tomas Osmeña ... Yet, this unknown Bicolano has transformed Naga into one of the Philippines fastest-growing economies" with a transparent government that brings in world experts.
Robredo has structures that give citizens a say in decisions, from budgets to schools. Procurement bids go on the Internet. So do government forms. Corruption and project costs are down. Government forms are accessible. "With hits of up to 1,300 a day, this website has been hailed as a people empowerment tool."
It is the opposite of what prevails in Cebu where the question is: What's the threshold for transparency? A per capita repayment burden of P31,400? Or is it P87,643?
posted by Dante at 10:36 AM
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