Thursday, February 24, 2005

When the fat lady sings

When the fat lady sings

Posted 09:50pm (Mla time) Feb 23, 2005
By Juan Mercado
Inquirer News Service

Editor's Note: Published on page A12 of the February 24, 2005 issue of the Philippine Daily Inquirer

"YOUR grandchildren's children will be grateful," Mayor Tomas Osmeña proclaimed when worried taxpayers asked him how much they will pay for the Cebu City South Reclamation Project's yen loans.

"Not a centavo," he claimed in that May 1997 statement. The national government would pick up the tab. But he ducked, even then, the question of how much.

Last Sunday, City Hall officially admitted that it ladles out P1 million daily to pay for the interest alone. Come September, the first payment of the principal, amounting to P500.5 million, kicks in. A last payment of P333.8 million comes in 2025.

"By 2025, Osmeña will no longer be mayor," the Cebu Daily News pointed out. "All things pass, and we along with them...But our grandchildren will be still saddled with the tabs then. No basta decir adios. It's not enough to say goodbye."

In the next 20 years, City Hall must "cough up about P10 billion" to pay the Land Bank, Japan Bank for International Cooperation and the national government.

As principal repayments start, a full quarter of Cebu City's budget is hocked for the IOUs. That's one out of every four-tax peso. It will slice into basic services, Osmeña grudgingly admits.

Thus, he'll shelve purchases of heavy equipment critically needed for upland barangays. There'll be little to augment skimpy services, like health, currently pegged at P93 million a year.

"People of the short straw" suffer. Iodine deficiency afflicts 29 out of every 100 kids in the city. And one out of every four pregnant women is short of vitamin A.

"Man does not live by words alone, although sometimes he has to eat them," US presidential candidate Adlai Stevenson once said. As Osmeña munches his grandiose claims, many ask: How did a good project go wrong?

Currency gyrations for one. The Tokyo IOUs were contracted for when the dollar fetched P25. The value of the peso plummeted and hovers at P54 to a dollar today. So, the IOUs have "imploded."

The original P2.3-billion loan has bloated to P6.2 billion. And so has the repayment burden for every man, woman and child within Cebu. Each is now strapped with a tax repayment burden of P86,821--up from P31,996 at the loan signing. Compare that with the P44,548 national debt burden of every Filipino.

Currency fluctuations are, of course, beyond the good mayor's control. But measures to cushion them are. He flunked them.

Take out insurance against peso fluctuations, former adviser Samuel Darza suggested. The mayor scoffed.

Follow your father's example, a London School of Economics adviser suggested. Mayor Sergio Osmeña swapped land for debt. That way he insulated the budget of basic services from debt clams. His honor snorted louder.

"We Osmeñas think we are God's gift to man," explained a senior member of the clan. "Many of us try His chair for size."

Thus, Mayor Osmeña brooked no questions on the loan. A Mafia-like omerta muzzled a thoroughly cowed City Council for years.

"Continued smudging of City Hall's spiraling foreign debt is clamped in place by a seraglio (harem) of eunuchs in the Council," the Sun Star pointed out. This is a mayor who rewards "subservience handsomely." But he whittled down the citizens' role to paying the bill.

No business group or NGO asked the tough questions even as the debts spiraled. It was left to hard-nosed investigative reporters who stripped away the data blackout, revealing lack of a credible repayment policy. Most were women, from Cebu Daily News' Rainne Tecson to Sun Star's Jamin Sumaoy and Ginging Campana, among others.

"[These] are not a gift from Japan. These are loans our grandchildren will have to pay," the Cebu Daily News stressed in "Please pass the can opener." "But Osmeña and Company always downplayed this hard fact" the May 10, 2000 editorial added. "Even a Political Science 101 student knows better..."

"Many crucial issues of our national life have been removed from the agenda of public discussion," the Inquirer noted. And the last election in Cebu was notable for silence that enveloped the debt issue. "Our lives begin to end on the day we become silent about things that matter."

In its editorial "Right hand, left hand IOUs," the Cebu Daily News pointed out: "Osmeña lopped off P60.9 million from the JBIC's loan to pay-who? The JBIC. That's who. Money hocked from Tokyo is to pay off Tokyo, plus interest on the interest. We paid with the left hand what the right borrowed."

The Commission on Audit complained that City Hall "window-dressed" its books by understating its yen loans by P1.52 billion, revealed the Inquirer in a July 20, 2004 commentary.

This laundering resulted from using obsolete 1996 exchange rates. Stop using imaginary figures and use the real rates, the COA said. So, who is fooling whom?

Threat is a standard Osmeña weapon. He'd sue the national government if it drags its foot on issuance of titles. Investors buying could end the cash flow crunch that has left him twisting in the wind.

Back in 1997, the Sun Star challenged the mayor's propaganda on the milk-and-honey nature of his loans. "Let it be for now," that commentary suggested. "It ain't over until the fat lady starts to sing. When the collection bills are presented, that's when the fat lady will sing."

With another repayment bill of P619 million due next year alone, the fat lady isn't just clearing her throat. She's singing-with gusto.


Post a Comment

<< Home