I met Mayor Mike Rama in
our Barug Party gathering and
he was very emphatic of the city’s
desire to house more than twenty thousand structures that will
be displaced by the implementation of the three meter easement
and the coastal rehabilitation
which would extend twenty meters from the coastline.
To make it happen, he
has to build 300 Medium Rise
Building (MRB) to house the
displaced families costing more
than 30 billion pesos. These
funds will be sourced from the
City’s coffers and his investments beggings.
Atty. Jerone Castillo, Mayor’s Assistant on Special Concerns, bared that the city is preparing the relocation sites of all the affected residents.
These people will get attuned to the condominium living condition which is new to
most of them, he said.
But the affected dwellers
have various reactions. Like how
would you like to live with the
situation where your next neighbor is just a wall away. Daghan
kaayong “Maritis” ana, “ one of
my friends who will be affected told me. Kay hastang imo
“hagok”madungog. ( even your
snore can be heard) he added.
But let’s face it Cebuanos
should realize that they have to
learn to co-exist with their neighbors in the same building and
environment. Besides, with the
MRB, lesser displacement from
their workplace would transpire as most of them would be
placed more or less in the same
But the question begging
an answer is how to finance the
huge project? With more than
twenty thousand families to
house, the City would be spending more or less 30 billion with
300 units the mayor plans to
build. Is it doable within his
But before responding to
such queries, let us first discuss what the law provides in
financing MRB. Under Sec.
42 of R.A. 7279 the following
are ways to finance socialized
Funds for the urban development and housing program
shall come from the following
A minimum of fifty percent
(50%) from the annual net income of the Public Estate Authority, to be used by the National Housing Authority to carry
out its programs of land acquisition for resettlement purposes
under this Act;
Proceeds from the disposition of ill-gotten wealth, not
otherwise previously set aside
for any other purpose, shall be
applied to the implementation
of this Act and shall be administered by the National Home
Mortgage Finance Corporation;
Loans, grants, bequests and
donations, whether from local or
Flotation of bonds, subject
to the guidelines to be set by the
Proceeds from the social
housing tax and, subject to the
concurrence of the local government units concerned, idle lands
tax as provided in Section 236 of
the Local Government Code of
1991 and other existing laws;
Proceeds from the sale or
disposition of alienable public
lands in urban areas; and
Domestic and foreign investment or financing through
appropriate arrangements like
the build-operate-and-transfer scheme.
Hence, aside from the City’s
funds, one way to raise the needed money to finance the gargantuan expense is to raise bonds.
But has any Local Government Unit tried to venture this
One Municipality in Negros
Oriental tried this innovative
concept, the municipality of Victorias in Negros Oriental.
The lack of resources in
initiating a low cost housing
program confronted municipal
government of Victorias, Negros Occidental. The leaders of
the Municipality of Victoria, Negros Oriental floated bonds for a
housing project in the locality. A
bond is an instrument of indebtedness sold as IOUs to investors.
Its interest rate was comparable
to the banks.
It took 18 months for the
municipality of Victoria to float
the bonds in July 1994. The flotation of the municipal bond was
enthusiastically received by the
private sector. Investors were
encouraged to use idle funds and
presented the LGU with alternatives in mobilizing resources to
finance its projects.
Later they introduce the
bond, many investors were still
looking for the availability of the
bonds which were insured by the
Home Insurance and Guaranty
Corporation which also acted as
the financial adviser of Victorias.
Other players included the
provincial government which
provided the project equity of P5
million; the Negros Economic
Development Foundation which
acted as developer; and the Philippine National Bank which acted as the trustee bank.
And for the success of its
bond flotation, the municipality is a recipient of the Ten Outstanding Programs in the 1995
Galing Pook Awards.
In reality this is very doable.
We can tap our local banks,
Land Bank for example to act
as conduit and the Home Guarantee Insurance Corporation
as the guarantor for the bond
This can be done Mayor for you to raise your 30
Billion needed resources to
make the city Singapore like.
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