Is it wise to use P500M to buy 93-1 assets?
This week opened with a bit of good news. It was reported that two gentlemen representing the provincial government of Cebu and the city of Cebu because they are the respective heads of these local government units, met and agreed on settling the main issue of the Provincial Ordinance No. 93-1. If the agreement is fully executed, (a) the province will have monetized its non-performing real estate assets, (b) the governor will have advanced his political stock, and (c) thousands of families will have won their battle for a place in the sun to call their home.
As a backgrounder, Ordinance No 93-1, deals with the several parcels of land owned by Cebu Province. These properties are located in many barangays in Cebu City and are occupied by thousands of "informal settlers", a term used to remove the stigma associated with squatting. The occupancy by these settlers deprived the province from fully utilizing the value of these assets. Ejecting the occupants had adverse social repercussions that were difficult to accept.
In the year 1993, then Gov. Vicente de la Serna, thought of a brilliant idea. He asked the provincial board to pass an ordinance that would allow the settlers to pay the lots where they erected their homes on. I was told that the price was, from the point view of the real estate people, ridiculously low but it was so pegged in order to encourage the builders to avail of the program. There was also a reasonable time frame set to effectuate the payments.
Time proved that the "brilliant idea" was not brilliant after all. Only a small fraction of the intended beneficiaries took advantage of the program. They religiously paid what was due from them and eventually got their individual land titles. But, for a number of reasons, not excluding the sinister thought that whether government liked it or not, the occupants would own the land just the same, the majority did not bite the offer. So, the program of Gov. de la Serna failed to work.
It was reported that two honorable officials, Gov. Hilario Davide III and Cebu City Mayor Michael L. Rama agreed that the province would sell the subject assets and the city would buy them.
There is weight to the thought that the province could not and would not eject the occupants settling on its land. And so, it was saddled with a ridiculous situation of owning valuable lots yet unable to make use of them. Selling these properties to any taker would be the best solution to the problem. When Gov. Davide III and Mayor Rama agreed on the sale of these assets, the province stands able to generate hundreds of millions of pesos from these parcels of land. The P500 million reported payment by the city to the province is going to be unexpected manna from heaven.
The report said that there are about 5,000 family homes standing in these parcels of land. These families come from and are rooted in the towns outside of Cebu City. In fact, many of them go back to their places of origin during election. Considering that only about one fifth of them availing of Ordinance 93-1, the remaining house owners could be legally ejected anytime. With the security of their stay being settled with the purchase by the city of the lands, they shall be grateful to the governor. The election of 2016 is the best time to express their gratitude to the governor.
Let us however take note of the sum involved. P500 million will be taken out of the Cebu City coffers to pay for these province-owned lots. If the settlers refused to pay the province, we cannot expect them to have a change of attitude. The money to be used by the city is going to be a lost fund. If there are 4 members in each of the 5,000 families, mathematically, the city is using P500 million to favor 20,000 residents, not all of whom are city voters. I thought, the city had to borrow money to build a much needed billion peso hospital? Mayor Rama, please review this expense.
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