ILOILO City – Former Finance Secretary and economist Dr. Jesus P. Estanislao defended Iloilo City’s 300 percent real property tax (RPT) hike as a long-overdue adjustment after nearly two decades of inaction, but cautioned that a sudden implementation risks burdening taxpayers unless tempered with transparency and phased rollout.
“Taxation is always related to what is being done with the tax that is being collected,” Estanislao said in an interview after the Management Association of the Philippines forum in Iloilo City on Aug. 29.
He added: “If the city government is not doing anything and simply divert all that money to non-purposes, I will oppose it very strongly. But if the City of Iloilo is increasing taxes and at the same time using all of that money to construct the public schools that Iloilo City use, I think the entire community will go along. It’s for the good of Iloilo City — you pay more taxes because we need more public services.”
Still, Estanislao caution against enforcing the full 300 percent adjustment in one blow.
“Maybe it comes down with the implementation. I do not know about the facts. But it seems to me that 300 percent over 18 years is not unreasonable,” he said.
As to the way it is implemented, Estanislao said, “I would structure it so that instead of 300 percent all in one year, you can make it over a period of five years or seven years, to make it reasonable. Not abruptly.”
In response to public backlash, the city government has in fact granted a 40 percent discount on RPT payments until 2028 to cushion property owners from the steep increase.
Estanislao cited the lack of classrooms and locally funded teachers raised by former mayor Jerry Treñas as legitimate needs.
“Mayor Jerry was talking about public schools — not enough school buildings, not enough funding for locally hired teachers — and what you have here, that’s real. But those who benefit it? For Iloilo,” Estanislao said.
While he declined to issue a definitive judgment on City Hall’s financial management, Estanislao noted Iloilo City’s fiscal independence had improved.
“I don’t know enough about the local finances of Iloilo (City), so I cannot make it on me. But from what I know, in the Department of Finance, we take a look at how cities are performing in terms of fiscal prudence. From what I know, the dependence of Iloilo on the IRA (Internal Revenue Allotment) has dramatically gone down, because they collect more local taxes. And so the question is rooted in that fact,” he said.
He further clarified that RPT hikes would not significantly drive inflation.
“It (inflation) is a bigger issue, it is not local. It is regional and eventually national. So, that is a separate issue,” he explained. “The collection of taxes would determine the ability of local government to undertake public projects for the good of the citizenry. So now what you need to do is to look at the actual expenditure of the City of Iloilo — where all this money go, or the fact that you agree with the priorities of the city. And normally the city must give top priority to education, to health and to public works.”/PN
