Conclusion
TO solve the stink of Baguio’s sewage problem, the city government has to build a new sewage treatment plant that will serve the city’s growing population of 350,000, as well as the 1.6 million tourists who flock there every year.
But the city is now grappling with the problem of funding. Does it borrow from the Asian Development Bank (ADB) and be saddled with a debt for the next 30 years, or does it tighten its belt and pay through the nose from the city’s coffers?
To realize the goals of the Baguio Resilient City Tourism Project (BRCTP), the city would have to decommission the existing Baguio Sewage Treatment Plant (BSTP) and build a new one with an increased capacity of 12,000 cubic meters per day, from the current 8,000. It would also have to replace and rehabilitate six kilometers of the main sewer to accommodate 5,700 new connections, future and progressive expansion work, other technical aspects and operational expenses requiring a funding of P2.6 billion.
The city has a tight annual budget of between P2.5 billion and P2.7 billion, covering basics such as salaries, maintenance and operational expenses, among others. The DPWH, despite its mandate to build sewer treatment plants, has its own backlog to deal with, and the hefty cost of rehabilitating the BSTP is beyond its budget. Mayor Benjamin Magalong explained that the city cannot afford the interest rates of a bank loan.
The lifeline: a loan of $46.77 million or P2.6 billion offered by the ADB.
The city council, however, has withheld its approval because its members were worried the city lacks the capacity to repay such a huge loan.
The City Fecal Sludge Management Plan 2021-2050
IN preparation for the interventions needed for the BRCTP, the ADB also financed a city fecal sludge management plan for 2021-2050, which the city completed in 2019 under the City Environment and Parks Management Office (CEPMO).
A survey was conducted by ADB local representative, Angelina Victoria Ferrer; the City Planning and Development Office headed by Antoinette Anaban and the CEPMO, headed by Rhenan Diwas in 2020. The survey consisted of in-depth interviews among a random sampling of 1,609 households with representatives from the four catchment or river areas.
The survey found that only 22 percent of fecal sludge is managed safely; 78 percent ends up in the surrounding environment. Only 13 percent of households have requested for septic tank emptying and usually only when a problem occurs. The survey also found that communal septic tanks discharge effluents into open drainage manholes.
Although the city has an ordinance requiring desludging every four years, this is not followed.
The survey also found that some 40 percent of the city’s total sludge is surreptitiously dumped into rivers or open sewage manholes by private desludging service providers. This is usually done at night, under the cover of darkness.
Asked whether they were willing to pay for sludge emptying services, 86 percent of household respondents said they were willing to, at hand or right after the service, while the rest prefer the desludging fee to be included in their water bill.
The surveys determined that a sanitation fee must be collected and a desludging interval of four years must be enforced. A scheme to repay the ADB loan was also formulated.
Repayment scheme for ADB loan
WHILE the ADB loan may seem like a last resort, the city council is divided. One point of contention is the repayment scheme, which includes the collection of sanitation fees and environmental user’s fees.
Under the BRCTP scheme, the collection of sanitation fees will be made by the Baguio Water District (BWD) with a 16-percent markup on the water bill, to increase by 10 percent every three years, the basis being that the volume of consumption approximates the wastewater output of the household. BWD also gets P12 per billing. This replaces the old ordinance, which billed households per toilet bowl, a skewed system which did not work because of the lack of manpower to check every household.
Assuming 41,470 households are connected to the BWD, the city expects an annual revenue of P5,810,710 from 2024 to 2053, which is the year the loan should have been fully paid, given the 29-year repayment agreement.
The consumer will then be spared the burden of paying for the desludging of their septic tanks as this is covered by the sanitation fees in the monthly water bills. This will also ensure that emptying of septic tanks will be done every four years.
Additionally, the city will be imposing on tourists an environmental user’s fee (EUF) of P100 per person per visit with an increase of P20 every three years. Using the yearly baseline of 1,600,000 tourist arrivals and a 3.5-percent growth rate every year, Clemente said the city can generate a potential average revenue of P280 million yearly by 2053, which, together with the sanitation fees, would cover the loan repayment and other costs.
The ADB loan will be coursed through the Tourism Infrastructure and Enterprise Zone Authority (Tieza) as a partner in the BRCTP project. Tieza also has a counterpart obligation in the amount of $2.59 million for training tourism workers on the necessary skills and also for financial charges during the project implementation.
Magalong also shared that the Asean Green Catalytic Financing of the United Kingdom will be contributing another $10 million at zero interest.
Alternatives to loan design
ON April 15, the mayor appeared before the council to stress the urgency of the timely approval of the project. “There are several implications if we are going to delay this,” he said. “The other agencies involved would also lose interest.”
He added, “Also, the DENR is breathing down our neck. If we are going to delay this project, they will impose the penalty,” referring to P6-million monthly fines for one river alone due to pollution.
However, the council decided on the side of prudence rather than haste, and on April 29 passed Resolution 267 authored by Councilor Betty Lourdes Tabanda, “Approving the Baguio Resilient City Tourism Project for Inclusion in the Supplemental Annual Investment Plan,” subject to the submission of all documents.
The council did not approve as of yet the ADB loan, despite all the studies and support it had given for the interventions needed. While there are no issues with the BRCTP project to rehabilitate the sewer treatment, the council has other thoughts on the ADB loan.
To begin with, Tabanda expressed uncertainty about repaying the loan from sanitation and EUFs because these are not guaranteed by any ordinance.
She said one option is to use local funds for some of the expenses to reduce the loan amount. A big portion goes to furniture and fixtures which will not be used right away, she said, but will have to be repaid with interest in dollars as soon as the loan is accepted . “Maybe we can use local funds for these things and meetings on a staggered basis,” she said.
Councilor Peter Fianza finds it ironic that the Baguio Water District will be getting a share from the sanitation fee when under PD 198 or the Provincial Water Utilities Act of 1973, it should be responsible for maintaining water supply and wastewater disposal, which is the way it is with big water distributors elsewhere.
He is also wary of the constitutionality of collecting EUFs even if it is now commonly practiced in other places. “It restricts the right to travel,” he said. There is also the question of how much can be collected.
Fianza also thinks the city can look into using local funds, disputing the claim of City Budget Officer Leticia Clemente that the city has only enough for basic expenses. Fianza points to the city’s unspent funds, but Clemente argues this cannot be touched as these are obligated funds. Fianza insists the city can look into priorities and other funds, noting, for one, that the Botanical Garden alone earned P70 million from entrance fees in 2023.
Despite recognizing the urgency of the BRCTP, Fianza said approving the project outright puts wastewater and sewage disposal entirely on the shoulders of the city, when BWD and DENR should also share in the responsibility.
What the future holds
THE city’s rivers will always serve as a mirror on how the city deals with its sewage problem.
Joseph Zambrano, newly retired government worker, wonders if Balili River will ever again be the recreational spot where his friends gathered to go fishing.
He still remembers his father’s glee whenever he would catch big carps and some goldfish.
He regrets his kids never got to experience these things but is aware of the city’s efforts to solve the river pollution. Who knows, he ponders, maybe, if the city finally rids itself of its dirty secret deep in its bowels, so to speak, his children’s children and their children too may one day again chase dragonflies by the river.
(This story was produced through a grant from Internews’ Earth Journalism network through the Asian Center for Journalism at the Ateneo de Manila.)
