COA: Caloocan losing P37M yearly | Inquirer News

COA: Caloocan losing P37M yearly

Audit agency wants ‘disadvantageous’ lease agreement with coop reviewed
/ 09:37 PM August 15, 2011

The caloocan City government could be earning more than P37 million annually if it was directly managing the operations of the Maypajo public market, according to the Commission on Audit (COA).

For this reason, the agency wants city officials to review the lease contract with Maypajo Market Multi-Purpose Cooperative (MMMPC) to see if it can be amended.

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Disadvantageous

In a 2010 report on Caloocan, COA said the 20-year lease agreement with MMMPC—along with the “very low” monthly rental fee for the use of the market—was disadvantageous to the city government.

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It noted that although it had previously questioned the lease agreement, the contract remains unchanged.

In 1994, the city government leased the ground floor of the three-story Maypajo Market to MMMPC for P150,000 a month, with a 10 percent increase every three years. The area is now occupied by some 600 stall owners who remit rent payments directly to the cooperative.

The city government earns P241,576 a month from MMMPC and gets an additional P6,000 from letting three religious groups use the second floor although only one is paying rent. The third floor is being used as a storage area for city property.

According to COA, the government could have earned so much more if it had taken over management of the Maypajo Market.

“Had the city opted to manage the leasing of the entire Maypajo Market based on the rental rates … under the New Revenue Code of the City, it could have generated [an] incremental revenue of at least P37.18 million per year,” it said.

No takers

It also noted that the Caloocan government had tried to get more people to rent space in the market’s upper floors but there were few takers because of its nonstrategic, flood-prone location.

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COA, however, said the city government should continue to look for new occupants to generate additional revenue. It added that Caloocan officials should ask the religious congregations using the second floor to move out so that the space could be leased to other parties.

It also reiterated its recommendation that a technical committee be created to review the agreement with MMMPC to see if it could be revised in the city’s favor.

According to COA, the city government took note of its findings and even promised that a separate technical committee would be tasked to evaluate the market’s operations.

Lack of feedback

The agency, however, said that when it wrote the 2010 report, it had not received any update from Caloocan officials.

When reached by the Inquirer, Jun Paclibar of the city’s Public Information Office declined to comment and said that they were still verifying the information.

“We can’t say anything about that yet. We don’t have a copy of the COA report,” he said in a phone interview yesterday.

The Inquirer also tried to reach Mayor Enrico Echiverri for comment but calls to his office were not returned.

Boy Nicolas, Caloocan’s chief public information officer, was also unavailable for comment. With Kristine Felisse Mangunay

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