Mati To Declare Bankruptcy If SC Upholds Decision Declaring City Laws Unconstitutional

The City of Mati might declare bankruptcy if the Supreme Court decides to uphold its recent decision declaring the unconstitutionality of the law converting 16 municipalities into cities.

The Supreme Court's decision is considered a victory for the League of Cities of the Philippines which filed last March 11 an opposition to the conversion of 16 municipalities into cities on the ground of unconstitutionality.

Among the cities that will be affected by the SC's decision are: Cabadbaran, Agusan del Norte; Tandag, Surigao del Sur; Bayugan, Agusan del Sur; Mati, Davao Oriental; Tayabas, Quezon; El Salvador, Misamis Oriental; Guihulngan, Negros Oriental; Baybay, Leyte; Borongan, Eastern Samar; Bogo, Cebu; Carcar, Cebu; Naga, Cebu; Tabuk, Kalinga; Catbalogan, Samar; Lamitan, Basilan and Batac, Ilocos Norte.

Mati City Mayor Michelle Rabat, who was interviewed by the media this morning, said "If that happens, we might declare bankruptcy." Rabat and the other mayors of the affected cities are now at a quandary as to how they can get back to their operations as a municipality.

The "unmaking" of Mati alone will result to:
1. lay-off of 600 employees who were hired by the city for new local offices
2. cancellation of the P8 million scholarship program for the city which subsidized the education of 22,000 pupils
3. cessation of the city's health program with 2,400 beneficiaries
4. derail the P5 million budget for the provincial hospital for new rooms and beds
5. cancellation of the P1 million allocation for each of the 22 Mati barangays

Prior to the law in question, the cities were receiving a Internal Revenue Allocation of only P111 million. The new cities received an IRA allocation of P382 million which paved the way for new job opportunities, more public services and bigger investment contracts.