Mathay pushes establishment of QC bank

A bank owned by the Quezon City government?

Mayor Ismael Mathay certainly wasn't joking when he broached yesterday a proposal to put up the First National Bank of Quezon City and not even a recent banking fiasco could dampen his enthusiasm about it.

Mathay said the Quezon City Hall needs a mechanism to address cash flow problems and a vehicle to chart its own financial course, arguing that a bank owned by the city government would meet that need.

"Self-government is the essence of this measure," said the mayor, citing Article X, Section 5 of the 1987 Charter, which empowers local government units to create their own sources of revenue.

Mathay's proposal goes against the grain of current economic ideology espoused by the national government, which is premised on privatization of government corporations.

Budget Secretary Benjamin Diokno has said the national government is pursuing a new tack on governance, which contracts out public services to the private sector. This way, the government is able to use its resources efficiently, leaving business to people who know best how to run it -- the business sector.

The mayor envisions the proposed First City Bank of Quezon City (FCBQC) to serve as the city's depository of the people's tax money, which are currently deposited in both private and national government -- controlled financial institutions.

He also wants the FCBQC to serve as a lending institution, catering to the financing needs of city-based enterprises. "High bank interest and its pawnshop mentality stun growth," said the mayor. "This bank can offer low interest rates as its ownership base -- the people -- at large, is a cheap source of money."

He said the proposed city bank would draw capitalization from a certain percentage of community tax certificates converted as people's equity and municipal bonds floated for that purpose.

Surplus funds and savings will also be used to shore up the bank's funds. He said the bank would have a wide base of ownership as its capitalization would be drawn chiefly from public contributions. He also plans to invite Quezon City's sister-cities and city residents working abroad to invest in the bank.

Mathay, who is in his last term of office, did not say how much money putting up the bank would require.

"Under the prevailing system, the people have no way of monitoring the local government's financial resources, he said. "As stockholders, the people are empowered to check the actual amount of cash their government has on deposit."