‘UNTIMELY, INSENSITIVE’: Proposed Iloilo RPT hike may hit business, consumers

By Rjay Zuriaga Castor

The Riverside Group of Companies has opposed the proposed increase in property values tied to another round of real property tax (RPT) adjustments in Iloilo City, calling the move “untimely and insensitive” amid rising inflation and economic uncertainty.

In a statement during the city government’s public consultation on April 1, the company urged officials to reconsider the proposed adjustments and instead prioritize measures to ease the financial burden on residents and businesses.

“The proposal to increase property values is untimely and insensitive. Instead, City Hall should find ways to cushion the financial suffering brought about by spiraling inflation,” the group said.

The Iloilo City Assessor’s Office conducted a public consultation with real property owners and stakeholders on the proposed Schedule of Market Values (SMV) from March 30 to April 1.

The consultation complied with the Real Property Valuation and Assessment Reform Act (RPVARA), or Republic Act No. 12001, which introduces a new round of nationwide real property valuation adjustments.

The RPVARA replaces multiple outdated valuation bases with a single, market-value-based SMV approved by the national government. The SMV serves as the basis for computing RPT.

The law caps the RPT increase in the first year of a new SMV at 6 percent of the prior year’s tax to prevent sudden spikes in tax obligations.

In subsequent years, local government units may pass ordinances to cap further RPT increases to protect taxpayers while still updating property valuations.

For many properties, updated SMVs mean higher assessed values, which can translate into increased RPT over time if assessment levels and tax rates remain unchanged.

However, the law also provides that higher valuations do not automatically result in significantly higher taxes, as local governments may adjust assessment levels or tax rates to offset increases.

Mayor Raisa Treñas-Chu has proposed a 2 percent cap on RPT increases to cushion taxpayers from the potential impact of the updated valuation system.

The Riverside Group warned that if another RPT increase—estimated at 10 percent to 14 percent over the next three years—is implemented, the added cost will likely be passed on to tenants, businesses, and consumers through higher prices.

“With respect to the Riverside Group of Companies, the proposed increase this time ranges from 10% to 14%, all in just three years. Is this sustainable for those on the receiving end – the consumers?” it said.

The group said higher RPT on leasing businesses is typically passed on to tenants, who may then transfer the additional costs to consumers.

For restaurants and similar establishments, this could result in higher menu prices, it added.

The company also argued that while the city government may offer discounts, these would not fully offset the financial impact on businesses.

“The mere grant of token concessions in the form of a discount that can be granted, withdrawn, increased, or decreased any time by those in power is not the proper remedy. The people should not be placed at the mercy of City Hall,” it said.

In 2024, Iloilo City implemented an RPT increase after nearly two decades without a major valuation revision, prompting public scrutiny and the eventual grant of tax discounts.

Riverside said that by 2024, about 60 percent of the income of Riverside Boardwalk Properties Inc. (RBPI) had gone to the city government for RPT despite a 40 percent discount.

It added that income from its joint venture with Ayala Land subsidiary Sunnyfield E-Office Corp. for the Ayala Techno Hub fell to one-fourth of the previous year’s level.

“The recent massive increase in RPT when business was still recovering from the COVID-19 pandemic lockdown impacted Riverside Holdings Corporation (RHC) to the extent of 1,000% and RBPI to the extent of 1,400%,” the group said.

It also cited road lots opened to the public that do not generate income but experienced RPT increases of more than 14,000 percent.

“To cope with this imposition, RHC was forced to implement increases in rentals. These increases were just incremental and not as massive as the RPT increase, and therefore not enough to offset it,” it said.

The group said the RPT increase has already contributed to business closures, additional charges, and financial strain on its operations and stakeholders.

It added that by 2025, two lessees at the Riverside Boardwalk had ceased operations, while another tenant closed this year.

To cope with higher tax obligations, RBPI imposed street parking fees, which it described as a measure it had hoped to avoid passing on to the public.

The company also disclosed that some of its properties, including family-owned lands held for more than a century, have been offered for sale.

Riverside added that its stockholders have not received dividends since the implementation of the substantial RPT increase.

“For a city with a population of only around half a million, can this really be sustained? Such considerations were the reasons why the Riverside Group was forced to file a case in the Supreme Court to challenge the massive imposition of an increased RPT,” it said.

The company said global tensions affecting oil supply routes, including disruptions in the Strait of Hormuz, have already driven fuel prices higher, creating a ripple effect on transportation, production, and the cost of basic goods.

“We suggest that City Hall show empathy to the people by allowing businesses who employ Ilonggos to recover from the pandemic and face the grave challenges posed by the deteriorating situation in the Middle East,” it said.