State auditors have flagged Baguio City officials for a 2023 land deal in Benguet that allegedly inflated property costs to extreme levels. The city government paid P101.46 million for two parcels of land in Tuba, Benguet, ignoring official valuation standards, auditors said. The Commission on Audit noted the Bureau of Internal Revenue's zonal value at only P10 per square meter, while the city paid P1,500 per square meter—154 times higher.
In 2023, Baguio City's government purchased two parcels of land in Tuba, Benguet, totaling 35,407 square meters in Tupinao and 36,514 square meters in Takian. The Commission on Audit (COA) reported that the Bureau of Internal Revenue (BIR) zonal value stood at P10 per square meter, equating to P635,850 for the entire area, while the fair market value based on the tax declaration was only P141,190. However, the purchase price was P1,500 per square meter, totaling P101.46 million—154 times the zonal value.
The acquisition was funded from the city's 20% Development Fund via a 2020 supplemental budget approved by the city council. COA stated that this fund should support only priority development projects outlined in the local government's development plan and investment programs, per a late 2020 joint circular from the Department of Budget and Management, Department of Finance, and Department of the Interior and Local Government. Such projects must be essential for efficient governance and public welfare.
In a letter to the city council requesting the supplemental budget, the mayor described the lots as part of the local government's “land banking strategy for future sale or development.” Yet, COA's review of the City's Local Development Investment Program and other plans found no specific development project identified or programmed for the Tupinao lots.
Responding to COA, the city government said the properties were earmarked for social housing projects. It noted consultations with various officials, including legislators and COA. “The good faith and the due diligence exercised by the city officials accompanied with the exigency of taking advantage of the offered price justifies the acquisition of the Topinao lands,” the city stated. The transaction was initially halted after a COA Notice of Suspension but proceeded once lifted, with the city claiming full compliance with requirements.