Midnight deals

The issue of “midnight deals” often raises concerns about integrity in governance and fiscal responsibility.

Makati City Mayor Nancy Binay recently revealed a staggering P8.96-billion settlement agreement that was signed by the previous city administration just days before she assumed office. This situation exemplifies how such last-minute arrangements can be dangerous.

In Cebu and elsewhere, the practice of signing midnight deals — agreements, contracts,and policies signed just before the end of an administration’s term — is quite common. The practice can be controversial, especially if there has not been adequate scrutiny, as the new administration may inherit obligations or commitments that were not thoroughly evaluated or debated.

Back in Makati, the agreement with Philippine InfraDev Holdings Inc. concerning the now beleaguered P200-billion Makati subway project raised eyebrows, especially since the City Council approved the settlement on 20 June, with the deal finalized on 23 June, effectively binding the new administration to a financial commitment it had no hand in negotiating.

The rushed transaction risks ensnaring the city in a financial quagmire. Binay’s concerns are legitimate — the settlement could jeopardize its economic standing, particularly given the looming deadline imposed by an international arbitration body.

The potential of a $30-million penalty, coupled with accrued interest if the payment is delayed, further exacerbates an already precarious situation. It’s hard to overlook the irony: a project initially aimed at improving transit would now become a financial millstone around the city’s neck.

But why did the previous administration feel the need to rush such a critical decision?

The desire to finalize deals before the transfer of power may lead to skepticism and accusations of opportunism.

Midnight deals often prioritize the interests of established groups over transparency and fiscal responsibility, leaving new administrations to deal with financial obligations created under questionable circumstances.

A recent ruling by the Supreme Court further complicated the ongoing territorial dispute between Makati and Taguig City.

The transfer of jurisdiction over several barangays has made the subway project, which was initially designed to accommodate 700,000 riders daily, “no longer economically or operationally feasible.”

This means that the claims made by Makati’s previous leadership —despite being well-intentioned — are now impossible to realize, leaving the project in a state of limbo.

The fallout from such governance agreements ultimately reinforces the urgent need for transparency and accountability at every level of local government.

As Makati stands at a crossroads between fiscal responsibility and political legacy, it is evident that the practices that have led to this situation must be examined and reformed.

The consequences of recklessness can extend far beyond immediate financial stability, impacting the long-term well-being of the constituents.

It is time to move past midnight deals and prioritize transparency to ensure that such heavy financial burdens do not fall unexpectedly on the shoulders of the next administration, or worse, the citizens of Makati City.

Interestingly, the former Makati administration was led by the incumbent mayor’s younger sister. So, why did you allow this to happen, sister dear?