Divisoria vendors and stall owners said notebooks, pencils, spelling pads and other school supplies are pegged at 20 to 30 percent lower in Divisoria than those sold in big department stores and bookstores in Metro Manila.

Although heavy traffic and scarcity of parking space remain a problem, bargain-hoppers could afford to sacrifice a bit of discomfort to be able to save on their budget for school supplies.

For instance, notebooks are sold at a bargain – from R8.50 to R9, at least R3 cheaper than those sold in department stores. Likewise, pencils, writing pads, crayons and other supplies are cheaper by the same amount and sold for an even much lower price when bought in bulk.

A two or three-peso discount may not be much according to one mother, but when one buys 20 to 30 items all at once, one could appreciate the big difference, she said.

Aling Aruba, a mother of five schoolchildren, admitted: "Mainit dito, makapal ang usok ng mga dyip, pero mas mura, nakakatipid pag maramihan ang bibilhin."

Manila Mayor Lito Atienza said nothing could beat the bargain prices of goods being sold in the area. "Divisoria price cannot be beaten anywhere," Atienza said, explaining that as the center of trade in Manila, Divisoria is literally a mecca of goods sold at very affordable prices.

Atienza admitted that traffic continues to be a problem in Divisoria because the area is busy 24 hours a day. "It's always full of people. At night the sidewalks are filled with vendors peddling market products including fish and vegetables," he said.

One reason for the low price of goods in Divisoria is the fact that the law-mandated 12 percent value added tax (VAT) is not collected there, said a stall owner selling school products.

"Walang VAT dito kaya mura," said Miss Emmy, a former hat and belt vendor who now sells school supplies.

Sen. Ralph Recto, chairman of the Senate Ways and Means Committee and who was one of those who worked for the enactment of the VAT law, said the levy may not be collected from small-time stall owners or vendors because they are already VAT-exempt since their gross sale is too low to be levied with taxes.

"Chances are, retail outlets in Divisoria are VAT-exempt. If gross sales are below R1.5 million, the establishment is VAT-exempt," he said in an interview. "The sale of books and school supplies is VAT-exempt."

Whether prices of school goods are VAT-exempt or not, a shopper said it’s always better to get the best deal especially when the economy is not doing well.

"If it’s cheap, then it’s good for us," said Maria Corazon Cordova, a mother of three who bought shoes and other school needs for her children at the 168 Mall in Divisoria.

For his part, Sen. Mar Roxas said the Bureau of Internal Revenue (BIR) should at least take a look into the matter.

"Legitimate business should be nurtured (while) consumer welfare should be protected, (but as) for (collecting) taxes, it’s the Bureau of Internal Revenue’s ball game," Roxas, chair of the Senate Trade Committee, said in an interview.

Delfin So, the 168 Mall administrator, admitted during an interview that their prices are lower compared to others because most stall owners in the popular mall import their products from China where labor and cost of goods are very low. He also said selling by the bulk makes their price even more competitive.

Cordova agreed with this, saying she bought a pair of rubber shoes for her Grade Five son’s Physical Education class at 168 Mall because the price was R500 cheaper than a similar item sold in other malls. "The quality is also good, and I could still haggle for a lower price," she said in Tagalog before bursting into a hearty laugh.

So, on the other hand, stressed that since business is brisk in the area, 168 is in the process of expanding the mall further to include at least 30 to 40 more stalls. "Hopefully we could open by September," he said of 168’s expansion. He noted that this early, the stalls they will set up already have owners.

Not only are bargain-buyers enjoying business in Divisoria.

According to Emmy, a certain "Kargado" collects R5,000 "goodwill fee" from vendors and stall owners for them to be able to do business in Divisoria without hassle. She, however, refused to give details on "Kargado" except to say that the guy wears a police uniform.

"Next year I won’t sell these school supplies anymore because the goodwill collection is very stiff for me," she said.

Apparently, the "goodwill fee" is being collected from school supply sellers because school opening is on hand and business is expected to swell.

Atienza said his administration will not tolerate rogue policemen who collect "tong" in the area. But he admitted that the practice has been in existence since the early 60s.

"I urge all vendors to pay only the legitimate fees being collected by the City Hall. I urge them not to succumb to the pressure of paying these groups. I will help them because my administration cannot tolerate this," Atienza said during a phone interview. "These people should be exposed and put behind bars for their racketeering activities," he added.

But just as small vendors and the city government of Manila grapple with numerous problems in Divisoria— problems that range from inadequate parking space, chronic traffic and corrupt policemen—the people keep coming back in the area, all hoping to get the best value for their hard-earned money.

As one shopper pointed out: "It’s not a crime to buy cheap."