ILOILO City – The Sangguniang Panlungsod (SP) passed a resolution authorizing Mayor Jerry Treñas to, on behalf of the city government, enter into a contract of loan with the Development Bank of the Philippines (DBP) to finance various projects and programs.
The loan would be P1.750 billion.
Yesterday, the city council adopted the joint committee report of the committee on rules, ordinances, resolutions, style, justice and legal affairs and the committee on appropriation which recommended the passage of the resolution.
A committee hearing was conducted, according to Councilor Romel Duron, so they could determine where the city would use the loan and if it had the capacity to pay it.
City Treasurer Jinny Hermano and Budget Officer Viminale Capulso attended the committee hearing and affirmed that the city government could pay the loan.
Last week, Peñaredondo expressed disapproval, saying the loan was “too big and untimely.” But yesterday, he did not oppose the resolution.
“In my nine terms as councilor, this is the first time nga maka-utang ang syudad sang P1.7 billion. It is too big, but somehow ang iya period of payment malawig-lawig man and the only thing I asked is madala abi sang syudad ang iya mga amortization… pero ina indi man heavy gid, long- term man ang baydanay,” said Peñaredondo.
He agreed that the proposed projects for the said loan like the improvement of public markets are also revenue-making.
Treñas earlier said the loan of P1.750 billion will fund the repair of public markets in the districts of La Paz, Jaro, and Arevalo in the amount of P395 million.
Part of the loan will also fund the construction of the Iloilo City Hospital including the side development amounting to P500 million; acquisition of medical equipment, furniture and fixtures (P100 million); and construction of an eight-storey parking building adjacent to the city hall (P210 million).
As to the interest rate, the city has two options. One is fixed at four percent per annum until Dec. 31, 2022. Interest rate shall be subject to annual repricing based on the prevailing market rate. Gross receipts tax (GRT) for the account of DBP until Dec. 31, 2022, thereafter GRT for the account of the borrower.
The second option is fixed for five years based on the prevailing rate at the time of initial drawdown, presently at 3.75 per annum. Interest shall be payable quarterly and reviewed at the end of every five years. Interest rate shall be inclusive of GRT.
During the committee hearing, the city government’s existing loans were also brought up. A P89-million loan will mature in 2022 while a P711-million loan will mature in 2023./PN
