TAGBILARAN CITY – It looks like that time is fast running out for the city government to avail of the loan/grant from World Bank to the tune of Php1 billion due to the perceived tug-of-war between the city councilors, on one hand, and two banks offering the same loan facility, on the other. The pressure is on both the executive and legislative of the city government led by City Mayor Baba Yap and Vice-Mayor Toto Veloso, respectively, to make decisive action so that it won’t be left out in the juicy offer of the bank.
The facility is 90% grant and 10% as loan, which if approved, the city is obliged to pay only the latter, city council said as confirmed by Vice-Mayor Veloso. But questions as to which banks offer best terms, including low interest rates are hounding the city officials who are still on heated debate on the merits of the plan for loan/grant.
Vice-Mayor Veloso was quoted by report that Development Bank of the Philippines (DBP) entices the city through a lower interest rate of a little over six percent than Land Bank of the Philippines’ (LBP) seven percent plus. But sources at city hall expressed fears that the application for the loan/grant could take a long time considering that minority bloc is trying to scrutinize it in accordance with the process while the majority rely on the numbers to make it approved the soonest.
The city SP is expected to tackle the matter during the joint session with Cogon baragay council today, city administrator Leonides “Edi” Borja said in phone interview last night.
Asked which bank the mayor prefers to avail of the loan/grant, Borja said it depends on the bank offer beneficial to the city.
Earlier, city SP appeared railroaded the approval of the said Resolution, authorizing Mayor Yap to negotiate with the Land Bank of the Philippines (LBP) for the said loan/grant at the instance of city Kag. Beniano Inting.
But the city SP changed heart and bowed to minority’s wish to invite bank officers during its session on Tuesday.
The WB-sponsored loan/grant is being offered only to local government units (LGUs) badly affected by the earthquake and super typhoon “Yolanda” in Oct. 15, 2013 and Nov. 8, 2013, respectively.
Earlier, Newly-installed city Kagawad Atty. Dodong Gonzaga has objected to the measure. Gonzaga wanted to invite bank executives to have a clear understanding of the loan/grant offer. But his request was turned down by the majority-administration councilors.
City Kag. Lucille Lagunay also agreed with Kag. Gonzaga. She believed that the approval of the Resolution authorizing city Mayor John Geesnell Yap II to negotiate with a bank loan-grant to the tune of PhP1-billion has kept the Sangguniang Panlungsod (SP) in the dark.
“The problem with the resolution adopted is that it authorizes the mayor to negotiate for the loan with DBP (Devt. Bank of the Philippines) and directly sign the loan leaving the SP in the dark what are the terms and conditions,” she said.
Kag. Lagunay interposed no objection to the plan borrowing. In fact, she said that “I consider a loan with 90% grant a blessing but I have issues of passing a resolution authorizing the city mayor to sign the loan without even informing the sanggunian what are the terms and conditions of payment, penalties in case of default and other stipulations that any prudent debtor should know.”
“I proposed with Councilor Gonzaga that we invite the DBP officials to explain what the terms are going to be before the resolution is passed. Land bank also has similar loan offer that should also be heard and considered instead of immediately closing a deal with (DBP). The (SP) should make an informed decision but this was not the case when the resolution was passed,” Kag. Lagunay said. (rvo)