Davide gets green light to negotiate P1.5B loan

The Cebu Provincial Board (PB) has approved a resolution authorizing Governor Hilario Davide III to negotiate with the Development Bank of the Philippines for a loan amounting to P1.525 billion.

If granted, the loan will be used to fund the construction of a 20-storey “modern” building within the Capitol compound. The building will house government offices while its other portions will be leased out to commercial establishments.

During the session yesterday, PB Member Raul Bacaltos (1st district) asked whether the Capitol, instead of seeking a loan, had considered using money from its coffers to fund the project. The provincial government, he said, has P2 billion.

However, Manny Guial of the Provincial Treasurer’s Office explained that the money has been allocated for other purposes.

During the session, ABC president and ex-officio member Celestino Martinez III also raised why the board had to come up with a resolution authorizing the governor, recalling that a previous loan of the provincial government used to acquire heavy equipment was supported by an ordinance, not a mere resolution.

In response, PB Member Horacio Franco (4th district), who sponsored the resolution, said the resolution only authorizes the governor, on behalf of the Capitol, to negotiate with DBP about the terms of the loan agreement.

Once the governor and the bank reach a deal, the agreement will then be ratified by the board through an ordinance.

Franco added that once the deal is ratified, the governor can then sign the contract applying for a loan from DBP.

In a separate interview, Davide expressed optimism that the loan will be approved by the bank because the amount intended to be borrowed is lower than the provincial government’s loan ceiling of P5.5 billion.

DBP reportedly plans to offer the loan to the Capitol at a 2.9 percent interest rate.

Bacaltos remarked that the proposed interest rate “is already good.”

Meanwhile, because the Capitol is considered a heritage site by the National Historical Commission, Davide said the provincial government will first seek the opinion of the commission before going on with its plan to put up the modern building.

He said he does not want the proposed building to suffer the same fate as the Torre de Manila, whose construction was ordered suspended because it “photobombs” pictures of the Rizal Park.

Davide said they also need to consult with the Bureau of Local Government Finance (BLGF) about the move.

The governor hopes to break ground for the new building before the year ends.