Capitol, DBP sign P1.5B loan deal

Cebu Governor Hilario Davide III has formally entered into a loan agreement with the Development Bank of the Philippines (DBP) for Capitol's plan to construct a high-rise modern building inside the capitol compound.

Officials of DBP and Davide signed the omnibus loan agreement yesterday at the Governor's Office.

Under the agreement, DBP will lend P1.525 billion to the Cebu provincial government payable in 10 years with a fixed interest rate of 2.9 percent.

“It shall be fixed at 2.9 percent per annum payable monthly in arrears to start at the end of the first month from the date of initial drawdown” reads the 19-page loan agreement.

The agreement was signed by Davide and Atty. Marissa Anino, head of Cebu Lending Center of DBP.

The amount that will be borrowed will be used to construct the 20-story building inside the capitol compound which will rise on the lot where the old Bureau of Agriculture Extension (BAEx) building stands.

Davide said they will also submit a supplemental budget before the provincial board and the P1.525 billion will be included.

"After that, what will follow for the terms of the loan agreement, an ordinance by the Provincial Board ratifying the loan agreement, and after that we will call for bids na for the construction of the building," Davide said.

Davide said DBP will be the one to pay the winning contractor for the construction of the building.

"Inig sugod sa contruction mag billing man na ang sa kun kinsay mo construct ini, ang banko nay mobayad ana. The money stays with the bank" Davide said.

Among the offices that will stay in the new building is the Provincial Disaster Risk Reduction and Management Office (PDRRMO).

Capitol hopes to finish the project within Davide's term as governor.