City Council ratifies P1.7-B loan agreement with DBP

THE Bacolod City Council ratified the term loan agreement and continuing deed of assignment with a hold-out agreement between the City Government and Development Bank of the Philippines (DBP) involving the P1.7-billion loan to fund the city’s flagship projects.

It was ratified during the regular session yesterday. Those who voted in favor of the agreement were Councilors Caesar Distrito, Em Ang, Cindy Rojas, Dindo Ramos, Bartolome Orola, Ana Marie Palermo, Renecito Novero, Elmer Sy, Sonya Verdeflor, Ayesha Villaflor and Lady Gles Gonzales.

Councilors Wilson Gamboa Jr. and Claudio Puentevella opposed the move while Councilor Ricardo Tan abstained.

Since it’s already ratified, they will pass an appropriation ordinance for the P1.7 billion loan so they can start the bidding process, Distrito said.

In May, the City Council authorized Mayor Evelio Leonardia to explore and negotiate with the National Government to provide loan for the six flagships projects of the city.

They authorized the mayor to negotiate with the Department of Finance (Dof)–medium-term Development Fund (MDF) Financial Assistance or any government banking or financial institution to fund the city’s projects.

These projects are Progreso Village Relocation Site with the budget of P350 million; Bacolod City College Site Development and Facilities, P350 million; Bacolod Masskara Coliseum, P800 million; and the construction of roads and bridges, P200 million.

Gamboa said he manifested his objection because it was only on November 21 during their regular session that the City Council received a “pro-format contract” with the DBP with no available information such as interest, terms of payment, the manner of payment, penalties among others.

“This pro-format contract was so damming that it was already pre-signed by the representative of DBP which I find very abnormal/extraordinary because this is not in the usual course of transacting business with a bank which is a presigned pro-format contract,” he said.

Gamboa noted that the terms and condition of the loan are highly disadvantageous and onerous as far as the city is concerned, specifically with regards to interest at a prevailing rate, service charges, provision for hold-out deposits among others.

“For me, I find the purpose of the loan unwise and unsound because of the people of Bacolod clamor for a Bacolod City Public Hospital or the rehabilitation of three major markets and the construction and rehabilitation of other sub-satellite markets,” Gamboa said.

For his part, Leonardia said he is thankful to the members of the City Council who voted in favor for the ratification of the contract.

“These projects are meant really to improve our day-today life in Bacolod. These are projects that will have a longterm effect on the City of Bacolod. Without the support of the vice mayor and the members of the City Council, these could not be realized,” he said.

The mayor also justified the constructions the said projects, adding that the Bacolod Masskara Coliseum is expected to be an income-generating project as there will be commercial establishments to be constructed within the coliseum.

“The commercial spaces will also boost the business potential of the area,” he said.*