Capitol, DBP seal P1.5B deal

Cebu Governor Hilario Davide III assured the taxpayers of the province that they will not be burdened by the loan deal entered into by the Capitol and the Development Bank of the Philippines (DBP).

DBP Chairman Alberto Romulo met Davide at the governor's office yesterday to formally seal the P1.5-billion loan agreement between the bank and the Capitol.

The loan will be used by the province in establishing a 20-story high-rise building inside the Capitol compound.

During yesterday's signing ceremony, Romulo said he was impressed of what would the 20-story edifice would look like after its projected two-year completion.

The AS Enriquez Engineering Consultancy, the firm that studied the construction of the edifice, presented before the high ranking officials of DBP and officials of the Capitol of what would be the look of the building yesterday.

The modern building will soon rise at the area where the old and dilapidated Bureau of Agriculture Extension (BAEx) building is standing.

The Capitol is set to pay DBP for 10 years with 2.9 percent fixed interest rate for the proejct.

Davide assured that tax payers won't be affected by the loan deal, considering that they have enough fund to pay the bank, especially with the yearly Internal Revenue Allotment (IRA) the Cebu Province will receive from the national government.

Base on the record of the Provincial Budget Officer the Capitol is set to receive its P3.3 billion Internal Revenue Allotment (IRA) for 2018. There's an increase of 7 percent or P207 million from the previous year.

With the 2.9 percent fixed interest rate, the Capitol is expected to pay the DBP an estimated P235 million interest for 10 years, or P23 million per year.

The interest will be paid for three years before the Capitol will start paying for the principal amount.