A MAJORITY of the Cebu City council has given authority to Mayor Tomas R. Osmeña to negotiate for a P3-billion loan from the Land Bank of the Philippines (Landbank) to fund infrastructure projects.
The resolution seeking authority was authored by the mayor’s wife, Councilor Margarita V. Osmeña.
Under the resolution, the city may use the P3 billion “to finance the construction of drainage, road concreting, and other infrastructure projects.”
Based on a Landbank letter offering the fund to the city, signed by Assistant Vice-President Allan R. Bisnar, the loan will have a 3.75% annual interest rate and payable within a maximum of 15 years.
Several councilors opposed the resolution, citing that the city does not need the loan as there are other sources of funds.
Councilor Joel C. Garganera said the council has already passed an ordinance allowing the sale of three hectares of land at the South Road Properties (SRP), which can generate P3 billion.
“The mayor promised to sell it for P100,000 per square meter. If the mayor can sell that, it brings P3 billion so why should we pursue the loan? It’s been six months already and then we haven’t heard yet of the SRP lot sale,” Mr. Garganera said.
Ms. Osmeña defended that the city is still working on the sale of the lots.
Councilor Raymond Alvin N. Garcia, meanwhile, pointed out that incurring an interest for the loan would just be an additional burden to the city.
Mr. Garcia also said the city still has other available funds such as the P9-billion proceeds from the sale of 45.2 hectares of lots at the SRP in 2015.
“We can use to fund all of these projects that the mayor intends to implement. We do have money. We are so proud because Cebu City is the fourth richest city in the entire Philippines next to all Manila cities and here we are borrowing money when in fact we have assets and cash in the banks which is more than P3 billion,” he said.
Councilor Jose C. Daluz III, for his part, questioned the specific projects that will be funded from the loan.
“What are the specific infrastructure projects are we going to fund? Maybe we have to establish first the specific projects. Borrowing is the last resort. Maybe we can find some funding in the general fund,” he said.
Ms. Osmeña appeased the oppositors, saying, “Whatever the result of the negotiation, it has to come back to the city council… There is no application fee, there is no commitment fee, there’s no appraisal fee. It’s just that the offer was made by the Landbank, which we are looking into because they offered it but it has no commitment on any part.” — The Freeman