Capitol’s P1.3B debt and the voters’ perception

By: Atty. Ruphil F. Bañoc May 31,2019 - 06:51 AM


I have a good friend who came from zero and who is now a successful businessman. 

He said that it is given that in every business there is a corresponding risk. You can be successful and unsuccessful. He said risk should be calculated. He is not the aggressive type, but the conservative one. One important advice that he gave me is “never incur debts as your capital when you start your business.” 

He explained to me and cited realistic examples. He said that if your capital is from a debt, good if you become successful, but if you fail you will have a hard time to recover, at the very least. 

However, he said if you already have started your business no matter how small, and you know you are already successful then that’s the time that you have to borrow money for purposes of expansion. You just calculate the percentage obligation of your loan and the gains that you can reap out of your business. 

In fact, even if you have extra money, you still need to make loans so that you will remain liquid and you can use your money for emergency purposes or you can roll it out for more profitable endeavors. 

This idea confirms my learning as I read the book, Rich Dad and Poor Dad, written by Robert Kiyosaki. He encourages borrowing money in banks and using it in business. What is important is you must have financial management literacy.

This opens my mind as to the reasons businessmen are not afraid of borrowing money. They know when and where to borrow money so that the interest is not big and the gains are more than enough to pay their obligations. 

On the part of the poor, our perception when we borrow money is that we do it because we don’t have money at all. We do it to answer for our daily basic needs such as food, clothing and shelter. 

What is worst is we fall into the trap of borrowing money from loan sharks with very high interest because they are the ones who can lend us money without requiring us to submit voluminous requirements. 

Hence, the issue on Governor Hilario Davide’s administration of borrowing money from the bank to finance the so called “Torre de Davide” is something abstract and negative to the Cebuano voters, most of whom are poor.  They cannot understand why the capitol is proudly saying that the province is rich, yet it borrows money from the bank and let the Cebuanos pay for it.

In fact, even businessmen and those who are experts on financial management are in quandary on why the need to borrow money for such kind of project. 

Following the formula of my good friend businessman as narrated above, it is very risky for capitol to barrow money for “business” when they are not known experts on it. Secondly, the money is not used for business expansion yet. 

This issue contributed a lot to the Cebuanos’ disapproval as manifested during the recent election. Hence, Vice Governor Agnes Magpale, Davide’s running mate, suffered a lot as voters perceived them to be the architects of the billions of pesos of loans. Good for Davide as he had a weak opponent for vice governor in Daphne Salimbangon. 

True enough, Governor-elect Gwen Garcia capitalized on that issue in her campaign sorties. Based on my own research, people are not in favor of the said loan. That is on top of some suspicions that there is corruption involved in the project, hence they are in a hurry in implementing the same.

In my interview with Governor-elect Gwen Garcia, she issued a strongly-worded statement on her decision not to continue the said project. We will watch what will happen next. 

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TAGS: CDN Digital opinion, columnist Ruphil Bañoc

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