Cebu City mulls taking P5-B LBP loan offer
CEBU CITY, Philippines — Cebu City may take the P5 billion loan offer of the LandBank of the Philippines if the local finance committee finds no problems in doing so.
Mayor Edgardo Labella said that the LBP offered the loan to all local government units as part of the pandemic recovery program of the national government, and it is only right that Cebu City will be offered as well.
Labella, though, clarified that accepting the offer doesn’t mean the city is struggling with funds.
“Basta moingon og loan, magtuo dayon ang mga tawo nga bankrupt na ang Cebu City. Dili ta bankrupt. Many LGUs have taken up the loan already,” said the mayor.
(When loan is mentioned, some people believe that Cebu City has gone bankrupt. We haven’t gone bankrupt. Many LGUs have taken up the loan already.)
The mayor has ordered the local finance committee to look into the details of the loan to see if it is in the best interest of the city. The city council has also sought for the explanation of the LBP on the loan details before giving their approval.
“I would rather that the other stakeholders to take a very serious look on this. There are very encouraging terms and conditions that it’s very hard to also refuse. We will refer this to the City Council,” said Labella.
However, on a personal note, the mayor said he finds no reason for the city government not to take the loan since the interest rate, as computed, is only at 2 percent.
This interest rate is lower than the past loans the city has incurred, particularly, the P4 billion loan the city took in 1995 to build the South Road Properties (SRP).
The loan would also serve as an additional source of funds for projects geared towards economic recovery.
Councilor Raymond Alvin Garcia, the chairperson of the committee on budget and finance in the council, said that the P5 billion is in a form of a standby loan.
This means that the city government will only pay what it actually borrows out of the P5 billion.
If the city chooses to use only P1 billion of the loan, it will repay only that amount. The rest of the P4 billion can be used some other time.
The loan could be used for pandemic recovery, flood control, housing, education, social services, health, and food security.
The council is set to tackle the loan next month.
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