Council OKs San Pablo’s 2nd loan bid
The city council of San Pablo has approved a resolution authorizing Mayor Vicente Amante to negotiate a P740-million loan with the Land Bank of the Philippines to fund a number of city projects.
This was the city government’s second loan bid after the Court of Appeals, in December last year, issued a one-year injunction against San Pablo’s initial bid to borrow P900 million from the Philippine Veteran’s Bank.
The P740-million loan will be used for the same government projects proposed under the shelved P900-million loan, which includes the construction of a multipurpose convention center, a tourism center, a food and transport terminal and for the conversion of a city college into a university.
Civil society groups in the city have opposed the projects, which they said did not undergo feasibility studies and questioned the city’s capacity to pay the loan.
Last year, the Bureau of Local Government Finance, under the Department of Finance, also issued a certification saying the city government is capable of borrowing and paying only up to P500 million.
Councilor Angelo Adriano, the sole opponent of the loan bid during the council’s session on Tuesday when the resolution was approved, questioned the city government’s “timing” in entering into a loan transaction, as it was just months before the start of an election ban on government projects.
“I am not against the projects but the timing of negotiating a loan,” Adriano said in a phone interview on Thursday.
He said in 2007, also an election year, the city government borrowed P145 million it used to construct a hospital.
Adriano also questioned how the city government has been using its funds, pointing out that San Pablo incurred a P200-million deficit in its 2010 budget “because funds were not properly managed.”
Councilor Edgardo Adajar, the chair of the city council’s committee on budget and author of the resolution for both loan bids, said several loan-funded projects in the past have benefited San Pablo residents.
“The city has kept a good credit standing, otherwise the banks would not offer to lend us money,” Adajar said.
Adajar dismissed Adriano’s criticisms as “politicking,” but declined to elaborate.
