P900-M San Pablo loan deal stopped

SAN PEDRO, Laguna—The regional trial court in San Pablo City, Laguna, has issued a 72-hour temporary restraining order (TRO) stopping the release of P900 million that the city government is borrowing from a private bank.

San Pablo RTC Judge Agripino Morga, in a hearing Thursday, granted the petition by a group of concerned citizens to put on hold the loan transaction.

The petitioners, composed of local Church and civil groups, have opposed the loan deal claiming it was approved by the city council without a feasibility study on the projects on which the money would be spent.

They also said the amount exceeded the city government’s borrowing capacity, citing a Department of Finance certification which said the city would only be capable of paying loans not exceeding P500 million.

Lawyer Restituto Mendoza, counsel of the petitioners, said in a phone interview on Friday that the court would decide at the next hearing set on Sept. 6 if it would lift the TRO or extend it for another 20 days.

The city government entered into the P900-million loan deal with the Philippine Veteran’s Bank in June.

According to the budget approved by the city council, the loan would be used for the following projects and obligations: P140 million to pay for a previous loan, P200 million each for a multipurpose convention center and a tourism and economic center, P180 million to upgrade a city college, P130 million for a food-and-transport terminal and P50 million to buy the site of the proposed convention center.

Mendoza claimed receiving threats that he said could be linked to the controversial loan transaction. “Everyone’s happy but me,” said Mendoza, referring to the threats.

He said he was on his way to the court hearing on Thursday when he found a message written in black on his car’s windshield which said: “Don’t block the way.”

Mendoza, a member of the city-based lawyers group San Pablo Bar, said he reported the threat to the city police.