Majority bloc defends P1.7B City Hall loan

BACOLOD City – Administration councilors here contended that procedure was followed in the approval of the P1.7-billion loan of the city government from the Development Bank of the Philippines (DBP) to fund key projects in the city.

Councilors  Caesar Distrito, Em Ang, Cindy Rojas, Renecito Novero, Anna Marie Palermo, Elmer Sy, Dindo Ramos, Ayesha Villaflor and Lady Gles Gonzales issued the clarification in an email to media outlets.

They said the local government code only requires majority vote of the City Council in order to approve the loan, not a unanimous vote.

Since the council has 14 members, the majority vote is 8.

Also, the code does not require a public hearing on the request of Mayor Evelio Leonardia to authorize him to sign the loan agreement with DBP.

“But out of prudence and fairness, we deferred it for a week, scheduled a public hearing, and invited department heads, barangay officials and DBP officials just to ensure that all the processes and requirements were strictly complied with,” the councilors said.

The statement added that “the Local Housing Board, the Bacolod City College Board, the City Development Council (CDC), and the technical experts of the City Engineers Office had painstakingly studied the feasibility of those projects and their necessity since 2017.”

“In fact, as early as 2018, the CDC had already approved these projects that were also subsequently ratified by the Sangguniang Panlungsod which the minority even affirmed in favor and did not make any objections or comments. To make it clear, there is no law which provides that the public hearing and the approval of the committee report should be done in separate days. Essentially, the Internal Rules of the Sangguniang Panlungsod is silent on that,” the statement further said.

To set aside doubts that the deal is being railroaded, the councilors also reminded that they have been debating on the plan to borrow money for key projects since middle of 2018.

All of us members of the Sanggunian had debated since mid-2018 to grant the mayor the authority to negotiate with the DOF and any other government financing or banking institutions, and all those projects had already been identified at that time that the matter was lodged before us. The loan was also subjected to lengthy debates, and we had already approved more than 7 resolutions relative to the 4 flagship programs of the Leonardia Administration. In short, it was not made in haste, this was thoroughly discussed and debated upon, and all the requirements required by law had been complied with.”

Earlier, Bacolod Councilors Wilson Gamboa Jr. and Claudio Puentevella appealed to the DBP board to exercise utmost diligence, prudence and good faith in entering into a contract with the City of Bacolod and to reconsider the grant of the P1.7-billion loan.

In their Dec. 12, 2018 letter to DBP president Alberto Romulo and Bernardo Castillon Jr., head of DBP Negros Occidental Lending Center, Gamboa and Puentevella said they are very concerned about the huge loan to be granted to the city and want to know if the city has complied with all the required documents and processes as stated under Bureau of Local Government Finance Memorandum Circular No. 005-2018 dated Jan. 22, 2018.

Puentevella claimed that they do not oppose the loan and that he might even support it provided it is completed after the May 2019 elections.

Gamboa said there is non-compliance with the certificate net debt service ceiling and borrowing required by the Department of Finance and no City Development Council approval was presented to the Sangguniang Panlungsod.

He also pointed out that the public hearing on the term loan agreement and continuing deed of assignment was conducted on Nov. 26, 2018. The committee report was submitted and adopted by the SP also on the same day, as well as the approval of the authority to sign.

Gamboa said he finds the contract very onerous and disadvantageous because the interest is based on the prevailing price. The city also wants the loan as soon as possible because they do not want it to be covered by the election ban.

The two opposition councilors said the unprecedented haste that these public processes have been done is alarming especially that the public was not given ample time to understand and consider these projects.

They also said the projects, especially the construction of the coliseum, is not a priority concern of the people and that there is no feasibility study and plan from the CDC that it will be self-sustaining.

Hence, the decision for the construction of the construction of the City Coliseum is an unwise endeavor, they said.

Gamboa said he is considering raising the matter to the Office of the President.