IN negotiating for a P2.7 billion to fund the construction of the City Hall complex, City Hall’s budget chief said the city is ‘well within its debt service ceiling’ to contract the loan for the project.
During the ‘In Focus’ program series hosted by the City Information Office, City Budget Officer Roxanne Mae Ravidas said even with an existing P1 billion loan, the city is well within its debt service ceiling of P7 billion.
“(With the additional P2.7 billion) this brings our total to P3.7 billion…this is within the city’s capacity to pay,” Ravidas said.
In paying the loan, Ravidas said the city’s 20 percent development fund should be taken into consideration.
“The city’s 20 percent development fund for next year is P500 million…We have a two-year grace period (for the new loan) and even with our existing loan, our per annum (yearly payment) is below the P500 million 20 percent development fund,” she said.
The P2.7 billion loan being negotiated by City Hall with the Land Bank of the Philippines (LBP) is included in the P11.2 billion budget set aside for the city in 2024.
During the program, Ravidas confirmed that P1.530 billion will be used to acquire the 299,043 square meter property at Upper Dagong, Barangay Carmen where the future city government complex will be built.
The property is said to be owned by Susan Cid-Española, Joseph M. Cid, and Christine Cid-Tan. Ravidas also confirmed that P250 million will fund land development including the nearby Eco-Park in Upper Dagong, barangay Carmen while P920 million will fund the construction of the new City Hall building complex.
A local government’s 20 percent development fund is sourced from the 20 percent of its National Tax Allotment (NTA), formerly known as Internal Revenue Allotment.
For next year, Ravidas said the city’s NTA amounts to P2.5 billion or 22.33 percent of the city’s revenue sources. This is slightly above the P2.359 billion received by the city for 2023.
Ravidas said their office presented an amortization payment schedule for the P2.7 billion loan to the City Council before the recent executive budget hearing for the P11.2 billion budget for 2024.
“Every year our 20 percent development fund increases so it cannot be said that the city will go bankrupt (from paying the loans),” she said. (Stephen Capillas of City Information Office)
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