CEBU, Philippines – A loan worth P7 million with the Development Bank of the Philippines has been released for the buyout and management of the existing water system in the northern town of Borbon.
Borbon is the first municipality which availed of the Capitol’s loans to local government units which need cash to implement development and income-generating projects, following the signing of the memorandum of agreement between the provincial government and the DBP.
Governor Gwendolyn Garcia said that the loan will be used to buy out the current water system in the town, as “water systems should be managed by LGUs because water accountability is on local officials,” she pointed out.
She also said that the towns and component cities in the Province of Cebu will now have access to loan facilities that will help realize development projects in their respective areas.
Considered as a landmark agreement and the first of its kind in the country, the partnership of DBP and Capitol now allows towns and cities access to loans to finance their infrastructure and other development projects and at an interest rate of nine percent per annum, way lower than what is currently offered by commercial banks.
Present during the turnover were Borbon Mayor Bernard Sepulveda and municipal council and DBP vice president Rosalier Dagondon.
Under the agreement, the Province will deposit with DBP its funds sourced from its Internal Revenue Allotment and other revenues which shall be utilized to finance the intended loans of towns and component cities.
The DBP will provide the mechanism in the evaluation, processing and grant of loans to government agencies and LGUS, this after the Province has screened and inspected the projects for financing based on its priority criteria and assessment.
“The project must be in line with the 12-point agenda of my administration and must ensure sales or return of investment,” Garcia said.
Loan applicants will use their share of the IRA as collateral and source of loan repayment, she added.
The governor entered into a memorandum of agreement with DBP officials to formalize their partnership in the lending program dubbed “One on One Loans”. — Garry B. Lao/MEEV (THE FREEMAN)