DOF offers P200M loan for Carbon Market rehab

CEBU, Philippines - The Municipal Development Fund Office of the Department of Finance (MDFO-DOF) offered the Cebu City Government a P200-million loan for the rehabilitation of the Carbon Market.

This is after the Office of the President referred the matter to the DOF which could help in financing the project through its credit facilities because the President’s office could not commit such amount for financial assistance.

The President’s Social Fund (PSF) has already been allocated for priority projects. PSF is known as the President’s pork barrel. It is sourced from the earnings of the Philippine Amusement and Gaming Corporation.

The city requested for a P195.340-million financial assistance for the rehabilitation of the Carbon Market which the mayor wants to develop as a tourist destination.

The rehabilitation was allocated P70 million under the city’s budget but the project would need P265-million, the reason they asked the help of the president.

But since the president’s office could not fund the project, the city government’s request was referred to the DOF for possible assistance from its credit facilities.

The MDFO-DOF in turn, in a letter dated August 2, informed the mayor that the city may access the Municipal Development Fund Project, MDFO’s financing facility for income generating projects.

“This facility offers concessional financing support at the interest rate of 8 percent (fixed) payable within a maximum of 15 years,” said Norberto G. Malvar, MDFO’s Deputy Executive Director.

The documents required for submission to apply for the loan include a Letter of Intent signed by the mayor, a council resolution manifesting support for the project and authorizing the mayor to enter into agreements, a project concept or feasibility study and a Certificate of Borrowing Capacity from the Bureau of Local Government and Finance.

In a follow-up interview, Lawyer Dominic Diño, Assistant City Administrator for Economic Enterprise, said that Carbon Market is an income generating facility of the government with an estimated income of P1.7 million a month.

If the city would avail of the loan being offered by the finance department, the city is estimated to pay only about P16 million fixed interest. In a 15-year period, the city will be paying a little over P19 million per annum. The payment starts during the fourth year.

Mayor Michael Rama said that he will have the offer studied before they decide to avail of it. He said he is not keen on getting loans

“Loan man gud, maayo unta to kung financial assistance ra gyud ilang ihatag,” Rama said.

The city government intends to allocate another P100 million this year for the project which, if ever, will give them a P170-million ready budget.

Rama earlier said that the reconstruction of the Carbon Market which will already include the Units 1, 2 and 3 is one of his priority projects to accommodate the vendors who were displaced when the market was destroyed by a fire.  (FREEMAN)