City Hall fails to pay P30M loan guarantee

CEBU, Philippines - The Cebu City government failed to pay its bi-annual guarantee fee to the Department of Finance (DOF) amounting to close to P30 million.

Mayor Michael Rama said the city’s obligation to the DOF is not among the priorities of his administration. The guarantee fee was for the city government’s 12.315-million-yen loan from Japan which was used to reclaim the 295-hectare South Road Properties.

Rama said the city government should not be charged with one percent guarantee fee out of the remaining balance of its loan from Japan Bank for International Cooperation (JBIC) because the DOF represents the national government that is mandated to help the local government units.

South district Rep. Tomas R. Osmena also complained about it during his term as mayor. The city asked the DOF to waive the guarantee fee.

The guarantee fee diminishes every year based on the remaining loan balance.

The DOF cannot waive the city’s obligation for the payment of the guarantee fee because this is a standard requirement when local government units take out a loan from foreign funding agencies.

The record shows the city had already paid to DOF close to half billion pesos for the guarantee fee since 1996.

City Treasurer Emma Villarete denied speculations that the city failed to pay the guarantee fee because it runs out of funds.

“Dili man, ato man gud gi-una pagbayad ang mga suppliers ug contractors kay kasabot man ta nila nga naa sad sila’y apason nga bayranan especially nga December karon,” Villarete explained.

She said the City Treasurer’s Office has requested Land Bank of the Philippines (LBP) to postpone its payment for DOF this month.

“Daghan man gud ang atong withdrawals sa December for the bonus, allowances and financial assistance to the City Hall employees and various sectors of the community,” Villarete said. —/FPL (FREEMAN)