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Cebu News

City dad eyes loan to rebuild CCMC

Jean Marvette A. Demecillo - The Freeman

CEBU, Philippines - A Cebu City councilor has proposed that the city government should avail of a grant from the World Bank for the reconstruction of the Cebu City Medical Center by obtaining a loan from Land Bank of the Philippines.

Councilor Noel Wenceslao said the city government can save millions of pesos if it avails of the “Support for Strategic Local Development and Investment Project” offered by World Bank to Local Government Units in the Visayas affected by calamities.

As a requisite, however, the city government needs to loan 10-percent of the total project cost or P120 million from World Bank’s conduit bank before it can avail of the grant. The CCMC reconstruction project costs P1.2 billion.

  Wenceslao tried to pass a resolution authorizing Mayor Michael Rama to negotiate for a P120-million loan with LBP. He proposed that 20-percent of the city’s Internal Revenue Allotment would be used as collateral for the loan.

However, the proposal was opposed by Councilor Margarita Osmeña.

Osmeña said there is no need to borrow money from the bank since the City Council has already appropriated P600 million for the construction of the hospital and that the city government has received pledges and donations for the said purpose.

In fact, the city government has already collected P16 million from the “Piso Mo, Hospikal Ko” fund drive. The amount does not include pledges from various organizations.

“Ten percent is one hundred twenty million pesos, and we have that already. So why borrow? It does not make sense to me, I don’t know if it makes sense to anybody else, but it does not make sense to me. And to use the IRA as collateral when it is one of the main and sure sources of funding for our 2015 budget,” she said.

CCMC was demolished in February last year after it was declared unsafe for occupancy after the magnitude 7.2 earthquake hit the Visayas regions in 2013. 

“The cost of the project is P1.2 billion. Out of P1.2 billion, what is offered by Land Bank is we are going to pay only 10 percent and 90 percent is grant,” Wenceslao said.

City Councilor Sisinio Andales, another member of the Bando Osmeña Pundok Kauswagan, said that he would “vehemently oppose any loan from any bank.”

“As far as I am concerned, I would vehemently oppose any loan from any bank because it would mean that the city government is in dire need of money. We have already allocated P600 million for the construction of CCMC,” Andales said.

Wenceslao clarified that the city government is not after of the loan but of the 90-percent grant.

“That is an offer. Maong kinahanglan ta sa City Council for an authority for the Mayor to negotiate. Let us not look at the loan, we have to look at the 90-percent grant,” Wenceslao added.

Osmeña said that if the city government would avail of the loan, the amount should not be spent for the hospital but for other projects because the CCMC has already been funded.

“But, why? When we don’t need it. Maybe we can use it not for CCMC, but for something else. If it is disaster related. There were other things like schools, we can rebuild better schools but not the hospital because (it) seems at this point (it) is already funded,” she said.

Osmeña said there are other things to consider such as damaged schools, housing development site for the urban poor, among others.

When sought for comment, Rama said that loan is part of business strategy.

“But, if you can avoid loans, why not? But if you can pay the loans to expand then go for the loan. How come we had SRP loan?” Rama said. —/FPL (FREEMAN)

A CEBU CITY

BANK

CITY

CITY COUNCIL

GOVERNMENT

LOAN

OSME

WENCESLAO

WORLD BANK

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