CEBU City Hall’s executive department wants to avail itself of a P120-million loan from the Land Bank of the Philippines (LBP) for the construction of the new Cebu City Medical Center (CCMC).

The amount is at least 10 percent of the total estimated cost of the project, which ranges from P1.2 billion to P1.5 billion.

According to a proposed resolution filed by Councilor Noel Wenceslao before the City Council yesterday, the loan will pave the way for the City Government to avail itself of a grant from the World Bank’s (WB) Support for Strategic Local Development and Investment Project (SSLDIP).

The grant will cover the remaining 90 percent of the project cost of the CCMC.

According to the WB’s website, the SSLDIP is a “lending operation” that is being implemented by the LBP and supported by the WB. It aims “to improve local public service provision and management by facilitating local government unit (LGU) access to viable financing to implement strategic infrastructure investment.”

It seeks to finance the reconstruction, rehabilitation, expansion and upgrading of basic local infrastructure in local government units (LGUs) affected by disasters such as super typhoon Yolanda and the 7.2-magnitude earthquake in October 2013.

Wenceslao asked the council to authorize Mayor Michael Rama to apply for and negotiate with the LBP for the P120-million loan and for the City to avail itself of the grant from the WB.

The proposed resolution also seeks to authorize the mayor to sign the loan agreement and all other documents pertaining to the transaction and assign 20 percent of the City’s Internal Revenue Allotment (IRA) this year as collateral for the loan.

When Wenceslao’s resolution came up for discussion by the legislative body, Councilor Margarita Osmeña, chairperson of the council’s committee on budget and finance, questioned it.

“Have we not appropriated P600 million for CCMC? Why do we have to borrow? What is this loan about? I have a lot of questions,” she said.


The City has set aside P300 million under its first supplemental budget last year for the CCMC and another P300 million in the P13.4 billion annual budget this year.

Osmeña also said she doesn’t understand why the IRA will be used as collateral, when it is one of the sure sources of funds for the City’s 2015 annual budget.

“This is puzzling me. It doesn’t make sense to me,” she added.

Osmeña further said that if the City needs P120 million, the P600 million is already enough for the CCMC. It is also in addition to the millions of pledges that the City raised both locally and internationally for the project.

Wenceslao then said the loan is only 10 percent of the project cost, and that 90 percent or P1.080 billion will already be shouldered by WB through a grant.

He said it was the LBP that offered the program to the City.

“Sayang man sad gud di i-avail (It would be a missed opportunity if the City doesn’t avail itself of the loan),” he added.


Councilor Sisinio Andales, however, expressed opposition to the availment of a loan from the LBP.

“I vehemently and vigorously oppose any loan from any bank. It seems the City is in dire need of money,” he said.

Sought for comment about the councilor’s pronouncements, Rama said he is not surprised because most of them have not been supporting his plans and programs.

“It (loan) is part of the avenue (for implementing the construction of the new CCMC).

If they are not for it, it means they are not Cebuanos. If they are not for it, they are not Filipinos and they have become what we call anti-patriotic, anti-nationalistic bordering on committing treason. Treason is disloyalty to your country,” he said.

Rama said all other LGUs in the country affected by disasters are availing themselves of the LB-WB program.

The mayor said he found out about the program after Cebu Vice Gov. Agnes Magpale told him about it.

Asked if the City needs to avail itself of the loan despite having a P600-million budget for the CCMC, Rama said it would be better for the City if there will be more funds for the hospital.

‘Why not?’

“Kung manobra maayo. Daghan ta makuha, daghan mabuhat. (If we end up having surplus funds, good. If we get a lot, we’ll be able to do a lot.) A loan is part of the strategy. But if you can avoid a loan, why not? But if you can pay the loan to expand then go for the loan. How come we have the SRP (South Road Properties) loan?” he said.

The City had availed itself of a loan from the Japan International Cooperation Agency in 1995 amounting to 12.315 billion yen or P4.65 billion at that time for the SRP. The loan is payable in 30 years, ending in 2025.

As for using part of the IRA as collateral for the proposed CCMC loan, Rama said it is only “part of the formality”.

Because of the concerns raised by some councilors over Wenceslao’s resolution yesterday, the council decided to defer its approval and conduct an executive session about the matter on March 25.

The council has invited members of the City’s local finance committee and representatives of LBP.