Mandaue secures addt'l P500M loan for new gov't center

Mandaue City Treasurer, lawyer Regal Oliva
Mandaue City Treasurer, lawyer Regal OlivaFile Photo

THE Mandaue City government has successfully ratified its multi-billion loan agreement with the Development Bank of the Philippines (DBP) to finance the construction of its new government center.

City Treasurer, lawyer Regal Oliva, told reporters during a press conference at a hotel in Mandaue City on Tuesday, June 25, 2024, that the City instructed the DBP to prepare an additional P500 million, aside from the already approved P3 billion loan.

According to City Administrator Jamaal James Calipayan, this additional amount ensures the City has immediate access to additional funds if unexpected costs arise, “allowing for a quick response to opportunities and challenges” without undergoing a lengthy approval process for additional funds.

“Initially P3 billion ra gyud ang approved loan, pero ang City nag instruct sa DBP na e-standby ang P3.5 billion, which is ang P500 million just in case ra na kung naay additional fund sa project,” he said.

Calipayan said the City ratified the P3 billion loan agreement with DBP through an ordinance. The ratification, executed through an ordinance, marks the city’s formal approval of the loan agreement and its related documents.

Oliva said the City has a borrowing capacity of P5.6 billion, indicating robust financial health.

In an interview last May 29, Calipayan said the P3 billion loan approval came through in January or February of this year, with the official agreement signed in March.

Calipayan said the estimated cost for constructing the government center and associated infrastructure in Mandaue City is set at P3.512 billion. The project includes several key structures: the executive area, with a budget of P1.6 billion; the legislative area (P150.1 million); the public & common area (P870.6 million); and parking and land development, with a budget of P900 million.

Calipayan said the expenses for the new City Hall encompass various aspects, such as the overall size, complexity, choice of materials, implemented technologies, and certification standards.

The entire project will cover an estimated total gross floor area of 43,531 square meters. He said the project is set to transform the city’s administrative landscape, and underscores the city’s fiscal confidence and strategic vision for development.

Components

The government center project will include three main components: the “iconic” building, the main building, and a public transport terminal.

The P3 billion allocation will specifically fund the construction of the iconic building and its associated commercial spaces, a parking facility, public parks and playgrounds.

The iconic building will house both the executive and legislative offices.

Additionally, the former Cebu International Convention Center, now designated as the main building, will be renovated to host frontline offices and the public transportation terminal.

“Our new government center is more than just an administrative hub; it’s an income-generating venture with commercial spaces designed to stimulate local economic activity. We aim to revive the convention center to showcase Mandaue’s products and host exhibitions and a museum,” said Mayor Jonas Cortes.

Loan agreement

Oliva said the loan agreement, approved at an interest rate of only 3.5 percent per annum—one of the lowest rates available—will span 15 years, with interest accruing only upon the initial withdrawal for construction payments.

Oliva said this favorable financing is a testament to Mandaue City’s solid financial standing, as the city remains debt-free.

The project, set to include an 8 to 10-storey building, is already in the final stages of preparation.

The bidding process has been completed, and the project has been awarded to a contractor. It is now awaiting the notice to proceed. / CAV

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