City to save P105 M from LBP loan
The city government will incur a savings of roughly P105 million in its P350 million loan for the construction of a seven-storey city hall building after the Land Bank of the Philippines (LBP) agreed to lower its interest rates.
Sources at the city hall said Mayor Jerry Treñas was able to convince top officials of the bank to lower the interest rate originally placed at 9.5 percent.
The projected savings will be higher than P105 million if the city government can pay the loan in shorter period of time. The computation for the P105 million savings is based on the 15-year payment period.
Sources, however asked not to cite the exact lowered interest rate as it might impede the forthcoming signing of the final agreement between the city government and the LBP. The final signing of the loan agreement is set Friday at the Sarabia Manor Hotel and Convention Center.
Same sources said specific information about the city's loan is kept under wraps because another bank in the city is also bent on offering the city the loan for the construction of the Iloilo City Hall.
The bank's offer was made even after the Sangguniang Panlungsod gave the mayor an authority through a resolution to negotiate with the LBP to make a loan of P350 million.
In earlier interview, Majority Floor Leader Eduardo Peñaredondo said the city government has a credit line of P2.5 billion in the LBP. The credit line of the city government is based on the city's 20 percent Internal Revenue Allotment (IRA).