SP to ratify P39M Loan Agreement with DBP today
BACOLOD CITY -- The Sangguniang Panglungsod will hold a special session today to ratify the P39 million Loan Agreement with the Development Bank of the Philippines (DBP).
Bacolod City Vice Mayor Jude Thaddeus Sayson said the loan was decided by the Office of the City Mayor after a thorough study on what to do with the release of the unpaid Internal Revenue Allotment share from the Department of Budget and Management (DBM).
Other cities and municipalities in the province with the same situation with Bacolod, opted to monetize their share minus almost 30% as part of the scheme introduced by the agency.
But Bacolod City, according to Sayson, wanted the full amount of P39 million that is why they decided to have a loan with DBP seeing its advantages compared to monetization.
One week after the ratification, the money will be deposited to the city’s bank account. With the City Treasurer’s certification of the availability of funds plus the appropriation ordinance, the loaned amount could already be used by the city government.
Sayson said based on previous talks with Mayor Evelio Leonardia, the money would be used for the proposed sanitary landfill and purchase of heavy equipment for the City Engineer's Office.
The Monetization of IRA Collectibles for Local Empowerment (MIRACLE) Program would release the unpaid IRA through either the Development Bank of the Philippines (DBP) or the Land Bank of the Philippines (LBP), but the government banks would withhold 29 percent of the collectibles as servicing fee under a loan grant for seven years starting May 2009, with the IRA as collateral.
The Miracle Program is the vehicle for the Department of Budget and Management (DBM) to pay local governments their IRA share for 2001 and 2004 under a staggered basis through a government bank.
As per record from the League of Provinces of the Philippines (LPP), the total IRA for 2001 and 2004 which were not remitted to Local Government Units (LGU), amounted to P12.4 billion.
It may be recalled that in 2001, the IRA of LGUs was reduced by P10 billion owing to the failure of Congress to pass the GAA for that year. In 2004, another P2.4 billion was cut from the LGU IRA due to the same circumstances.