Dagupan wants P300 M Landbank load restructed
WITH its annual debt service reaching P60 million a year, Dagupan will seek to restructure its more than P300 million loan with the Land Bank of the Philippines this year.
Vice Mayor Belen Fernandez said a restructuring will enable the city to pay its obligations without compromising its services to the residents.
The planned restructuring if successful will only require the city to pay its principal loan over a period before finally paying the interests due.
Fernandez said the decision came following her talk with Mayor Alipio Fernandez Jr. before she left for the People’s Republic of China as member of the official Philippine delegation headed by Speaker Jose de Venecia Jr. that visited that country.
Under the approved
P247.5 million city budget for 2008, at least 14 percent or P60 million had been set aside for debt-servicing.
Councilor Michael Fernandez, vice chairman of the city council’s committee on finance, expressed confidence that if the city succeeds in restructuring its loan, its debt-servicing to Land Bank will be reduced to P22 million annually.
The bulk of the loan obtained by the past city administration was used to finance the construction of the three-story Malimgas Public Market three years ago and to buy a letter of credit for the purchase of a dredging machine from a foreign supplier.
The costs of the two projects reportedly far exceeded normal estimates.
Compounding the situation for the city is its inability to meet its revenue projections for the operation of the new market.
Today, the occupancy at the second floor of the market is only 50% while the third floor, designed for pay parking, never earned anything since the start of operations.
The benefit from the dredging machine was not even achieved as the city never allocated funds for its operation and maintenance.
The vice mayor said the restructuring is good for the city as the funds saved can be channeled to other meaningful projects.
She said that if the restructuring is achieved, as the city government may be in a better position to finally grant the pending request of stallholders of the Malimgas Market for a reduction in their rentals.—LM
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