The local government was able to establish a reputation of not acquiring loans from international and local financial intermediaries despite its capacity to obtain such loans and pay the computed amortizations over the past several decades. In fact, there were numerous offers from the said intermediaries for previous administrations to secure multi-billion loans to fund the implementation of priority development projects but they did not succumb to the temptation because they do not want to compromise the future of the local government and those who will be leading the city.
There had been numerous bad experiences of local governments that obtained loans from government financial institutions in the past that caused the failure of those that succeeded the helm of the said local government because they are not able to fund the implementation of their suppo0sed high impact development projects considering that a big chunk of their 20 percent local development funds have been frozen to serve as collateral for the loan until it will be paid by the concerned locality. Some local governments are tempted to obtain loans because of the reported perks that go with it which is an alleged practice in the industry that could not be denied.
Actually, many local officials are now allergic when discussing the issue of acquiring loans because they fully understand the serious negative impact of the payment of the amortization to the financial performance and standing of a certain local government whether or not said local governments are able to pay the same. They actually have the delicadeza of not securing loans because they do not want to compromise the independence of future leaders in the formulation of their programs, projects and activities that will contribute in uplifting the living condition of their constituents irregardless of the temptations that are being offered to them by the institutions wanting their idle funds to revolve.
Unfortunately, there seems to be change of heart on the part of the present batch of Baguio City officials because they want to allegedly railroad the acquisition of a $60 million equivalent to around P3.3 billion to fund the rehabilitation of the Baguio Sewerage Treatment Plant and upgrade the city’s sewerage system. The said loan will be taken from the Asian Development Bank (ADB) through the State-owned Tourism and Infrastructure and Enterprise Zone Authority (TIEZA) because the city is not actually capable of securing the loan. Irregardless of what are the sugar-coated words of those in favor of the said questionable loan, it is primarily intended to compromise the future of the city because future leaders of the city will no longer have the leeway to decide on the implementation of their desired priority development projects because a huge portion of the local development fund will be withheld to pay for the said loan.
Worst, it will be the people who will suffer the consequences of the loan because a huge portion of our future water bills will contain the amortization that will cause the skyrocketing of our water bills while those who obtained the loan already carted away with their perks to the detriment of the welfare of the city’s populace.
It is ironic that the repayment of the said loan will be from 2031 to 2050 or way beyond the term of the city officials that closed the deal for the said ill-advised loan that is why people should always be vigilant on the current actions of our city officials. We do not want the future of our children to be compromised by our city officials who we entrusted with our votes but it seems that they no longer uphold our interest and instead their own personal and political interest.
There are numerous ways by which we could rehabilitate the Baguio Sewerage Treatment Plant and the city’s sewerage system but not through a multi-billion peso loan which will greatly affect the way our local government will be governed. Using the city’s development funds a primary collateral for the said loan will definitely prevent our future leaders from effectively and efficiently use the same for the overall growth and development of the city.
We should be brave enough in voicing out our vehement opposition to such a move that will no longer promote the general welfare but will make city residents indebted in the next twenty years or so. We cannot image how will be the future of the city with very minimal programs, projects and activities as it will surely be overtaken in terms of development by other developing localities nearby. We might have a well-oiled sewerage system but the delivery of basic services caused by the freezing of a portion of the local development funds will not be as effective as expected will result to chaos. Those who have facilitated the loan will surely be out there enjoying the perks that they were able to obtain while the city’s populace will be grouping in the dark on how to avail of quality services from the local government that will be heavily indebted to the national government and the international financial intermediaries.
