PRESIDENT Benigno Aquino III has refused to guarantee a P3-billion concessional loan offered by the World Bank to Tacloban City to rehabilitate and reconstruct the city after Super Typhoon “Yolanda.”
World Bank and government documents show the package was 90-percent grant and 10-percent loan for the rehabilitation of Tacloban City, meaning the government would pay only less than P300 million of the total funding of P3 billion.
Aquino’s refusal to give a sovereign guarantee that only he can grant prompted the World Bank to withdraw the offer, according to Mayor Alfred Romualdez.
The fund would have paid for the rehabilitation and construction of hospitals, public markets, a multi-purpose evacuation center, the city hall and shore protection, dike construction and rehabilitation of drainage systems, among others, Romualdez told The Standard.
The loan was offered by the World Bank in early 2014, the mayor said.
On July 24, 2014, World Bank senior urban specialist Christopher Pablo wrote to Romualdez updating the mayor on the status of the loan.
“We have informed LBP [LandBank of the Philippines] of your interest and their Lending Center will be in touch with your office shortly and advise you on the documentary requirements of SSLDIP [Support for Strategic Local Development and Investment Project],” Pablo told Romualdez.
“We understand that LBP is meeting with the Department of Finance [DoF] and the Department of Budget and Management [DBM] weekly to finalize the financing arrangement and that once finalized, SSLDIP can start providing the funding to LGU sub-projects, hopefully in August 2014,” Pablo added.
Pablo also said the LBP was formalizing with the Department of Public Works and Highways the technical assistance that can be provided to the LGUs in the preparation of detailed designs, in procurement and construction supervision support.
“As soon as this formal agreement between the DPWH and LBP is reached, Tacloban may coordinate with LBP on specific engineering support that could be sought from DPWH,” Pablo said.
Romualdez immediately formed the World Bank Task Force composed of select employees of the city government who would spearhead all activities related to the World Bank loan such as securing the necessary requirements, coordinating with World Bank and other banking institutions.
All the required documents were submitted to the LBP, the World Bank and the Office of the Presidential Action on Recovery and Rehabilitation headed then by former Senator Panfilo Lacson Jr.
On January 7 to 8, 2015, the World Bank team from Manila, headed by Pablo, paid a courtesy call on Romualdez and conducted site inspections at some of the identified project locations within the city, according to Irene Chiu, World Bank Task Force chairman.
On October 29, 2015, after more than a year of a series of meetings, submission of documents and waiting for the palace’s approval, Romualdez said the LBP-World Bank had to cancel the program due to time constraints.
On August 25, 2015, World Bank’s Pablo told Romualdez the national government has failed to comply with the requirements.
“I regret to inform you that the Memorandum of Agreement among the national government agencies and the development banks providing for the grant funding equivalent to 90 percent of sub-project cost is still not signed and therefore the financing cannot proceed. Please note that the LBP project will be closing in April 2016. You may therefore wish to consider exploring other financing sources for your urgent projects,” Pablo said.
A separate letter of regret came from LBP’s Martin affirming the World Bank’s cancellation of the funding.
“A careful evaluation of the project’s timelines vis-à-vis the closure date of April 30, 2016 indicates that the implementation of the various sub-projects will not be completed on or before the program’s closing date,” Martin told Romualdez, in a letter dated Oct. 29, 2015.
“Moreover, the documentation of the 90 percent grant component from the national government has not yet been completed,” Martin said.
The documentation, aside from national government agencies’ MOA, included President Aquino’s granting of sovereign guarantee.
“In view of the constraints, the Landbank, together with the World Bank, decided to cancel the program. We therefore convey our deep regret that your project proposal can no longer be financed,” Martin said.
