SAN JOSE CITY, Nueva Ecija—Until year 2025, the San Jose city government will be swimming in debt following P403 million in total loans made under the previous administration.
Mayor Mario Salvador told a press briefing that the biggest challenge facing his administration is paying these outstanding loans spread over the next nine years, or well after his term ends in 2019.
“This is one of the biggest hurdles my administration is facing, and we have to live with it,” Salvador said, adding that San Jose’s development funds for 2016 had already been obligated when he assumed office in July.
The loans were incurred by Salvador’s predecessor, former three-term mayor Marivic Belena, whose husband, former three-term mayor Alexander Belena, lost to Salvador in last May’s elections.
Documents furnished by Salvador to newsmen showed that the city government contracted loans on eight occasions starting in October 2009 up to last year. The long-term loan packages were payable in seven and 10 years.
The biggest loan was the P82 million the city government obtained in March 2015 from the Nueva Ecija Lending Center-Cabanatuan branch of the Land Bank of the Philippines, which is set to be paid in full by March 2025.
In November 2012, the Belena administration also contracted a P69.6-million loan for the city government center building, to be paid up in November 2022.
Other loans included P16.1 million for San Jose’s computerization project, P139 million (in two tranches) to buy heavy equipment, P62 million for school buildings, P38 million for the public market parking area and P3 million for the vegetable section of the public market.
Of the eight loans, only the computerization project has been fully paid, with the city having an outstanding balance of P289 million, Salvador said.
The city government still owes creditors, including interests P70 million for the heavy equipment, P53.5 million for the city government center building, P89.6 million for the FMRs, P64 million for the school buildings, P41.5 million for the parking area and P3.3 million for the market’s vegetable section.
The mayor said the city is still largely dependent on its Internal Revenue Allotment as a source of funds amounting to P458.1 million and representing 76.48 percent of its annual budget.