AC falls into debt trap as debt payment soars to P233 million: Cauguiran

Angeles City mayoralty bet and KAMBILAN official candidate Alexander S. Cauguiran said “the city’s debt payment in 2019 will climb to a new high of P233 million, taking a heavy toll on the city’s social services as it irreversibly falls into a disastrous debt trap for 15 years..”

“The city government’s total outstanding debt has ballooned to P1.6 billion, the largest in the city’s history, and its yearly debt payment shall increase from P179 million in 2018 to P233 million this year as the installment for the P1.22 billion loan from the Development Bank for the Philippines (DBP) start to kick in,” Cauguiran said.

“This massive borrowing,” Cauguiran warned, “exacts a heavy toll on the city’s basic social services. Take the case of the Ospital Ning Angeles (ONA). Its 2019 budget for drugs and medicines amounts to only P4 million, and P11 for medical, dental, and laboratory supplies and equipment. This was approximately the same amount appropriated for the same items last year, while the city paid P179 million to service its loan.”

“No wonder, Cauguiran said, “most ordinary city residents are complaining of the dire lack of medicines and medical supplies at the city-owned hospital. Indeed, how can one reconcile that city spends P233 million for debt service while providing a measly P15 million for ONA’s medicines and medical supplies?”

Over a period of only 2 years and four months,” Cauguiran said, “from April 1, 2016 to June 13, 2018, the city government has borrowed a total of P1.5 billion, consisting of P31 million for purchase of motor vehicles, P249 million for infrastructure projects, P183 million for purchase of equipment and motor vehicles; and P1.043 billion for infrastructure projects consisting of a sports complex, a new city hall, and a multi-level steel parking. “

‘If you add the recent borrowings and the loans of the previous years and deduct the payments thus far made, the city’s total debt in 2019 shall stand P1.6 billion, 75% of which could be attributed to the latest two term loans from the DBP in the amount of P1.22 billion.”

Caugurian also observed that the city’s 2018 budget is indicative of how the city’s debt has drastically reduced its fund for maintenance and other operating expenses (MOOE).

“After expenditures for debt service, 20% development fund, calamity fund and other special purpose funds, and personnel services, the city was left with only P371 million left for MOOE. This amount is expected to precariously dip to a little more than 300 million this year. As the reduction of MOOE which funds the operational and maintenance expenses of all the city government’s departments and offices, and for the payment of wages of job order personnel would inevitably result in the deterioration of the delivery of basic services,” Cauguiran said.

“I’m not sure,” Cauguiran said, “if Vice Mayor Bryan Nepomuceno is fully aware of this precarious financial problem. The council is vested with the authority to approve the city government’s expenditures, and as head and presiding officer of that body, he is mainly responsible to ensure an equitable distribution of resources, particularly for basic services like health and education. To spend P1. billion for a sports complex, a new city hall, and multi-level street parking in one fell swoop of borrowed money is most inconsiderate to the needs of ordinary residents that comprise about 80% of our population.”

Cauguiran lamented that both Nepomuceno and Councilor “Pogi” Lazatin, “who are both aspiring for the city’s mayoralty post have fully consented to the P1.22 billion loan from DBP, without due regard to the financial bind of the city government that goes beyond the three-term limits for elected officials. “

“I have always said that there should be a paradigm shift in local governance, from one that merely collects, borrows, and spends public money year in and year out. Deftly managing financial resources is pre-requisite of good governance,” Cauguiran said.

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