Issue of November 3, 2019
     
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2 banks offer loans for Baguio public market development
by Aileen P. Refuerzo / PIO

Two banks have offered unsolicited proposals to fund through a loan the development of the Baguio public market, which was pegged at P2.5 billion.

United Coconut Planters Bank and Development Bank of the Philippines have presented their proposal at the city council last Oct. 28.

Local Finance Committee member City Accountant Antonio Tabin said the city government expects to receive more proposals from financing institutions following the mayor’s broaching the possibility of securing a loan to finance the development of the market.

Tabin said while the mayor and the LFC have yet to formulate the guidelines on financing, and the technical working group and City Buildings and Architecture Office brainstorming on the design of the market, the city government should welcome all proposals so that the city will have basis on which bank has the best offer.

He said matters such as the reckoning date of payment of amortization, interest rate, and years of payment are crucial when choosing which financial institution could give the best offer to Baguio. 

“For instance, if the development of the market will take three years, questions on when the bank will start counting payment of amortization – will it be at the start of the construction, or after full development? Nu kuna ti bangko nga during commencement of construction ti amortization, malugi tayo met sunga masapol nga adalen amin,” Tabin said.

He said if the city government is able to get a favorable proposal, it is possible that income from the market alone could cover the amortization without the city council having to allot funds for it.

“Baka pwedeng self-liquidating so the city does not have to allot additional funds,” Tabin said. 

The city government previously shunned availing of loans, but Tabin said this was because there were no impact projects in the past but with the current administration’s thrust of modernizing the market, Tabin said the city now has to avail of financing schemes as internal sources of revenue alone is not enough to finance a project as big as market development project.

The technical working group created to craft the market master development plan has already submitted its design concept to city officials last week. The city council gave its initial approval of the plan with a condition that this will also have to be presented to Baguio’s constituents via a public consultation.

The market development plan entails the demolition of the Magsaysay building to give way for the construction of a five-story structure with basement parking, construction of sewerage treatment plant, road links to Kayang and Hilltop, and offices, among others.

Meanwhile, the city government rejected Uniwide Chair Jimmy Gow’s intent to proceed with and execute the design-build-lease (DBL) agreement with the city for the development of the city public market, saying the agreement has been deemed terminated due to the dissolution of the Uniwide Sales Realty and Resources Corporation (Uniwide).

In a letter to Mayor Benjamin Magalong dated Sept. 20, Gow reiterated his intent to continue with the project and requested for the city to issue a notice to proceed citing the finality of the resolution issued by the Supreme Court dated March 14, 2016 and the entry of the judgment having been made which upheld the validity of the design-build-lease agreement and Ordinance 38, s. 1995.

In his reply, Magalong said the DBL agreement is deemed terminated by operation of law; Uniwide is deemed dissolved and its corporate or juridical existence terminated; all assets of Uniwide are now vested in the court-appointed liquidator; and it has no more legal standing to deal with the city of Baguio with respect to the DBL agreement as all matters pertaining to the agreement have been transferred by law in the hands of the liquidator.

He said the city’s legal stand is based on Section 113 of Republic Act 10142 or the Financial Rehabilitation and Insolvency Act of 2010 in the wake of the court’s issuance of liquidation order dated Nov. 23, 2017 against Uniwide Group of Companies including the Uniwide Sales Realty and Resources Corporation with which the city entered the agreement.

He informed Gow that the city had communicated its stand to court-appointed liquidator retired Justice Martin Villarama.


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