Discounting unusual clout or influence on th lending agency, one good thing about the astronomical P2 billion loan the provincial government is getting from the DBP is the apparent trust on the capability of the camarines Sur provincial government to pay the obligation. Notwithstanding authority granted under the Local Government code for any LGU to borrow funds legitimately needed for vital projects, not every local government can easily borrow even from government financing institutions if objective evaluations would show the borrowing entity does not have the means to pay or does not have sufficient guarantee or collateral.
Aside from this lighter aspect, however, by getting a loan more than twice the annual gross revenues of the province, the provincial government of camarines Sur has assumed a gargantuan risk on which the future of the entire populace is at stake.
The Sangguniang Panlalawigan now acting as virtual rubber stamp of Governor L-ray villfuerte has authorized the loan obviously without thoroughly determining how the money that had never before entered the coffers of the provincial government would be spent, more so without analyzing the consequential burden on the provincial government and the people. it is true that some tourism projects were identifi ed pursuant to the requirement of the lending institution but would these projects if completed be able to immediately raise revenues to help bail the provincial government out of the financial straits it will certainly get into?
Curiously enough, some projects proposed to be funded from the loan are rehabilitation of school buildings and farm-to-market roads. Why must the provincial government borrow for that purpose when President Gloria Macapagal Arroyo has just allocated P7 billion for rehabilitation projects in Bicol, mostly for Albay and camarines Sur? On her last visit here on November 28, the President was even reported to be piqued that despite the availability of funds from the national government rehabilitation of school buildings and the core shelter projects have not been completed by inefficient and incompetent agencies in charge of the rehabilitation work. Last week in Masbate the President even hinted she would go after some Bicol officials responsible for ghost projects (see story on Score slow implementation of DSWD core shelter project).
Even if authorized under the local Government code, availing of interest-bearing loans should always be the last, not the first recourse of any local government because of the onerous character of the obligation. Taking together other current loan obligations the provincial government may have to pay some P250 million in interest alone if the interest rate is 10%.
Many affluent foreign governments are offering grants or soft-term concessional loans for truly meritorious development projects. Has the provincial government endeavored to tap this window before plunging into this P2 billion loan that could chain the provincial government to perpetual indebtedness?
Was the provincial government truly desirous in pushing certain projects or was it just after something else? How urgent and truly necessary are some projects that the provincial government has to resort to borrowing? Schoolbuildings are basically the responsibility of the national government, just as most farm-to-market roads are. Why must the provincial government borrow for the purpose when the national government can directly fund such projects?
Prudence and sound fi scal management would not at all sustain such flimsy purposes.
These are what the people of camarines Sur are asking as they predict that the curse of Sisyphus has come upon the province.
