ILOILO City – Even as it allots more than P227 million for debt servicing in 2026, the Iloilo City Government is moving to secure a fresh P300-million loan for a major campus relocation project, with officials insisting the city still has a P2.4-billion borrowing capacity to bankroll priority infrastructure.
City records show that Iloilo City will pay P115,465,051.29 in principal amortization and P111,720,765.98 in interest this year, or a total of P227,185,817.27. The city’s outstanding loan balance from 2012 to 2023 stands at P2.52 billion, largely tied to infrastructure and social development projects.
The biggest obligation stems from a P2.04-billion loan obtained in 2022 from the Development Bank of the Philippines (DBP), with a remaining balance of P1.99 billion. The loan financed the rehabilitation of public markets, construction of the Iloilo City Hospital, and a multi-level parking building.
Additional DBP loans funded land acquisition for socialized housing relocation sites and the Iloilo City Slaughterhouse, while financing from the Land Bank of the Philippines supported school building projects. The National Housing Authority also extended loans for resettlement infrastructure. All borrowings carry a 15-year repayment term.
Despite these obligations, city officials said Iloilo City retains fiscal headroom.
Councilor Rex Marcus Sarabia, chair of the Sangguniang Panlungsod’s Committee on Appropriations, said the proposed P300-million DBP loan will fund the relocation campus of the Iloilo City Community College (ICCC) at the former Department of Public Works and Highways property in Barangay Concepcion, Fort San Pedro.
He said the city’s P4.5-billion annual budget leaves little room for large-scale capital outlays.
“About half of our annual budget already goes to salaries, and a big portion also goes to operational costs of offices. What remains is not enough to finance large projects like the ICCC relocation, which involves several multi-storey buildings, roads, drainage, and other facilities. That is why borrowing is a usual and practical option for LGUs to increase capital,” Sarabia said.
Sarabia stressed that the ICCC relocation is urgent, citing deteriorating facilities and accreditation risks.
“If we fail to improve or redevelop the campus, there is a risk that ICCC could lose its accreditation and even its national government subsidy. That could eventually force students to pay full tuition, which we want to avoid,” he added.
ICCC currently serves around 1,300 students and receives approximately P14 million annually in subsidy from the Commission on Higher Education (CHED). Projections submitted to the City Council indicate that with expanded capacity and enrollment, the college could become self-sustaining and generate enough income to help service the proposed loan.
Sarabia said the Local Finance Committee and the Department of Finance have assured the council that Iloilo City still has a borrowing capacity of P2.4 billion. If the P300-million loan is approved, the remaining headroom would be around P2.1 billion.
He also clarified that the city will pay interest only on the amount actually released, not on the entire approved loan, and noted that some older loans with higher interest rates are expected to mature in the coming years.
“With these factors, our debt servicing is projected to remain manageable over the next three years. The city’s income is also expected to grow, which will further strengthen our capacity to meet our obligations,” Sarabia said.
City officials emphasized that current and proposed borrowings are directed toward long-term projects aimed at expanding public services, upgrading facilities, and strengthening social development programs, while fiscal managers continue to monitor the impact of rising debt payments on future budgets and planned initiatives./PN
