Dumaguete's ₱2.185-billion borrowing programme has been ratified step by step since July. The documents City Hall handed its own Council show the decisive step was taken in June, by a bank.
DUMAGUETE CITY — There is a sequence the Local Government Code expects of a city that wants to borrow money: the council authorises, the executive negotiates, the bank responds. In Dumaguete, the documents the executive department submitted to the Sangguniang Panlungsod describe that sequence running the other way.
The Development Bank of the Philippines approved a ₱974-million term loan for the city on June 3, 2026. The Council granted Mayor Manuel Sagarbarria the authority to negotiate it on July 14, 2026 — six weeks later.
Both dates come from the same bundle: the papers City Administrator Neil Ray Lagahit brought to the Council in answer to a September 4 letter from Councilors Franklin Esmeña, Renz Macion and Rey Lyndon Lawas, who had asked for the negotiation letters, the banks' replies and "all other relevant communications." The submission is introduced by a six-page chronology from the Office of the City Legal Officer, which maintains that each step was taken "in strict accordance with law, in their proper sequence," and ends: "The record speaks for itself."
An application that four documents describe and one denies
The chronology's position is that the June approval was a bank's own paperwork and "does not, however, constitute an official loan application, as the City has yet to submit any such application to the bank."
Four pages of the same bundle use the phrase anyway. The mayor's February 10, 2026 letter to the Bureau of Local Government Finance begins "Relative to the loan application of the Local Government Unit of the City of Dumaguete with the Development Bank of the Philippines and Landbank of the Philippines." The BLGF certificate of March 12 is issued "relative to its loan application," and the bureau's letter of the same date to the Acting City Treasurer speaks of "the loan application of Dumaguete City." DBP's own approval letter — in the June 3 text and again in the August 12 revision — approves "a contract of loan applied for."
What DBP issued in June was not an invitation. It came with a four-page term sheet, an availability period of three years from the date of notice, and a clause cancelling the facility automatically if the loan documents went unsigned for a year. Banks reserve that machinery for credit they have already decided to extend.
A single deleted word marks the gap
On July 10 the mayor asked the Council for authority "to apply and negotiate." Four days later, at the instance of Councilor Jason Patrick Lagahit, who chairs the Committee on Rules, the Council removed "apply" and kept only "negotiate."
The application it declined to authorise had been filed in February and approved in June. The narrower wording did not restrain anything; it simply left the application outside the record of what the Council had permitted.
Prices that preceded the project
By the chronology's account, the city followed an eight-step method: place the project in the Annual Investment Plan, cost it, then ask banks for offers.
The annexes run in reverse. Land Bank's offer sheet, filed as Annex A, is dated January 5, 2026 and already states the figures the city would eventually adopt — ₱1,948 million for the four-storey market, ₱237 million for the City Hall extension. The City Engineer's Program of Work and cost estimate carrying those same amounts are dated January 16 and 18. The projects themselves entered the 2026 Annual Investment Plan by addendum on July 7.
A lender therefore priced the works eleven days before the city's own engineers did, and half a year before the city's planners formally adopted them. Where those December figures originated, and who passed them to the bank, the chronology does not take up.
Nothing was negotiated after the authority to negotiate
If the July authority set negotiations in motion, the bundle records no trace of them. The letters both banks sent on July 23 open with "This is to reiterate our offer" and repeat, word for word, terms already tabled in January and February. On July 31 the Local Finance Committee assessed those repeated offers and found them better than a Veterans Bank proposal dated February 12.
One document in the file speaks to intention rather than sequence. Veterans Bank, writing on July 23, recounts that a City Hall officer, Leonidasa C. Oira, came to its Dumaguete branch on July 21 and asked for the February 12 proposal to be re-dated July 23 on identical terms. The bank refused. A February document bearing a July date would have fitted neatly inside the authority the Council granted on July 14.
The condition attached to 4.5 percent
The mayor's letters of August 27 told the Council the interest rate was "fixed at 4.50% per annum." The city's Feasibility Study Committee had gone further on August 25, telling the independent reviewers the rate was fixed for the whole 15-year term with no repricing.
DBP's June 3 term sheet, sitting in the same bundle, attaches a condition to that rate: it holds only with "maintenance of at least ₱1.0 Billion in CASA deposits." Fall short and the loan reprices every quarter at three-month BVAL plus a spread, or 5.50 percent, whichever is higher. For scale, the financial statements included in the bundle put the city's total 2022 revenue at ₱1.22 billion.
DBP's revised term sheet of August 12 dropped both sentences. The draft loan agreement sent to the Council on August 27 retains the repricing mechanism and leaves the required deposit figure blank. The Council was told the rate was fixed; the condition that made it conditional had been in City Hall's files since June.
An admission four days before the vote
On September 4 the City Legal Officer asked both banks to strike the repricing clauses from the draft agreements, "since the loan shall bear a fixed interest rate of 4.5% per annum for the entire term of the loan." The request concedes what the drafts said. No answer from either bank appears in the bundle. On September 8 the Council passed the borrowing ordinances on second and third reading in one session, adopting the agreements "as amended" — by amendments the banks had not agreed to.
What the Council was left to do
Taken in order, the file describes terms settled with banks in January and February, regulatory clearances obtained in March and April, a bank approval issued in June, and only then a request for the Council's authority to negotiate. That authority was then used to certify as negotiated a set of terms that had not changed. When the contracts turned out to differ from what the Council had been told, the executive asked the banks to alter the contracts, and the Council voted before the banks replied.
The Code casts the Sanggunian as the body that decides whether a city borrows. In this file it appears as the last signature on an arrangement already complete.
The comparison with the previous administration
The chronology closes by turning to former Mayor Felipe Antonio Remollo, citing a 2023 application to the BLGF filed "sans any authority from the City Council," together with a certification from the Council secretary — dated September 8, 2026, the day of the vote — that Remollo never sought such authority.
The bundle's own annexes limit the comparison. BLGF found the 2023 application incomplete in January 2024 and it advanced no further: no certificate, no Monetary Board opinion, no bank approval, no request to the Council. DBP wrote to Remollo that year asking for a Sanggunian resolution before anything could proceed. A file that stalled at the counter is not a precedent for an approval secured six weeks ahead of the Council's authority.
Questions the file leaves open
Who supplied Land Bank with the January figures, and on what basis. Whether either bank has accepted the September 4 deletions, or whether the mayor will sign a repricing contract under an ordinance describing a fixed rate. What deposit balance DBP will enter in the blank. Why the Council was told the rate was fixed while the June 3 term sheet lay in City Hall. And whether the July 21 request to re-date a bank proposal came from one officer's judgement or from instruction.
The documents were submitted to demonstrate an orderly process. What they set out is a process whose final step was the Council's.