9.7 Subsequently, on February 16, 2024, the Provincial Governor, pursuant to the
authority granted by the Sangguniang Panlalawigan under Resolution No. 103,
series of 2024, dated February 5, 2024 and Resolution No. 1274 dated
December 19, 2023, entered into a Term Loan Agreement with the Development
Bank of the Philippines and Landbank of the Philippines. The agreement
involved loans amounting to ₱1,800,000,000.00 and ₱4,050,000,000.00,
respectively, totaling ₱ 5,850,000,000.00, with repayment periods ranging from
9 years to 15 years.
9.8 A review of the contracts for the Construction of the Negros Oriental
Government Center and the Improvement of the Perdices Coliseum revealed
that the Bids and Awards Committee conducted early procurement activities.
However, an examination of the supporting documents showed that no project
feasibility studies were included. Consequently, on November 7, 2024, the
Audit Team requested copies of the cost-benefit analyses and feasibility studies
related to all the loan-funded projects.
9.9 In response to the audit query, the Audit Team received a reply on November
25, 2024. However, the reply neither mentioned the preparation of project
feasibility studies nor included the requested documents. This omission
suggests that no feasibility studies were prepared, which is inconsistent with
Section 2.1 of GPPB Circular No. 06-2019, dated July 17, 2019, which
explicitly require the preparation of cost-benefit analyses and feasibility studies
as part of the preparatory activities before conducting bidding or early
procurement activities.
9.10 Loans extended by lenders to the Provincial Government are subjected to the
condition that the latter, among others, execute a “Deed of Assignment,”
through which the LGU assigns, transfers and conveys to the lenders 20% of its
National Tax Allotment (NTA). This is provided under Section 2.09(i) of the
DBP Term Loan Agreement and Annex “A” of the LBP Loan Agreement.
9.11 For CY 2024, the annual NTA of the Provincial Government amounted to
₱3,126,152,772.00, or ₱260,512,731.00 per month. Of this amount, 20% was
allocated for the Development Fund, totaling ₱625,230,554.40 annually or
₱52,102,546.20 per month.
9.12 As of December 31, 2024, the outstanding loan balances of the Provincial
Government with the Land Bank of the Philippines (LBP) and the Development
Bank of the Philippines (DBP), based on the amortization schedules, amounted
to ₱1,162,093,298.05, as summarized below:
Purpose Maturity Annual Amortization
Balance
Term (in years) Date Principal* Interest** Total
Completion of the 15 07/22/29 ₱ 122,744,038.08 ₱26,780,517.48 ₱ 5,397,842.65 ₱ 32,178,360.13
Construction of
Four-Storey
Central Block
Building
Improvement of 15 11/20/39 5,967,743.41 459,057.24 272,278.33 731,335.57
Perdices Coliseum
Negros Oriental 15 07/30/39 218,923,324.27 16,840,255.68 9,988,376.68 26,828,632.36
Government
Center
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