Asset-Rich, Cash-Poor

There is a glaring disconnect in the narrative coming out of City Hall. On one hand, we are sold the image of Iloilo City as an economic powerhouse – the “6th richest” in the country with assets north of PHP 50 billion.

On the other, we are told by City Councilor Rex Marcus Sarabia that the city has “no capacity” to fund a basic college campus without borrowing PHP 300 million.

You cannot have it both ways. You cannot boast of immense wealth and then plead poverty when it’s time to fix a school.

The administration’s move to secure this loan from the Development Bank of the Philippines (DBP) brings the city’s total debt obligation to over PHP 2.5 billion. While officials are quick to dismiss this as “usual practice” or hide behind the comfort of a “grace period,” the public deserves a much harder look at the numbers.

Yes, the ICCC needs this campus. With 1,300 students facing the threat of losing CHED accreditation – and the critical tuition subsidies that come with it – doing nothing is not an option. We cannot hold the education of the city’s youth hostage to bureaucratic failures. If the facilities are deteriorating to the point where accreditation is at risk, that is a failure of maintenance that should have been addressed years ago, not an emergency that suddenly requires a 15-year mortgage.

But the financial backdrop of this loan is worrying. We are borrowing money at a – time when our economic engine is sputtering. Growth has slowed from 10.4% to 7.1% – the sharpest decline among all highly urbanized cities in the country. Even more alarming, despite a property tax hike in 2024, actual collections for the first nine months of 2025 dropped by 9%.

When a city raises taxes but collects less, something is broken. Is it inefficiency? Or are people simply unable to pay? Adding a PHP 300 million liability with 4.5% annual interest into this mix feels less like a strategic investment and more like a stopgap measure for a budget that is structurally unsound.

Councilor Sarabia admits that half the city’s PHP 4.5 billion annual budget goes to salaries and a third to operations, leaving “very little” for infrastructure. This is the crux of the problem. We have built a bureaucracy so expensive to run that it consumes nearly every peso it collects, forcing us to borrow for actual development.

The promise that this loan will be “self-sustaining” or covered by future CHED subsidies is optimistic at best. We need to see the math. City Hall should publish a clear amortization schedule – not just the “grace period” pitch – alongside a real plan for how they intend to reverse the slide in local revenue collection.

Borrowing isn’t inherently bad. But borrowing because you have failed to manage your existing wealth efficiently is a dangerous habit. We need to ensure this “grace period” doesn’t just delay the pain until the next administration – and the next generation of taxpayers – has to foot the bill.