‘NO CAPACITY TO FUND’: City seeks P300-M DBP loan for new ICCC campus

By Rjay Zuriaga Castor 

The Iloilo City government is seeking a PHP 300 million loan from the Development Bank of the Philippines (DBP) to fund the construction of a new Iloilo City Community College (ICCC) relocation site.

If approved, it would be the first loan under the administration of Mayor Raisa Treñas-Chu, adding to the city’s outstanding debt of over PHP 2.5 billion as of 2025.

The proposed 15-year loan carries an annual interest rate of 4.5 percent and will fund the construction of five three-story academic buildings, an administrative building, a covered gym, a drainage system, and other facilities.

The new ICCC campus is planned for city-owned land in Barangay Concepcion-Montes, Fort San Pedro, City Proper. The site was previously occupied by the Department of Public Works and Highways–Iloilo City District Engineering Office, which was evicted in June 2024.

Currently, the college operates on M.H. del Pilar Street in Molo.

Councilor Rex Marcus Sarabia, chairperson of the Committee on Appropriations, said it is yet to be determined whether the loan will cover only Phase 1 (structural phase) of the project or include Phase 2, which involves furnishing and finishing.

Sarabia admitted the city cannot fund the construction solely from its annual budget.

“Our annual budget is PHP 4.5 billion. Half goes to salaries, and a third to operational expenses. That leaves very little for infrastructure projects. We also have ongoing projects, like social housing relocation sites, so it would be difficult to finance the ICCC redevelopment simultaneously from our budget,” he said.

“That is something that cannot be financed by the city government if we source from the annual budget,” he added.

Sarabia said the ICCC administration intends the loan for Phase 1 only.

He added that if the construction bidding comes in lower than expected, the city may be able to fund Phase 2 without securing another loan.

“I don’t think we will need another loan for Phase 2 because the Local Finance Committee is not in favor. If Phase 2 costs are lower than expected, the city government may be able to fund the construction,” he said.

“After three years of construction, the city’s income and budget would likely increase, making it easier to cover the cost through our annual budget,” he added.

The City Council on Wednesday granted Mayor Treñas-Chu the authority to sign the loan agreement.

Sarabia described the loan as a “usual practice” for local government units seeking capital for infrastructure.

He emphasized that Iloilo City still has a borrowing capacity of PHP 2.4 billion.

He added that the loan will include a grace period during which the city will not be required to pay the principal.

By the time principal payments begin, the city’s other DBP loans will have matured, keeping debt servicing stable.

“The city’s financial position in terms of repaying the loan will remain stable over the next three years. Even if city revenues increase during that period, debt servicing will stay constant,” he said.

Sarabia also explained that ICCC urgently needs a new or redeveloped campus due to the poor condition of its current facilities.

He said the college’s buildings are deteriorating and no longer meet the requirements for maintaining its Commission on Higher Education (CHED) accreditation.

“The necessity is that we fear ICCC could lose its accreditation if it remains in the current campus, as the facilities are already deteriorating. They no longer meet the requirements of the original campus or the standards needed for CHED accreditation,” he said.

ICCC currently receives a PHP 14 million annual subsidy from CHED.

Sarabia warned that if accreditation is lost, students may be forced to pay full tuition.

The school currently enrolls around 1,300 students.

According to its administration, increasing the campus capacity could make the college financially “self-sustaining” and contribute to repaying the loan.

Over the 15-year loan term, CHED-subsidized tuition fees could amount to around PHP 200 million.

“That is already fair. The city can get additional facilities, and we can give more services. And it is self-sustaining. It could pay for its loan, then why not? It is a win-win situation,” Sarabia said.