Rich City, New Debt, Same Old Questions

Iloilo City wants to borrow PHP 300 million from the Development Bank of the Philippines to build a new Iloilo City Community College campus, and the part that sticks is not the loan itself but the way City Hall talks about it like there was never a choice.

We keep hearing “rich city” in the same breath as “no capacity to fund,” and those two lines do not sit comfortably together.

The Commission on Audit’s 2024 figures that local officials also cite put Iloilo City at about PHP 39.5 billion in total assets, good for sixth nationwide, so the public is not crazy to ask why a basic education facility still needs fresh debt.

Yes, assets are not cash, and yes, cities borrow for long-life projects all the time, but that is exactly why leaders owe people the plain-number version, not the comforting one-liners about “usual practice.”

Councilor Rex Marcus Sarabia says the annual budget is PHP 4.5 billion and that roughly half goes to salaries and a third to operations, leaving “very little” for infrastructure, and that may be true, but it is also an admission that the city’s budget is structurally boxed in.

When a budget is boxed in, borrowing stops being a strategic option and starts becoming a habit, and habits are how debts quietly pile up beyond the point where the next mayor inherits choices that are already made.

Right now, the city is already carrying more than PHP 2.5 billion in outstanding debt, and this new PHP 300 million loan, set for 15 years at 4.5% interest, will be the first under Mayor Raisa Treñas-Chu, so the transparency bar should be higher, not lower.

The city also keeps leaning on the “grace period” argument, but grace periods can lull people into thinking the bill is not real yet, when in practice the obligation is already there and the pressure simply shifts into the future.

On the education side, the urgency is real because the city itself is saying the current ICCC facilities are deteriorating and could jeopardize CHED accreditation, and that risk lands on about 1,300 students and their families, not on the politicians.

If ICCC loses accreditation, Sarabia warns students may be pushed to pay full tuition, and that hits harder because ICCC currently receives an annual CHED subsidy of PHP 14 million, which is not pocket change for a family trying to keep a child in school.

So here is the fair deal the city should offer the public: publish a simple debt dashboard with the full amortization schedule, the projected annual debt service, the interest cost, and the exact split of what PHP 300 million covers in Phase 1 and what is honestly expected for Phase 2.

And while they are at it, publish a real capital plan that shows what gets delayed, downsized, or dropped because ICCC is prioritized, because “we also have ongoing projects” is not an explanation unless we see the trade-offs.

This matters more now because Iloilo City’s competitiveness story is not on autopilot forever, and in 2024 it was declared fifth most competitive among highly urbanized cities, which is a reminder that rankings rise and fall depending on whether governance stays sharp.

Build the campus, protect the students, but stop asking people to clap for the borrowing without showing the math, because a “rich city” brand is only worth something if it can survive the simplest question: where did the money go, and what is the plan from here.