COMMENTARY: Treading on dangerous grounds

March 17-23, 2011

Nabunturan officials who had then been pushing for the P90-million bond flotation should not hurry now, now that they are resorting to a direct bank borrowing with their intent of negotiating for an P80-million loan with the Land Bank of the Philippines. First, they have to formally close the chapter of the bond flotation, which Mayor Romeo Clarin implemented for the construction phase despite the existing injunction issued by Regional Trial Court Branch 3 Judge Hilarion Clapis Jr on November 4, 2009.

With this, the new Sangguniang Bayan should first formally repeal Municipal Ordinance 2008-10 which the SB during the last term of former Mayor Macario Humol had approved to authorize the P90-million bond flotation. Because the bond flotation ordinance was also confirmed by the Sangguniang Panlalawigan in its SP Resolution No. 215, series of 2008, the new measure repealing the bond flotation ordinance should also by repealed by the new, current SP. That should be the first order of business before the measure authorizing the mayor to negotiate, sign and execute for and behalf of the municipality a loan worth P80 million with the LandBank. That measure repealing the bond flotation regime should first be separate and not lumped with the measure heralding the new regime of direct bank borrowing through a repealing clause because it would be so presumptuous that the two regimes are only the same and one. How can the new Nabunturan SB enact a two-pronged measure in one ordinance that simultaneously junk the much-touted other in not a clear note, through a rider- the repealing clause, and at the same time call for a go-signal for the bank loan?

But we have heard that the new SB is poised to take this two-in-one measure. That should not be. Because the P90-million bank flotation was further implemented by Clarin administration after it was started by the previous Humol administration with all those millions-worth of expenses incurred for the preparation and the biddings- the first a failed one and the second which led to the infusion of some P20 million for the foundation works of the two-storey “mall-type” public market building (even as the Nabunturan public have not yet seen any single indication that a structure is rising at the burned site in the public market)?

At this early, we heard that the bond float financial advisor Preferred Ventures Corporation would be billing some P1.8 million, and that a buy-out scheme would be made wherein part of the bank loan would be paid to pay and liquidate the P20 million-worth of investment made by the contractor which did the pre-engineering and foundation works for the public market building. As far as the bond flotation concept is concerned, there is yet no proceeds of the bonds as we heard no announcement of the bonds auctioned for the general public to buy, while the Veterans Bank Manila as an institutional buyer intending to buy the bonds in bulk is reportedly not releasing any single amount due to the existing court injunction stopping the bank flotation. There’s yet “no cure”, no bond proceeds, and why should Preferred Ventures Corp. be paid of P1.8 million when during the preparatory phase of the project it bragged so much about its “no cure, no pay” mode of payment for the bagged P2.7-million consultancy pay?

We fear that Clarin and the current Nabunturan SB are treading on dangerous grounds.That is when they would implicitly and indirectly repeal the bond flotation ordinance, and pay the Preferred Ventures Corp and engage a buy-out to the P20-million infused by the contractor under the bond flotation regime from the loan drawn out from direct bank borrowing, which is another, a new financing regime. – Cha Monforte

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