UMVA has learned that a significant surge in local government units (LGUs) obtaining Department of Finance certification for their borrowing capacity has taken place, with a more than twofold increase recorded in May.
The boost in certifications comes as the Bureau of Local Government Finance reported issuing 20 new Certificates of Net Debt Service Ceiling and Borrowing Capacity in May, a substantial rise from the eight certificates issued during the same period last year.
LGUs are required to secure this certification before approaching government or private lenders for loans to fund proposed projects, highlighting the critical role these certificates play in facilitating local development initiatives.
In May, the certificates covered proposed loans amounting to P4.04 billion, which represents about 31.5% of the LGUs' borrowing capacity. This marks a considerable increase from the P1.75 billion recorded in the same month the previous year.
Municipalities were the primary beneficiaries, accounting for 17 of the 20 certificates issued during May, with one certificate each granted to a city, a province, and a barangay, showcasing the diverse range of local government entities engaging in development projects.
From January to May, the Bureau issued 108 certificates that covered proposed borrowing totaling P25.68 billion, with 77 municipalities, 12 barangays, 11 cities, and eight provinces receiving these certifications.
The largest certification issued this year was for a P3.5-billion borrowing proposal aimed at funding infrastructure projects and procuring equipment and vehicles in Camarines Sur, highlighting the scale and ambition of local development plans.
Other significant projects included a P2.19-billion certification for constructing a new public market and city hall extension building in Dumaguete City, and a P1.2-billion proposal for building a three-storey sports arena in Calaca City, Batangas.
