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Manila Bulletin devider Business devider Banking & Finance devider Post-election surge lifts LGU borrowing requests to ₱4 billion in May

Post-election surge lifts LGU borrowing requests to ₱4 billion in May

Published Jul 14, 2026 05:30 pm

At A Glance

  • Local government units (LGUs) showed a significant jump in the number of loan requests in May 2026 compared to May 2025, with the total financing amount increasing to ₱4 billion as borrowing efforts—which were put on hold during the 2025 election period—surged back.

Local government units (LGUs) showed a significant jump in the number of loan requests in May 2026 compared to a year ago, with the total financing amount increasing to ₱4 billion as borrowing efforts—which were put on hold during the 2025 midterm election period—surged back.

The latest Department of Finance-Bureau of Local Government Finance (DOF-BLGF) data showed that the number of LGUs seeking certificates of net debt service ceiling and borrowing capacity (CNDSCBCs) in May rose to 18 from eight LGUs in the same month last year.

BLGF issues CNDSCBCs to LGUs to demonstrate their capacity to repay loans from government financial institutions (GFIs).

Notably, the total borrowing requirement for May more than doubled from the ₱1.8 billion requested in May last year.

Ma. Teresa S. Habitan, vice chancellor at the DOF-attached Philippine Tax Academy (PTA), told Manila Bulletin on Tuesday, July 14, that the year-on-year spike was driven by the non-election period, in stark contrast to the May 2025 national and local elections, when borrowing efforts were put on hold.

“May 2025 was the election, so, necessarily, new projects and programs were still on hold, waiting for the election outcomes,” Habitan noted. “A year hence, the elected LGU officials should be hitting their stride.”

This growth was largely driven by a massive ₱1.2-billion request from Calaca City, Batangas, for the design and construction of a three-story sports arena with a 10,000-seat capacity. This request dwarfed the largest single request in May last year, which was Masbate province’s ₱707.4-million filing for road concreting and pathways.

LGUs’ total legal borrowing capacity increased to ₱12 billion in May from ₱5.9 billion a year ago.

For the month, the aggregate borrowing capacity was approximately three times the total loan requirement, implying a strong ability to settle financial obligations. While this coverage ratio is slightly lower than the 3.4-times coverage seen a year ago, the overall fiscal headroom nearly doubled in absolute terms.

Provincial borrowing shifted focus within the health and infrastructure sectors year-on-year. Isabela province sought ₱500 million for a four-story hospital building at Gov. Faustino N. Dy Medical Center.

A year ago, Apayao province requested ₱700 million for a 12,650-square-meter (sqm) multipurpose sports complex and convention center.

Infrastructure and modernization remained top priorities for municipal borrowing in May.

Among the notable requests was Bugallon, Pangasinan, which asked for ₱400 million for the acquisition of land and the construction of a new public market and business center. Lumba-Bayabao, Lanao del Sur, requested ₱260 million for the procurement of brand-new heavy equipment, including excavators, dump trucks, and a water tanker.

Virac, Catanduanes, also requested ₱229 million for road networks, a business park, and a pyrolysis facility.

Other significant borrowings in May included Orani, Bataan, and Gamu, Isabela, both requesting ₱200 million for various infrastructure projects and a new municipal hall, respectively. MacArthur, Leyte, also requested ₱150 million for cemetery rehabilitation and water system expansion.

Notably, Sapa-Sapa, Tawi-Tawi, requested ₱150 million for a brand-new passenger ship/fast craft, a significant increase from the ₱8.4 million requested by one of its barangays a year ago for a concrete footbridge and streetlights.

Overall, LGUs remained consistently focused on heavy equipment procurement, large-scale commercial centers such as markets and business parks, and health and sports infrastructure to drive local development.

Related Tags

local government units (LGUs) borrowing Department of Finance (DOF) Ma. Teresa S. Habitan
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