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Manila Bulletin devider Business devider Banking & Finance devider LGUs just asked for ₱8.5 billion in loans in single month

LGUs just asked for ₱8.5 billion in loans in single month

Published Aug 6, 2026 01:28 pm
Local government units (LGUs) significantly ramped up borrowing in July, with loan requests surging to ₱8.5 billion from ₱904.4 million a year earlier, as newly elected local officials began rolling out big-ticket projects following the 2025 elections.
According to data from the Department of Finance–Bureau of Local Government Finance (DOF-BLGF), 22 LGUs sought certificates of net debt service ceiling and borrowing capacity (CNDSCBC) in July 2026, up from seven in July last year.
The BLGF issues these certificates to LGUs to verify their capacity to repay loans from government financial institutions. The total borrowing requirement for the month increased more than ninefold year-on-year.
Ma. Teresa S. Habitan, Vice Chancellor of the DOF-attached Philippine Tax Academy (PTA), told the Manila Bulletin on Thursday, Aug. 6, that the surge shows local chief executives are eager to execute projects after completing the development plans required following their 2025 election victories.
The spike was largely driven by a ₱3-billion request from Valenzuela City for various infrastructure projects, including an ICT facility for its local university and a new 100-bed emergency hospital.
Valencia City, Bukidnon, also filed a ₱2.7-billion request to upgrade infrastructure and acquire land for resettlement. Both requests dwarfed the largest single filing in July 2025: Quirino Province’s ₱300-million request to complete its convention center and improve local roads.
LGUs’ total legal borrowing capacity rose to ₱17 billion in July from ₱10.3 billion last year. Aggregate borrowing capacity for the month was double the total loan requirement, indicating a sustained ability to settle financial obligations.
However, this coverage ratio is lower than the double-digit coverage recorded last year due to the massive scale of 2026 urban projects.
By contrast, provincial borrowing in July 2025 focused on government center expansions and rural utilities—such as Agusan del Sur’s ₱230-million request for government buildings, a sports gymnasium, and a commissary. This year, the focus shifted toward large-scale city developments and municipal modernization.
Municipal borrowing last month prioritized infrastructure and utility modernization. Notable filings included Sariaya, Quezon, which asked for ₱350 million for a two-story public market and a sewage treatment plant, and Lupon, Davao Oriental, which requested ₱251.4 million to acquire heavy equipment and land for a new government center. Aparri, Cagayan, also sought ₱225 million for a new public market.
Other significant borrowings in July included San Lorenzo Ruiz, Camarines Norte, which requested ₱200 million for a new water system, and Himamaylan City, which requested ₱200 million for a sanitary landfill facility. Overall, LGUs remained consistently focused on heavy equipment procurement, large-scale commercial hubs like markets and business parks, and health and environmental infrastructure to drive local development.

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Department of Finance (DOF) BLGF LGU Ma. Teresa S. Habitan
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