Direct international bonds, new funding source for LGUs?

Vicente Lao, MinBC chair, announced an emerging scheme how local government units, who play a crucial role in helping improve the business climate, could access funds.

"You will be surprised how international financing works and what available sources of funds local government could access," he said.

Lao was referring to the floating of municipal bonds to international financing organizations, which he said is now available to LGUs without jeopardizing their internal revenue allotment (IRA).

He cited the United Kingdom-based MCC Capital Projects Ltd., which is one of international finance organizations present at the first ever private-sector led investment conference in the EAGA sub-regional grouping.

The business leader said LGUs need not be at the mercy of the national government in accessing funds coursed by Official Development Aid (ODA). He said ODA funds are accessed by government to government.

"LGUs could now go directly to the funding source," he said.

He clarified that international finance outfits could provide hassle-free funding but only to LGUs who provide a viable or feasible project.

Lao describe the scheme as preparing projects that would "pay for itself" , which sometimes does not require money from the LGUs to bankroll.

He said international finance institutions could directly extend financing to projects.
He said LGUs, who are called by the Local Government Code of 1991 to perform as corporations, should go to business to supplement its IRA.

He said the IRA is very limiting and that LGUs should create projects that generate income for the local coffers.

Lao vowed MinBC would provide technical assistance to LGUs in accessing the financial scheme.

Lao was jubilant in talking to reporters at the press conference Tuesday in what he said as "very exciting two days" for the investment conference at The Marco Polo.

He cited the role of the academe for opening up to the business sector, which helped turn the pioneering event successful.

He said 45 project proposals were pushed in business matching and another 21 projects for technical assistance.

He said the proposals would be endorsed to the BIMP-EAGA Senior Officials Meeting and the Ministers Meeting this week.

Lao said it is still mining that became "star" of the investment conference with a lot of queries on the island's mineral resources.

Peace Process Adviser Jesus Dureza, who is the Signing Minister for the Philippines in the BIMP-EAGA, described the conference as a "new surge in BIMP-EAGA fueled by the private sector."

He said the proposals need to go through the higher level meetings as there are those who need government interventions.

The Second BIMP-EAGA Chief Ministers, Governors, and Heads of Local Government Forum is currently being held in Koronadal, South Cotabato where greater LGU role in development in the sub-regional grouping is sought.