Two dates decide this story. A bank said yes on June 3. The City Council allowed the mayor to start talking to banks on July 14. Both dates come from papers City Hall gave the Council itself.
DUMAGUETE CITY — The Development Bank of the Philippines approved a ₱974-million term loan for Dumaguete on June 3, 2026. Six weeks later, on July 14, the Sangguniang Panlungsod gave Mayor Manuel Sagarbarria the authority to negotiate it.
That is the shape of the ₱2.185-billion borrowing the city is now committed to for 15 years: the bank decided first, and the Council was asked afterwards.
The papers showing this were not obtained from anyone. City Administrator Neil Ray Lagahit submitted them to the Council on the executive's behalf, answering a September 4 letter from three councilors — Franklin Esmeña, Renz Macion and Rey Lyndon Lawas — who had asked for the negotiation letters, the banks' replies and "all other relevant communications."
At the front of the bundle is a six-page chronology from the Office of the City Legal Officer. It says every step followed the law "in their proper sequence" and finishes with a line inviting scrutiny: "The record speaks for itself."
City Hall says there was no application. Its own letters say there was.
The chronology argues the June approval was just the bank's internal paperwork, and "does not, however, constitute an official loan application, as the City has yet to submit any such application to the bank."
Four documents in the same bundle say otherwise:
- The mayor's letter of February 10, 2026 to the Bureau of Local Government Finance begins with "the loan application of the Local Government Unit of the City of Dumaguete."
- The BLGF certificate of March 12 is issued "relative to its loan application."
- The BLGF letter of the same day to the Acting City Treasurer refers to "the loan application of Dumaguete City."
- DBP's approval letter, in the June 3 version and the August 12 revision, approves "a contract of loan applied for."
What the bank sent in June was not a suggestion. It carried a four-page term sheet, three years to draw the money, and a clause cancelling the loan if the documents were not signed within a year.
The Council removed one word
On July 10 the mayor asked for authority "to apply and negotiate." On July 14, at the instance of Councilor Jason Patrick Lagahit, chair of the Committee on Rules, the Council deleted "apply" and kept "negotiate."
By that day the application was five months old and already approved.
The price came before the plan
The chronology says the city identified the project first, costed it, then asked banks for offers.
The attachments show the opposite order. Land Bank's offer sheet is dated January 5, 2026 and already carries the exact amounts: ₱1,948 million for the four-storey market, ₱237 million for the City Hall extension. The City Engineer's own cost estimate with those figures is dated January 16 and 18. The projects were added to the 2026 Annual Investment Plan on July 7.
A bank knew the price eleven days before the city's engineers wrote it, and six months before the city's planners approved the projects.
The "negotiation" repeated the old offer
Both banks wrote on July 23. Each letter starts with "This is to reiterate our offer," and the terms are the same ones from January and February. On July 31 the Local Finance Committee compared those repeated offers with a Veterans Bank proposal dated February 12, and chose the banks.
One letter in the file is harder to explain. Veterans Bank says a City Hall officer, Leonidasa C. Oira, went to its Dumaguete branch on July 21 and asked that its February 12 proposal be re-dated to July 23, with nothing else changed. The bank said no. A February paper dated July would have fallen inside the authority the Council gave on July 14.
The ₱1-billion condition the Council was not told about
On August 27 the mayor told the Council the rate was "fixed at 4.50% per annum." On August 25 the city's Feasibility Study Committee told the independent reviewers it was fixed for all 15 years, with no repricing.
DBP's June 3 term sheet says the 4.5 percent holds only while the city maintains "at least ₱1.0 Billion in CASA deposits." Without that, the rate is recomputed every three months at three-month BVAL plus a spread, or 5.50 percent, whichever is higher.
For comparison, the city's total revenue in 2022 — from the financial statements in the same bundle — was ₱1.22 billion.
DBP's August 12 term sheet removed both sentences. The draft contract sent to the Council on August 27 still contains the repricing rules, and the deposit figure is left blank.
Four days before the vote
On September 4 the City Legal Officer asked both banks to delete the repricing clauses, "since the loan shall bear a fixed interest rate of 4.5% per annum for the entire term of the loan." That letter admits the contracts were not fixed-rate as written. No bank reply is in the bundle. The Council passed the ordinances on September 8, on second and third reading in the same session, approving contracts "as amended" by changes the banks had not accepted.
What this means for Dumagueteños
The city is borrowing ₱2.185 billion and will repay it over 15 years. The Council that is supposed to decide whether the city borrows at all was brought in after the bank had approved, and was told the rate was fixed while the condition attached to that rate sat in City Hall's files from June.
If the deposit condition applies and the city cannot keep ₱1.0 billion on deposit, the interest is recomputed quarterly — against a city whose total 2022 revenue was ₱1.22 billion.
The Remollo section
The chronology ends by pointing at former Mayor Felipe Antonio Remollo and a 2023 BLGF application filed "sans any authority from the City Council," with a certification from the Council secretary dated September 8, 2026 — the day of the vote — saying Remollo never asked for that authority.
The bundle's own annexes show that application stopped early: BLGF called it incomplete in January 2024, and there was no certificate, no Monetary Board opinion, no bank approval and no request to the Council. DBP told Remollo in 2023 to submit a Council resolution first.
Still unanswered
Who gave Land Bank the January figures. Whether the banks accepted the September 4 deletions. What deposit amount DBP will write in the blank space. Why the Council was told "fixed." And whether the July 21 request to re-date a bank proposal was one officer's idea or an order.
READ NEXT IN THIS SERIES: How the three bank offers compare — Three Banks, One Excuse: Dumaguete Threw Out the 4% Offer for Being Variable — the 4.5% Ones Are Too