Personal Loan | P40-M Loan In Can For Telephone System Rehab ...

Tuesday, April 10, 2012

REPAIR and rehabilitation of the province-owned Misamis Oriental Telephone System (Misortel) is underway after the Provincial Board approved on Tuesday a resolution allowing Governor Oscar Moreno to enter into a loan agreement with the Development Bank of the Philippines (DBP).

The Provincial Government will reportedly be applying for a P40-million loan from DBP for the capital/expenditure, rehabilitation and repair of Misortel?s equipment and facility.

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Moreno said he is happy and thankful of the board?s move, citing that Misortel ?needs an upgrade in its equipment? and the idea hopes to revive and make the telephone company ?viable.?

?We have to understand where we came from. When we took over Misortel in 2004, it was hemorrhaging and dying and it was like a sinking ship. Now, it needs support for competitiveness,? he said.

Moreno said rehabilitation of Misortel requires three requirements for sustainable growth: technical capability by having equipment, tools and people; financial capability by having resources; and legal capability by having franchise.

?All these three are being threatened as far as Misortel is concerned. Franchise has elapsed during the time of former governor Antonio Calingin. It needs a renewal now that franchise needs congressional actions where the Franchise Bill has to be signed by the representatives. But the bill has been pending at the offices of two representatives of Misamis Oriental for two years now and they still don?t want to sign it. It cannot be reviewed without the congressional approval,? Moreno said.

He said Misortel also needs financial rehabilitation since it has a pending

loan with DBP that is still payable until 2016.

Aside from this, Moreno said Misortel also has another loan with the Bureau of Local Government Finance (BLGF), contracted when Cagayan de Oro Mayor Vicente Emano was still the governor reportedly for expansion program.

?Unfortunately, expansion never took place and the equipment that were bought for this loan are now obsolete and we are still paying the loan until 2016,? he said

Moreno said Misortel can still finance its operating cost.

Unfortunately, he said, the loan entered by Emano has made it very difficult and impossible for Misortel to finance both its operation and repayment of the loan ?unless the telephone company rehabilitates.?

Moreno said the planned loan with DBP hopes to address two rehabilitation issues ? technical and financial.

For the technical side, he said it would enable Misortel to use state-of-the-art equipment that will make it competitive.

He said for the financial side, the P40-million loan is the Provincial Government?s contribution to Misortel, it being the telephone company?s biggest creditor.

?After the contribution and once the equipment is put in place, the Capitol will convert its loans and its contributed property into equity and the result would enable Misortel with a debt-to-equity conversion,? Moreno said.

?Misortel now has negative net worth. Its assets are not enough to repay its loans and payables. Assets are lower compared to the liabilities and most of the liabilities are owed to the Provincial Government. What we will do is that these liabilities will be contributed as equity so that this will make the assets equal to the financial rehabilitation,? Moreno added.

However, Board Member Jesus M. Jardin objected on the proposed resolution, citing that Misortel has no chance to be rehabilitated.

?I have objected for many reasons. Misortel is actually considered a public utility of the province, which is under the special accounts. Misortel should need to submit its budget for review to the Provincial Board. But they did not submit for review. It should mean therefore that there is no budget to start when under the law, any department that was not given budget like special accounts such as hospitals, loan cannot be given. Misortel has no budget and we cannot give a loan,? Jardin said.

He added that for special account, there is a need for an ordinance on how to use the loan ?before giving an authority.?

?Personally, I do not see any chance for Misortel to be rehabilitated considering for example that if rehabilitated, you cannot compete anymore. Do you have the technology? Can you compete with Globe, Bayantel? The question is ?is the technology being used now by Misortel a technology in the future??? he said.

But even with this, Jardin said he respected the decision of the majority during the board meeting that Misortel should be rehabilitated.

?Even with the objection, we have to follow the majority, whether we like it or not,? he said.

In the proposed resolution, the P40-million loan will be used for the capital expenditure/rehabilitation and repair of Misortel?s equipment and facility.

The money will also be used to finance the procurement of Multi-Service Access Network for Cagayan de Oro and six switches located in Barangays Bulua and Gusa in Cagayan de Oro; Molugan in El Salvador, Alubijid and Jasaan in Misamis Oriental with a total capacity of 7,550 subscriber ports, including the 816 ADSL/Data parts.

The loan will also be used to purchase Cisco routers, servers, Sip border controller, power rectifiers, uninterruptible power supplies and generators, Fiber Optic cable and its accessories for the installation of fiber optic backbone in Laguindingan town and rehabilitation of the existing fiber optic.

The money will also be used to renovate and repair the business office of Misortel.

The resolution stated that the upgrading and repair of Misortel is expected to improve its technical capability and generate additional revenues and for it to be competitive.

It also hopes to increase the current value of the system and provide better service to its subscribers.

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