Bureau of Local Government Finance Opinion

November 21, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Hon. Jose T. Cuyos, Sr. Municipal Mayor Rosario, Agusan del Sur Sir : Transmitted herewith is the Certification of Net Debt Service Ceiling and Borrowing Capacity for the Municipality of Rosario, Agusan del Sur relative to its loan application with the Department of Finance-Municipal Development Fund Office (DOF-MDFO) under Mindanao Basic Urban Services Sector Project (MBUSSP) for the construction of municipal hall. Very truly yours, (SGD.) JOSE ARNOLD M. TAN, Ph. D. Director II Certification No. 11-11-476 CERTIFICATION This is to certify that per records of this Office and the financial statements submitted, and based or the Net Debt Service Ceiling in the amount of THIRTEEN MILLION NINE HUNDRED TEN THOUSAND PESOS (P13.910M) computed in accordance with Section 324b of the Local Government Code, the Borrowing Capacity for the Municipality of Rosario, Agusan del Sur for CY 2011 is computed at ONE HUNDRED SIXTEEN MILLION SIX HUNDRED TWENTY THOUSAND PESOS (P116.620M) with a 15-year repayment period inclusive of 3-year grace period and 6% interest rate. DTIACH Given this 21st day of November 2011 relative to its loan application with the Department of Finance-Municipal Development Fund Office (DOF-MDFO) under Mindanao Basic Urban Services Sector Project (MBUSSP) for the construction of municipal hall. (SGD.) JOSE ARNOLD M. TAN, Ph. D. Director II NOTE: (a) This certification is issued in relation to Section 324b of the Local Government Code of 1991 to determine the estimated debt service capacity of the LGU. (b) This certification is not to be construed as an approval of the LGU project(s) and its loan application with the financing institution. (c) This certification is also not to be construed as an approval to the LGU to open an account other than the Government Financial Institutions (LBP and DBP) which is covered by DOF Department Order No. 27-05. In which case, the LGU needs to seek another certification/clearance from DOF for an authority to open an account with other financing institutions. BORROWING AND NET DEBT SERVICE CAPACITY CY 2011 Rosario, Agusan del Sur (2nd Class) (In Thousand Pesos) Year Locally IRA Share Annual Maximum Annual Net Sourced from Regular Debt Amortization Debt Borrowing Income National Income Service of Existing Service Capacity (LSI) Wealth (ARI) Capacity Loan Capacity (2+3+4) (5x20%) (6-7) (8x8.384) (1) (2) (3) (4) (5) (6) (7) (8) (9) 2011 12,540 74,445 34 87,019 17,404 3,494 13,910 116,620 Notes: 1. Annual Regular Income for CY 2011 is determined based on the average locally sourced income for the past 3 years plus the CY 2011 IRA DBM estimate. 2. Maximum Debt Service Capacity is computed in accordance with Sec. 324b of the LGC which is 20% of the Annual Regular Income. 3. Borrowing Capacity is computed based on the annuity factor of 8.384 (6%, 12 yrs.). 4. Annual amortization of existing loans were based from the availed loans from the Department of Finance-Municipal Development Fund Office (DOF-MDFO), Development Bank of the Philippines (DBP) and Philsaga Mining Corporation as certified by Ms. EVELYN M. ROMERO, Municipal Treasurer. EScAID Prepared by: (SGD.) EUGENIA M. ANDAYA Loan Examiner IV Verified by: (SGD.) ALFREDO C. DELGADO Acting Chief, LOANS Noted by: (SGD.) JOSE ARNOLD M. TAN, Ph. D. Director II