City ‘to settle’ SRP debt in full

CEBU, Philippines —  Saying resources are available, the Cebu City government is planning to settle at once the remaining balance of the loan it incurred to reclaim the 300-hectare South Road Properties two decades ago.

City Treasurer Atty. Jerone Castillo said that the city has asked Land Bank of the Philippines (LBP) for options on “the best way” to settle the remaining P1.7 billion balance of the Y12.3 billion or about P4.65 billion loan with the Overseas Economic Corporation Fund (OECF) and LBP.

The LBP has given Labella three options on how to go about paying the rest of the loan: to complete the full term of the loan, to terminate it within his term, or a one-time payment.

Since 1996, the city has been paying amortization in the amount of P500 million every year. The city government is required to pay twice a year: on February 20 and August 20.

For this month, Castillo said, the city will be paying amortization of about P200 million.

“The regular amortization by February, we have to pay it, but hopefully before the end of August, we can already have the working details on how to pre-pay the full amount if the mayor so desires,” he said.

He said that the Mayor Edgardo Labella wants to the remaining balance fully paid already. Labella, it may be recalled, first made public this intention as part of his administration’s 10-point agenda during his inaugural speech last July 2.

Castillo said the city has initiated the process of processing the loan, but added that there are requirements to comply with.

“We cannot just pay it. We have to secure requirements from the DOF (Department of Finance), from the Bangko Sentral, and from the Monetary Board. And we were told by Land Bank that the previous requirements during the time of (former mayor) Mike Rama, dili na namo pwede gamiton, so we have to redo all the requirements,” said Castillo.

Under the loan agreement, the remaining balance should be settled by 2025.

Castillo said the local finance body already requested to initiate the process so that the mayor can be briefed once the requirements are processed. The City Council’s authority will then be sought after it has been duly informed of the balance and the possible savings the city will derive from the move.

“We have preliminary data from Land Bank. If we pre-pay the loan, we can save a lot,” the city treasurer said.

“Hopefully, we can have the payment options done, the requirement done, so that the mayor can really choose the what is the best direction, and we will give ample time to the sanggunian to evaluate it,” Castillo said.

Castillo also said the city has the enough funds to pay the loan, only that the “modality and the terms of reference remain uncertain because they have yet to be presented.”

He added that once the city pays off the loan, the money can be used for other means such as for social services.  JMD (FREEMAN)