Labella gets nod to negotiate for pre-payment of SRP loan

CEBU, Philippines —  The Cebu City Council has authorized Mayor Edgardo Labella to negotiate for the pre-payment of the loan covered with Subsidiary Loan Agreement and other relevant documents with the Land Bank of the Philippines (LBP) for the South Road Properties (SRP).

Councilor Raymond Alvin Garcia sponsored a resolution regarding the matter, which the council approved during its regular session on Wednesday.

“As I've said before, in order for us to start the ball rolling so to speak, the first document that the Land Bank needs is really the kaning Council resolution authorizing the mayor to negotiate for the prepayment of the loan,” Garcia said.

As stated in the resolution, the city’s outstanding loan from LBP amounts to JPY2,310,120,000 or around P1.07 billion when converted to Philippine peso as of December 31, 2020.

Garcia said the city has been finding ways to reduce its expenses and one of the ways identified is the prepayment of the SRP loan obligation that would allow the city to generate a net monetary savings of at least P85 million with February 2021 as the target date of prepayment.

“Now, from here, we will now have to get the other requirements such as, if I'm not mistaken, we have to get an endorsement from the Department of Finance, Bangko Sentral ng Pilipinas, etc., before nga moduso na gyud ta og another SB (Supplemental Budget) for the payment of the entire amount,” he added.

Garcia said the city has the capability to pay considering a P371 million from the SB 1 of this year was prepared for the loan payment, and the council can later approve another budget for the additional payments.

The resolution also states that any applicable agreement that will be entered into connection with the said prepayment scheme should pass through the City Council for approval.

It was in 1996 when the city took about P4.65 billion loan with the Overseas Economic Corporation Fund (OECF) and LBP for the SRP. — JMO (FREEMAN)