Osmeña told: Pay up P2 billion SRP loan
Jean Marvette A. Demecillo (The Freeman) - August 19, 2018 - 12:00am

CEBU, Philippines —  An opposition councilor is asking Cebu City Mayor Tomas Osmeña to pay the P2 billion outstanding balance of the city government from its loan for the South Reclamation Project to prevent further losses due to fluctuating foreign exchange rate.


The request was made by Councilor Jose Daluz III through a privilege speech last week.

 “Sometime in 2014, we already moved to convert our loan from yen to peso because when we pay our loan, as what I’ve understand, we buy dollar first to pay our loan. And dollar, we buy yen. That’s how we pay our loan. The prejudice there is that the dollar is fluctuating. It’s not just that, it’s going up since 2014, it was 44. Now it’s 54 or 55,” Daluz said.

In 1996, the city has incurred 12,315,000,000 yen loan or about P2.83 billion for the reclamation of the now known as the South Road Properties (SRP). As of this year, the city has already paid more or less P6 billion to its lender, Land Bank of the Philippines and Overseas Economic Cooperation Fund. The remaining P2 billion is due in 2025 yet.

The City Council has scheduled an executive session on September 4 to discuss the possibility of paying the full amount of the remaining balance. 

The City Council has invited the Office of the Mayor, City Administrator’s Office, City Treasurer’s Office, City Budget Office, City Accounting Office, and LBP officials to attend the executive session.

According to Daluz, if the city will not pay up it will further incur losses due to unstable foreign exchange rate.

“I think it’s time that we have to remind our mayor to consider converting, if not, we have to pay. I think we have the money to pay P2 billion. Or, we can have a P2 billion loan from any bank. That’s easy for Cebu City because our credit is very high and then we pay our loan,” Daluz said.

The city government pays its amortization to LBP on February 20 and August 20 of every year. But Osmeña said there is no need to settle the outstanding balance of the loan for now.

“It’s not important as of this time because the interest rates are very low. What we have to do is recover our resources and then we can pay off that loan,” he told reporters.

The mayor said he has to recover the 45 hectares that the giant developers allegedly “stole” from the city government. He said the city government will pay off the loan in full once it recovered the 45-hectares sold earlier by then mayor Michael Rama.

Osmeña said the city can sell the property at P51 billion, way up the P16 billion earned by his predecessor.

 “Akong bawion ang yuta nga ilang gikawat. SRP is worth P1 billion a hectare. Give us the 45-hectare and you will see what we can do. But right now, we can’t stop the services of the people because they tied up our hands. That’s why they put up the pressure to pay off the loan,” he said.

Osmeña said the city government has over P12 billion cash from the buyers of the 45-hectare property but he will not use. He said using the money would be tantamount to agreeing to the ‘illegal’ sale.

“We want COA to approve or disapprove the sale because COA does not fall the court of appeals or RTC. Whatever the decision of COA, we’ll go directly to Supreme Court,” he said.

He already sent a communication to COA in September 2017 but he has not received any response until now.-—  FPL (FREEMAN)

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