Cebu City closes chapter on SRP loan

CEBU, Philippines — It’s final. Cebu City’s loan obligation for the South Road Properties (SRP) is over with the issuance of a certificate of full payment from the Land Bank of the Philippines, allowing the city to save close to P1 billion.

The bank handed the certificate over to Mayor Michael Rama at the Cebu City Hall on Monday, September 19, 2022.

The mayor heaved a sigh of relief.   

“Land Bank, thank you very much for cooperating… and I wish we continue to discuss as there are still some other things that we need to be discussing, actually… But the most important thing that the time has come and it cannot be erased… that document is a testament that this administration really mean business, this administration manifests no sacred cows,” Rama said.

The loan’s final maturity is not until three years as of this writing but Rama insisted the city should pay the remaining balance as soon as it could. He realized that delaying payment would cost the city about P1 million in interest every day.

Rama said the city can use that amount for more useful projects.  

Paying the loan in full is among Rama’s priority in his first 100 days since getting a fresh term as mayor in the May 2022 elections.

“Our journey started in 2015… when he was elected Mayor, he gave me the assignment that it should be concluded within the first 100 days of his administration as he is committed to the people under the 21-gun salute,” said Gerone Castillo, the mayor’s special assistant for fiscal reforms.

On August 23, 2022, the city paid its remaining balance of P759,267,020.82, or a total payment of P904,898,606.27 after paying  its last semi-annual amortization P145,631,585.45.

The last amortization included over P126 million for the principal paid to Japan Bank for International Cooperation (JBIC) with accumulated interest for six months of P11.6 million to JBIC and P6.5 million to LBP, plus P1 million in documentary stamps.

The final payment covered over P753 million for the principal and interest for four days of over P164,000 to JBIC and close to P13,000 to LBP, as shown in breakdown LBP gave the city. – JMO (FREEMAN)