Cebu City assures Landbank: We will pay SRP loan
CEBU CITY, Philippines — The Cebu City government promised the Land Bank of the Philippines (LBP) that the city would pay off the P1.7 billion standing balance left of its P4.65 billion loan from the Japan International Cooperation Agency (Jica) for the development of the South Road Properties (SRP) in 1995.
Lawyer Jerone Castillo, Acting city treasurer, said that the LBP conducted a courtesy call to Mayor Edgardo Labella and discussed the remaining balance of the loan that the city incurred 24 years ago and which would be payable until 2025.
The previous administration of former mayor, Tomas Osmeña, had put off paying the total remaining balance then of P2 billion because Osmeña wanted to prioritize the public and social welfare services of the city.
In previous statements, Mayor Labella said that he would want to finish paying the loan so the city would become debt-free and in turn, allowing the city to use its future earnings for public services.
He said he planned to use the P8.3 billion initial proceeds from the sale of 45-hectare SRP lot to the SM-Ayala Consortium and Filinvest to pay the loan of the city.
Castillo said that the LBP would be offering payment plans to the mayor so he could study these and choose a perfect payment plan that would be advantageous to the city.
“The money is not the issue. What we need is to get clearances. Even in the previous administrations, there were already intents to pay the loan but we cannot pay it without the requirements,” said Castillo.
Castillo said that they are now working on getting these clearances, including the approval of the Monetary Board.
He said the previous administration already have some of the requirements, but they need to verify if these requirements can still be used in this new attempt to pay off the remaining balance of the loan.
“What is the requirement of the bank and of the BSP (Banko Sentral ng Pilipinas), we will have to follow,” said Castillo.
The next amortization of the SRP loan will be on August 20. The bi-yearly payment of the loan occurs every February 20 and August 20.
Last February 20, the city paid P182 million for the SRP loan.
Castillo said they were hoping to pay off the rest of the loan by August 20, but they would have to wait for the payment options the LBP would present, which would be studied by the finance departments.
“Assuming we pay the loan, and pinakanindot nga plano atong kuhaon (we will get the best plan),” said Castillo.
Castillo said that if the city would successfully pay off its loan, the city would be debt free, increasing the value of its assets, and allowing the city to provide more services to its constituents./dbs
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