Filinvest, SM-Ayala consortium complete P16-B payment for SRP lot; money still with Cebu court

By: Delta Dyrecka Letigio August 13,2019 - 07:59 PM


CEBU CITY, Philippines — Cebu City can collect a total of P16.3 billion from the sale of a 45-hectare lot at the South Road Properties (SRP) if the city will open its treasury to accept the payment.

Filinvest and the SM-Ayala Consortium, the companies which purchased the lot in August 2015, informed the 15th City Council through a letter that they have paid the recent installment of P2,455,433,102 to the city, which is also the remaining balance for the sale.

The final payment was in accordance to the Deed of Sale on Installment agreed upon by the companies and the city government in 2015 that the payment should be completed by 2019.

However, the payments were left untouched and consigned to the court after then Mayor Tomas Osmeña, who won in 2016, refused to accept the payments.  (Osmeña lost his reelection bid in the May 2019 polls to Edgardo Labella, then the city’s vice mayor.)

A consignation is a deposit which a debtor makes as payment of the item or goods that he owes, into the hands of a third person, and under the authority of a court of justice.

Labella, who was then the council’s presiding officer when the deal with Filinvest and SM-Ayala consortium was sealed,  already expressed his intention to accept the payment so it can be used to pay the P1.8 billion debt of the city.

The City Council, in their regular session on Tuesday, August 13, 2019, decided to refer the letter to the City Legal Office for its opinion on the matter, especially on how the city can regain the consigned payments for the sale.

Osmeña, during his three-year term,  did not the accept the payments after he questioned the legality of the sale made during the term of former mayor, now Vice Mayor Michael “Mike” Rama.

In June 2019, the city government, with the go signal of the 14th City Council, filed a petition for declaratory relief to void the SRP lot sale, a month before Osmeña stepped down from office.

Upon the assumption of Mayor Edgardo Labella on July 2019, however, the 15th City Council, dominated by allies of the new mayor, decided to withdraw the case so that the city can access the consigned payment of the SRP lot.

The City Legal Office, for its part, is  seeking a renegotiation with Filinvest and the SM-Ayala Consortium regarding the consignment.

City Legal Officer Rey Gealon  said the only way for the city to receive the payment is for the companies to ask the court for a withdrawal of consignment.

The withdrawal of the consignment will indicate the city’s willingness to accept the payment from the purchasers, he said.

“We will explore whatever possibilities for mediation (with the companies) for the best interest of the city,” said Gealon. /elb

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TAGS: Filinvest, Labella wants to use P16B SRP lot sale, SM-Ayala Consortium, SM-Ayala consortium complete P16. B payment for SRP lot, SRP Lot sale

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