Cebu City determined to pay off SRP loan before 2022

By: Delta Dyrecka Letigio February 08,2020 - 03:54 PM

Cebu City Acting Treasurer Jerone Castillo | CDN file

CEBU CITY, Philippines — The Cebu City government is determined to pay off before the end of Mayor Edgardo Labella’s term the 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, the mayor’s appointed city treasurer, said that they were waiting for a new payment term from the Landbank of the Philippines (LBP) to pay off the P1.7 billion balance of the SRP loan.

In building the SRP, the city got a loan of 12.315 billion yen (roughly P4.65 billion) in 1995 and has since paid more than P6 billion including the interest rate of the 1.5 percent.

In 2018, the city has incurred P1 billion net foreign exchange loss after 22 years since the inception of the loan because the amount has drastically increased through the years due to differences in foreign exchange rates.

For this reason, Castillo said the mayor wants to pay off the loan entirely to reduce any more to foreign exchange.

There are three ways the city can choose to pay off the load: in one-time payment, in a new installment plan until 2022, or installment plan until 2021.

The details of these plans have not yet been revealed by the LBP, but they are hoping that before the end of the year, the new payment plan has already been set in place.

“The payment plan will have to be scrutinized first by the mayor, so he can decide what is best for the city. Also, we want to give ample time for the City Council to scrutinize the payment plan,” said Castillo.

The city will still pay the amortization of the SRP loan this February 20, 2020, which is the current payment plan. The amortization is scheduled every February 20 and August 20 of the year.

Read more: Cebu City assures Landbank: We will pay SRP loan

The city will pay approximately P200 million, the funds will be taken from the 2020 annual budget.

Castillo is hoping that before the next amortization on August 20, 2020, the LBP could already present the new payment plans for the city to peruse and scrutinize.

He said the payment of the loan was a priority of Labella so the city would no longer have liabilities and could focus on improving its social services./dbs

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TAGS: Castillo, Cebu City, Japan International Cooperation Agency, JICA, Labella, Landbank, South Road Properties, SRP

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