Rama to pursue loan to settle SRP debt

August 19,2014 - 09:13 AM

Cebu City Mayor Michael Rama will go ahead with his plan to take out a new loan to buy out the city’s loan balance with the Japan International Cooperation Agency (JICA) for the South Road Properties.

Rama said this would unburden Cebu City of the high interest charges on the existing loan which is paid through the Land Bank of the Philippines.

“That (availment of a new loan) will have to be pursued. Joy Pesquera keeps reminding me about that,” he said during a press conference.

Pesquera, a lawyer and former city councilor, is the mayor’s longtime girlfriend who currently advises him on various government matters.

Rama said the proceeds of any new sales of SRP lots will be spent on the city’s needs.

The City Council approved last Wednesday a resolution authorizing Rama to make new SRP lot sales.


The mayor said he is considering the disposal of lot no. 7, 8 and 17 measuring 45 hectares at a floor price of P20,000 per square meters.

Four allies of former mayor Tomas Osmeña–Councilors Gerardo Carillo, Richard Osmeña, Roberto Cabarrubias and Noel Wenceslao–voted for the passage of the resolution despite the opposition of their colleagues in the Bando Osmeña-Pundok Kauswagan (BO-PK).

Carillo said the sales of the SRP lots would earn the city about P12 billion of which a portion can be spent to pay off the P3 billion balance of the city’s loan with JICA.

He said if funding is available, there is no need for the city to avail of a new loan with the Land Bank.

Osmeña said in a separate interview that Rama was being dishonest to Cebuanos about the SRP loan.


He denied that the city is paying 11 percent interest for its SRP loan. He said the interest was 5.7 percent of which 2.7 percent goes to JICA while two percent goes to the Land Bank for service charges.

“Another one percent goes to the national government through the Department of Finance which acted as guarantor of the city’s loan,” Osmeña said.

He disagreed with the plan to secure another loan to pay off the city’s JICA loan, saying it was unwise.

Osmeña said while it possible for the mayor to secure a low interest loan, the payment term would also be shorter than the city’s JICA loan which is payable until 2025.

Public bidding

“If you get another loan that has low interest charge, that will have to be a short-term loan. Monthly payment will even be more,” the former congressman said.

Osmeña said that if new lot sales are to be made, it should be made at five hectares per year and through an unsolicited proposal rather than a public bidding.

“I don’t want to be arguing point by point, said Mayor Rama.

“Owning land is good but we already need money. What we need is conversion of land that will redown to the benefits of Cebuanos and generate employment,” Rama said.

Rama said he didn’t want to be “arguing with someone who used to be my mentor”, referring to Osmeña.

He insisted that public bidding was the best mode of disposal as authorized in the Local Government Code for public land.

Rama clarified that he didn’t dictate or coerce councilors to passing the SRP resolution.

In fact, he said he wanted to ask for a brief of the resolution because he was still inthe United STates on vacation when it was drafted.

Related Stories:

It’s official: Rama can now sell SRP lots 

Rama gets green light to sell portions of SRP

Rama says SRP greenlight is a ‘victory for Cebu City’


Subscribe to our regional newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.
Read Next

Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.

TAGS: Rama, sale, SRP, SRP Resolution, SRP Sale

Subscribe to our regional newsletter

By providing an email address. I agree to the Terms of Use and
acknowledge that I have read the Privacy Policy.

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.