Osmeña: Paying SRP loan is not justification for squandering city funds
CEBU CITY, Philippines — Former Cebu City Mayor Tomas Osmeña took a jab at the plans of incumbent Mayor Michael Rama on paying in full the remaining balance of the South Road Properties (SRP) loan.
The city took a P4.65 billion loan in 1995 from the Japan International Cooperation Agency (Jica) for the development of the SRP.
He said in an interview with reporters on December 8, 2021, that even if the current administration paid the balance, it cannot justify the “squandered billions” by the city government.
“They cannot (pay the balance). In the first place, they only pay 2.7 percent. The justification of squandering billions of pesos is to pay a small loan,” said Osmeña.
Osmeña has always criticized Rama for having sold a 45-hectare property to the SM Ayala Consortium in 2015 for P16 billion.
The former mayor refused to use the proceeds during his term from 2016 to 2019 because he believes the sale was illegal, although the court has already ruled otherwise.
However, in 2019, late Mayor Edgardo Labella had decided to use the funds to finance some of the city’s projects. The SRP proceeds were also the source of funds during the pandemic.
Labella had then promised to pay the remaining loan of the SRP funds, now estimated around P1.2 billion.
The local finance committee had sought the advice of the Land Bank of the Philippines (LBP) on a payment scheme for the remaining balance, but that has yet to be realized.
In the recent budget hearing for the proposed P8.9 billion budget for 2022, the City Treasurer’s Office revealed that the entire SRP sale proceeds have been fully allocated. This means, that proceeds have dried up.
Still, Mayor Rama is determined to pay the remaining balance of the loan, as promised by the late mayor.
“Let them be..But the most important thing, that (loan payment) is the call I have been making a stand all the time.”
“That if I become a mayor, we will emancipate the city from this quagmire of debt,” said Rama.
The incumbent mayor said his administration will find a way to fulfill the promise of Labella to make the city debt-free before the next elections. /rcg
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