SRP checks in time deposit to earn P9 million a month

The bulk of the down payment for two South Road Properties (SRP) lots has been placed in a time deposit account while the balance was placed in City Hall’s general fund.

Mayor Michael Rama received checks amounting to P6.5 billion, not P6.7 billion as reported earlier, from winning bidders SM-Ayala and Filinvest Land.

City treasurer Diwa Cuevas said P5.7 billion was placed in a 31-day time deposit with BDO Unibank while about P800 million was placed in the city government’s general fund.

She did not show a bank receipt for the time deposit to the media.

Cuevas said City Hall will earn about P9 million in interest after one month based on an annual interest rate of 1.875 percent.

The city government also placed the P1.8-billion (not P1.6 billion) bid bond that it received during the bidding on June 30 and earned P1.4 million after a month.

“Of the P1.8 billion bid bond we deposited (time deposit) in Land Bank, we already earned P1.4 million as interest in one month,” Cuevas said.

She said city officials have agreed not to spend the money immediately.

If there’s no need for the money after a month, it would be invested again in a time deposit account, she added.

Possession Lawyer Jose Daluz III, who heads the Technical Working Group (TWG) of the city’s Committee on Awards, said the city government and the winning bidders have signed the deed of installment, which requires the developers to pay the balance of their bid amounts in three years.

After paying the 50-percent down payment, the SM-Ayala consortium still has to pay about P5 billion for the 26-hectare Calungsod templete lot while Filinvest needs to pay about P3.4 billion for a 19-hectare lot adjacent to its ongoing development.

Signing of the deed of installment also means Filinvest can take possession of the property.

“For the 19 hectares, it is turned over immediately because they have to construct within one year from the turnover,” Daluz said.

The SM-Ayala consortium can take possession of the Calungsod lot only in March 2016 based on the terms of reference for the bidding.

The property will still be used for the International Eucharistic Congress in January next year.

Daluz said the city government would have started earning interest from the SRP down payment last week had the city council not passed on Aug. 5 a resolution deferring the sale of the SRP lots.

“That’s why there was damage. If the sale (and payment) wasn’t stalled, the interest would have already started.

There was really damage done by the flip-flopping of the council,” Daluz said.

He was among the city officials who accompanied Mayor Rama to Manila to collect the down payment from the three developers, who are all Manila-based.

Daluz said the executive department will pursue the filing of a case against those who voted in favor of the resolution for causing injury to the city.

DEED OF SALE
A deed of sale will be signed after the developers complete the payment for the lots in 2018.

This is the document that needs approval by the city council, Daluz said.

Meanwhile, some councilors allied with the Bando Osmeña – Pundok Kauswagan (BOPK) welcomed the payment.

Councilor Sisinio Andales said he hoped the money will be spent wisely. He assured the council will not unnecessarily block any supplemental budget that might be submitted by the executive as long as it’s properly documented and defended.

For her part, councilor Margarita Osmena said she hoped Mayor Rama would be true to his word about including their priorities in the 2016 annual budget. Her prorities include the implementation of an ordinance for mandatory breast cancer screening in the 80 barangays and some housing projects.

“Of course, we’re happy. We didn’t say that we don’t like for the payment to be made,” she said.

Mayor Rama has asked city councilors to submit a list of their priorities for inclusion in next year’s budget. He will call for a meeting next week to discuss this.