Council authorizes Rama to negotiate for SRP loan balance

SRP File Photo

The Cebu City Council authorized Mayor Michael Rama to negotiate with the Land Bank of the Philippines (LBP) to pre-terminate the South Road Properties (SRP) loan.

The city can save over P139 million a year if it settles the P2.44 billion loan balance, said the resolution of Councilor James Anthony Cuenco, a Rama ally.

“We have to initiate this. It doesn’t say that the council resolution should come last. We can start the ball rolling by saying that we already want the loan to be paid,” Cuenco said.

Last month’s sale of two SRP lots ensured P8.375 billion for Cebu city  from  the winning bids of developers Ayala Land, Filinvest Land and SM Prime Holdings.

Rama welcomed the council’s concurrence.

READ: Cebu City will be debt-free | Council needed to settle SRP P2.4B loan balance

The council’s committee on budget and finance and the executive department’s local finance committee will meet today to discuss a proposed P3.32 billion first supplemental budget (SB1).

Before approval, Councilor Sisinio Andales voiced reservations on the measure on authorizing the mayor to negotiate with Land Bank.

He said it was  “premature” since the council has yet to approve the SB1 which covers the payment for the SRP loan’s balance.

But after a recess, the council agreed to authorize the mayor to negotiate the prepayment so the city can work on other documentary requirements for the loan.

City Hall lawyer Jose Daluz III earlier said the city needs the Japan International Cooperation Agency (JICA) to waive the penalty for the pre-termination of the loan which matures in 2025.

The city will also need concurrence from the Department of Finance (DOF), Bureau of Local Government Finance (BLGF), LBP and the Bangko Sentral ng Pilipinas (BSP).