Landbank letter a reminder, not warning, on SRP loan balance

By: Jose Santino S. Bunachita March 03,2016 - 10:19 PM

BO-PK bloc accuses Rama of manipulating situation to pressure approval of SB1

What the Land Bank of the Philippines sent to Cebu City Mayor Michael Rama was a “reminder” and not a demand for the payment of the balance of the South Road Properties (SRP) loan, a bank official said.

Landbank Vice President Elsie Fe Tagupa told Cebu Daily News that based on their records, the Cebu City government has not yet sold half of the 330-hectare SRP.

“The letter was sent as a reminder that if they sell 51 percent (they have to pay the loan balance). It was just a reminder kay nagsige na raba sila’g sell (especially since they’ve been selling),” Tagupa told CDN.

She was referring to a Feb. 29 letter she sent to Rama in which she stated a provision of their subsidiary loan agreement for the SRP.

The provision prohibits the city government from selling more than 51 percent of the 330-hectare SRP while the loan is still in force, unless the proceeds will be used to pay the loan in full.

Tagupa said in the letter that compliance to the provision is “required.” Based on Landbank’s records, though, she said the city government has not yet sold 51 percent of the SRP lots.

She said they’re basing their computation on only 280 hectares of the SRP since the remaining 50 hectares lies in the Talisay City side.

Tagupa said the city only sold 86.6 hectares of the SRP which already includes the 26 hectares sold to the consortium of SM and Ayala and the 19 hectares to Filinvest last year.

She said another 39 hectares are a joint-venture project between the city and Filinvest.

However, Tagupa said their legal department still has to clarify if it’s considered a sale or not.

SRP manager Roberto “Bu” Varquez earlier claimed that the city already sold more than half of the SRP lots.

He said based on their data, the city already sold 135 hectares of the SRP.

Varquez said this is more than half of the 240-hectare SRP.

He said only 240 hectares should be considered since  60 hectares, the so-called Pond A, are still under water.

Rama used the Landbank letter to pressure the City Council, which is dominated by the Bando Osmeña-Pundok Kauswagan (BO-PK), to approve the prepayment of the loan balance which has increased to P2.6 billion.

Yesterday, the executive department submitted a P3.39-billion Supplemental Budget 1 (SB1) for 2016, the bulk of which is for the loan balance payment.

In a telephone conference yesterday, Rama, who was in Manila, told reporters that the payment of the loan balance has become an “obligation” for the city considering the letter from Landbank.

He said though that his submission of a new SB1 for this year doesn’t mean he waived his earlier stand that the council violated laws and regulations when it shelved the SB1 last year.

But Councilor Sisinio Andales said Rama’s submission of a new SB1 should mean that the cases filed against the council are moot.

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TAGS: Cebu, Cebu City, Landbank, Mayor Michael Rama, SB1, SPR loan, SRP

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