EVEN with a reenacted budget for this year, Cebu City managed to pay P240.3 million for its South Road Properties (SRP) loan amortization.
Cebu City Acting Mayor Margot Osmeña said the amount represents the amortization due last February for this year.
Even though Land Bank of the Philippines (LBP) did not send the billing to the city government, Osmeña decided to just write the bank and told them to debit the city’s account payment for SRP loan.
“We have debited it last week. I was informed that if the penalty starts, we would save penalties if we pay (now). Anyway we will have to pay,” she said.
Osmeña said even if it was due four months ago, there was no penalty being charged to the city government. The next amortization will be in August this year.
Since the city doesn’t have an approved annual budget yet, the city government used the reenacted budget of last year to pay for the amortization.
Osmeña said they have informal talks with LBP regarding the interest on the commitment or guarantee fee that the bank imposed to the actual transaction.
“The interest is only about two percent and a half. There’s the Philippine government and there is the Land Bank so it goes out as five percent and a half. Land Bank is willing to negotiate on what they are imposing whether it’s commitment or guarantee fee. Two percent, that’s big,” she said.