Cebu City needs BSP, JICA approval for loan conversion
The Cebu City government cannot convert its loan for the South Road Properties (SRP) from yen to peso just yet.
An official of the Land Bank of the Philippines (LBP) told the Cebu City Council in yesterday’s executive session that there are still some requirements the city needs to meet before it can proceed to converting the loan.
“The city still needs to get approval from the monetary board (of the Bangko Sentral ng Pilipinas) and Japan International Cooperation Agency (JICA) before it can proceed with the loan conversion,” LBP Vice President Elsie Fe Tagupa said.
Tagupa’s statement convinced the council not to pursue discussion of the offers of three local banks that earlier showed interest on the loan conversion.
Aside from LBP, Fernando Lagahit, vice president of the Development Bank of the Philippines (DBP) and Philippine National Bank (PNB) manager Joy Opacu also attended the session.
Open mind
Cebu City Mayor Michael Rama lobbied for the loan conversion last year to enable the city to save hundreds of millions of pesos in interest and foreign exchange losses. Last December, the mayor urged the council to quickly work on the loan conversion by passing a resolution allowing him to negotiate with the banks.
“We shouldn’t conclude that the city can convert the loan soon. But we have an open mind on this. We will start with the first step. At present, it’s still a premature process,” said Councilor Margot Osmeña, who heads the budget and finance committee.
Councilor Sisinio Andales said the mayor’s office should first request the council to approve a resolution to request the BSP’s monetary board and the JICA to allow the loan conversion.
City Accountant Mark Salomon said the mayor is willing to discuss with JICA.
High time
Councilor Noel Wenceslao asked that the representatives of the banks be given 10 minutes to discuss their offers to the council.
But Andales and the others disagreed. “It’s just a waste of time if JICA won’t approve the conversion. It’s premature to hear the offers of the banks until the request is approved,” Andales said.
The DBP agreed that it’s premature to discuss the offers unless there’s a go signal from the BSP and the JICA.
“It’s high time for the city to convert the loan since the peso has strengthened against the dollar and yen,” Lagahit said.
Opacu said they are also willing to take out the loan conversion. “We’ve been studying the loan and we will help you stop the bleeding,” she added.
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