Osmeña says P6-billion SRP loan will be paid in 4 years

CEBU - With investment proposals pouring in for the South Road Properties, Mayor Tomas Osmeña is optimistic that the city will be able to pay its P6 billion loan for the 300-hectare property in the next three to four years.

Osmeña, who returned to Cebu the other day, yesterday said the city is paying P750 million for its SRP debt —P250 million of which covers the reduction of the actual debt, another P250 million for the interest, and P250 million for the national government.

“You see, we are contributing revenues to the national government. Dili gyud alkansi ang national government nato. We are paying our utang. We can look up with pride,” Osmeña said.

The national government earlier described the SRP as the best Philippine project under Japan’s Official Development Assistance, a category of development aid for developing countries.

So far, the SRP has earned P25 million, which represents the advance payment of Bigfoot Global Solutions for a 25-year lease for two hectares.

But Osmeña said he is expecting to read the draft copy of the complete business proposal of Filinvest Land Inc. before he will leave again for the United States this Sunday.

Filinvest, one of the largest real estate companies in the Philippines, is offering an outright purchase of 10 hectares worth P2 billion. The company also offered to engage in a joint venture with the city in developing 50 hectares of the SRP.

Just recently, the National Power Corporation also expressed interest in purchasing 3,000 square meters at the SRP as a future site of its regional office.

The P3-billion budget for the SRP was made possible through a loan from the Japan Bank for International Cooperation in 1995. The city has 30 years or until 2025 to pay for the loan. Payments are made twice a year in February and August.

And while the original loan is P3 billion, this amount has ballooned to P8 billion because of peso devaluation.

“Is that our fault that the peso devaluates? Not our fault. And yet we are still paying the national government,” Osmeña said.

Records at the City Treasurer’s Office showed that the city government paid a total of P1.56 billion for the loan from 2005 to 2007.

Of the said amount, P678.82 million goes for the payment of the principal while the remaining P885.38 million covers the interest. — Mitchelle L. Palaubsanon/JMO (THE FREEMAN)