Wenceslao wants SRP loan buy-out

CEBU, Philippines - Cebu City Councilor Noel Eleuterio Wenceslao wants officials of the Land Bank of the Philippines, city treasurer, and city administrator to appear before the members of the City Council to discuss the proposed buy-out of the city’s loan with the Japan Bank for International Cooperation.

Wenceslao wants the proposal to be discussed in an executive session with the LBP officials, city treasurer Diwa Cuevas, and city administrator Lucille Mercado.

According to Wenceslao, the members of the council want to be apprised of what would be the scenario if the city government gets a loan with the LBP to pay its obligation with JBIC in full.

Wenceslao believes that it would be advantageous to the city government if it settles its obligation with JBIC through a loan from a local bank because the government would no longer be paying the guarantee or commitment fee.

The city government obtained a P4.6 billion loan with JBIC in 1996 for the construction of the South Road Properties. The loan will be due on August but the city government still has an unpaid balance of P2.9 billion.

The city’s loan amortization had been eaten up by the interest and the fluctuations of the foreign exchange rate.

The city has already paid a total of P6.8 billion inclusive of the guarantee or commitment fee amounting to P546, 362, 774.75.

“The difference between the amount paid and the decreased in the principal amount was entirely due to the fluctuations in currency valuation that had greatly affected the guarantee or commitment fee and interest,” Wenceslao said in a resolution. (FREEMAN)