City needs council’s nod to pay SRP loan in full

CEBU, Philippines - Cebu City’s Local Finance Committee said it has to secure authorization from the City Council first before documentary requirements in paying the South Road Properties loan are processed.

Today, the council is expected to deliberate the resolution of Councilor James Anthony Cuenco authorizing Mayor Michael Rama on behalf of the city government to process the pre-termination of the P4.65 billion SRP loan.

“After the resolution that will be approved, we will be working on the documentary requirements nakayang gusto sa mga agencies makahibaw sa decision sa utangan nga mobayad na ‘ta,” said lawyer Jose Daluz III, a member of the city’s Local Finance Committee.

Rama has directed the committee to fast track the compliance of the requirements.

In 1996, the city entered into an agreement with Japan International Cooperation Agency for the Y12.315 billion or around P4.65 billion loan to finance the reclamation of the 300-hectare SRP. As of now, the city still owes JICA over P2.3 billion, which is supposedly settled in 2025.

Apart from the council’s approval of the loan prepayment, other requirements for the committee are certification from the Bureau of Local Government Finance that the transaction is within the city government’s debt servicing limit; justification for the prepayment; and concurrence from the Department of Finance as well as from the Land Bank of the Philippines.

Daluz said the committee has already sent communications to these agencies, but they are asking for the council’s resolution before the city could proceed to other requirements.

The city’s executive department is pushing for the P3.32 billion in its first supplemental budget for the year, bulk of which is for the loan’s prepayment.

According to Daluz, the city government has the right to pre-terminate its loan for the SRP since it is the debtor, but the legislative body should be one with the executive department in convincing the agencies that the city is willing to pre-terminate it.

“Dili ta mo-una og kuha sa mga documentary requirements kay first, dili approval atong gipangayo sa agencies, concurrence lang. We will explain sa council sa benefits that the city would get out of this,” he said.

Daluz said the city has been allotting P500 million every year to pay the loan, which can be stopped through prepayment, and just allocate the amount instead to other basic services.

But council members have mixed reactions on the pre-termination, said Councilor Nendell Hanz Abella, who was with Daluz during yesterday’s regular 888 News Forum at MyTV Studio to answer issues concerning Cebu City Hall.

“What I know, they want to continue the amortization every year. For me, having good fiscal management, naa man ta’y kwarta, so much better to pay the loan,” Abella said, adding that year 2025 is too late to settle the loan. — (FREEMAN)