No money for SRP in 2016 budget

CEBU, Philippines – Unlike in previous years, Cebu City’s budget for next year does not include appropriation for the amortization for its loan for the South Road Properties (SRP).

Yesterday, the City Council approved P6.4 billion of the proposed P8.9 billion annual budget.

The executive department did not include the amortization in the budget it proposed for 2016 because officials thought the City Council would approve the P2.8 billion Supplemental Budget-1 this year.

In previous years, the city appropriated P500 million for the loan amortization, which it pays every February and August.

“The SB-1 was stalled. The problem now is that we don’t have the amortization for the SRP loan. On February 20, the city should pay P200 million in terms of the interest and about P1.5 million for the doc stamps,” said Councilor Noel Wenceslao during the council’s special session yesterday.

The council has suspended deliberations on the proposed SB-1 because of the case filed by lawyer Romulo Torres, which questioned the sale of lots at the SRP. The city would have wanted to use the earnings to fund the items in SB-1. The court is yet to render a final ruling on the case.

The biggest bulk of the proposed SB-1 is the P2.4 billion prepayment for the outstanding balance of the SRP loan from the Japan International Cooperation Agency (JICA).

Wenceslao said the city would have to pay at least P4 million per day as penalty if it cannot pay the amortization on February 20.

He said the city could save P524 million if it could prepay the outstanding balance before the year ends.

Wenceslao proposed that the council “insert” the amount for the purpose since it is “statutory obligation” but Councilor Margarita Osmeña, head of the council’s committee on budget and finance, said it is too late to do so since the budget ordinance has already been drafted.

Osmeña said the concern was never raised during the budget deliberations the past two months.

“That is a very legitimate and valid concern. To suggest now that we need to adjust the budget, it’s done. That is why we have series of budget hearings for two months and this should have been brought up then. It was never brought up. This is not to buck up, but we should have been responsible, that should have been brought up to the proper time and not today,” she said.

She said the executive department can propose a Supplemental Budget next year for this purpose.

“For the sake of argument, the SB can be done overnight. They can find a source of fund for it. The city has so much continuing appropriation which can be used,” she said.

She said the executive department also has not completed the documentary requirements needed to prepay the outstanding balance for the SRP loan.

In 1996, the city entered into an agreement with JICA for the Y12.315 billion or around P4.65 billion loan to finance the reclamation of what is now known as the South Road Properties. As of now, the city still owes JICA over P2.4 billion and is due in 2025.  — Jean Marvette A. Demecillo/JMO (FREEMAN)