On SRP loan amortization: LBP sets conditions in granting CH plea

CEBU, Philippines - The Land Bank of the Philippines has set several conditions in granting the Cebu City government’s request to defer the payment of P173 million as amortization for the South Road Properties loan until August.

The city government is supposed to pay the amortization on Saturday but has not allocated funds for the purpose, prompting Mayor Michael Rama to request for reprieve.

Elsie Fe Tagupa, vice president of the LBP Cebu Lending Center, said that among the conditions that the bank is requiring the city government is to allow the “tagging and earmarking of the estimated equivalent peso value of the loan amortization due plus charges against existing deposit account maintained with Land Bank Plaza Independencia Branch.”

Despite the conditions, Rama said what is important is that the city will not be declared in default.

“The most important thing that we have achieved is actually nothing to worry anymore… There is nothing to worry, no more default,” Rama told reporters yesterday.

City treasurer Diwa Cuevas said her office has already tagged and earmarked the proceeds of the sale of SRP lots to the existing deposit account including the additional charges or remittances.

“Ang halin sa yuta gi-time man na nato. Ang akong gipang-tag diha mao gyud to ang halin sa yuta,” Cuevas said.

Rama earlier requested the LBP and the Japan International Cooperation Agency, with which the city entered into a subsidiary loan agreement back in March 1996, to allow the city government to defer the amortization.

The city government borrowed Y12,315,000,000 or about P2,832,450,000 from JICA to finance the then South Reclamation Project with LBP serving as the conduit bank.

Rama signified his intention to pay the outstanding balance of the loan in the amount of P2.3 billion. He submitted a supplemental budget last year which included the prepayment of the loan but was not approved by the City Council because it identified as source of fund the sale of the SRP.

Majority of the members of the City Council are opposed to using the SRP sale to fund the supplemental budget because of a pending case in court questioning the validity of the sale.  (FREEMAN)