CEBU, Philippines - The Cebu City government has formally asked the Japan International Cooperation Agency to give its written concurrence on the prepayment of the remaining P2.4 billion loan that was used in the South Reclamation Project.
The request was made even if the City Council has yet to approve P2.8 billion Supplemental Budget-1, the bulk of which will be used for the prepayment of the loan.
In a letter dated October 12, Mayor Michael Rama said the concurrence of JICA would help realize his vision to have a debt-free city, as announced in his State of the City Address last July.
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 P2.3 billion and is due in 2025.
“As it stands, the Cebu City government earmarks more than half a billion pesos every year for the payment of the outstanding loan balance and its interest. With the prepayment of the loan, the Cebu City government will have adequate opportunity to allocate the annual amortization to other basic services urgently needed by the constituency of the City of Cebu and likewise, save on billions of pesos worth of financial interest,” read Rama’s letter to the chief representative of JICA through Mae Catibog, technical staff.
The letter was transmitted yesterday to the JICA-Philippines office located in Makati City.
The concurrence of JICA is one of the documentary requirements that the city needs to comply, according to the Land Bank of the Philippines. The LBP is the borrower on record for the SRP loan.
Apart from the concurrence of JICA, 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 to the Monetary Board; concurrence from the Department of Finance as well as from the Land Bank of the Philippines; and the concurrence of the City Council.
As of now, the city has secured BLGF’s and DOF’s concurrence, and verbal approval from the Monetary Board. It lacks the concurrence of JICA and the approval of the Supplemental Budget-1, which contains the amount for the prepayment.
The City Council has deferred the approval of the P2.8 billion Supplemental Budget-1 because of a pending case filed by a taxpayer seeking to bar the city government from using the proceed from the sale of the SRP lots.
Romulo Torres, in his capacity as a taxpayer, sued the members of the City Council, to stop it from using the proceeds from the sale of the lots.
In August, the city has collected over P8.3 billion from the sale of a 45.2-hectare area at the SRP. Torres contended that the resolution passed by the City Council authorizing Rama to dispose of the property at the SRP has violated City Ordinance 2332.
The ordinance prescribed the manner by which SRP lots can be disposed of. Based on the ordinance the SRP lots can be sold only through solicited proposal and not through public bidding. (FREEMAN)