City council approves P142.5M payment for SRP loan interests

The city council yesterday approved the P142.5-million Supplemental Budget No. 3, which was exclusively for interest payment of the city government's loan for the establishment of the 295-hectare South Road Properties.

City administrator Francisco "Bimbo" Fernandez said the interest payment for the SRP loan-computed on the foreign exchange rate of P54 to a dollar-would be taken from the city's unappropriated general funds.

The city would pay the money on August 18 to the Land Bank of the Philippines, which served as the conduit of the loan from the Japan Bank for International Cooperation.

The JBIC had granted the city the privilege to pay only the 5-percent interest of the loan through the first 10 years out of the 30-year loan term.

SRP manager Nigel Paul Villarete, also the city planning and development officer, said the city started paying last year its loan and interest payment dues, which fall every February and August.

In February last year, the city made an advance payment of P267 million, then it paid LBP another P150.2 million for February and P300 million for August, 2005.

The city obtained the loan through LBP, which on August 30, 1995 entered a loan agreement with the then Overseas Economic Cooperation Fund, now known as JBIC, for the construction of the SRP.

The LBP granted "a guarantee for the loan, to be executed by the Republic of the Philippines as the guarantor."

In 1996, the city got its first tranche of the loan, amounting to 12.315 billion yen, and later on the second loan, amounting to 1.280 billion yen, to pay for the accrued interest of the first loan.

Based on the current repayment schedule, the total loan amortization until 2025 has been estimated to reach P10.16-billion, inclusive of the 2-percent interest and the 1-percent guarantee fee for the Department of Finance.

These figures however would vary depending on currency fluctuations. - Garry B. Lao