City govt. eyes P600M earnings from joint venture with Filinvest

CEBU, Philippines - The Cebu City government expects an additional P600 million in income this year from its share in the Joint Venture Project with Filinvest Land Inc. at the South Road Properties.

Emma Villarete, Acting Assistant City Treasurer, said that Filinvest committed to pay in advance some P600 million representing the share of the city government for the sale of condominium units being constructed in the 40-hectare joint venture project.

There is no actual selling yet, however. Villarete said that Filinvest has conducted pre-selling and estimated that they can earn as much that would bring to P600 million the city’s share for the year.

It will be on top of their yearly installment payment for the 10-hectare lot they bought from the city government where they will build the Il Corso. Filinvest pays over P300 million as installment payment for the lot.

Il Corso is the commercial area of Citta de Mare. There will be over 200 food and beverage and retail shop leasable units fronting the sea. Its target completion is on the first quarter of 2013.

Citta de Mare consists of Amalfi Oasis and Sanremo Oasis which are residential clusters to rise in the 40-hectare joint venture project of FLI and the city government.

From the outright sale the city stands to earn some P1.5 billion for the first three years. They will also earn a 10 percent share from each condominium unit sold. However, if the minimum guaranteed return which is the sale price of the land plus 20 percent is higher than the 10-percent share, the latter shall prevail.

Filinvest estimated to bring the city some P600 million because they targeted to start selling units this year.

Villarete said that they have yet to write to Filinvest to request if they can pay in advance the P600 million within the first quarter.

The P600 million will already be an excess of the budget estimate because during the 2012 Annual Budget preparation, they only estimated to earn P675 million from the sale of government lots.

The P675 million are the actual receivables from SM Prime Holdings, Filinvest, among others.

Meanwhile, the city government posted a P3.7-billion income last year which is lower than the income in 2010 where they earned P4.1 billion.

Of the P3.7 billion, P1.2 billion was from tax revenues, P531 million from non-tax revenues, 1.2 billion from external sources, P676.2 million from sale of government lots and P80.2 million from income from economic enterprises.

Villarete said that their income is expected to start improving this year and next year onwards once they implement the tax mapping and revalidation of real property units. – (FREEMAN)