P2.8B SB-1 still floating: Council prefers finality of ruling

CEBU, Philippines - The Bando Osmeña Pundok Kauswagan (BOPK) – dominated Cebu City Council has stood firm it will not tackle the proposed P2.8 billion Supplemental Budget – 1 until the decision of the court affirming the validity of the sale of lots at the South Road Properties (SRP) becomes final.

The city government intends to source the funds for SB-1 from the earning from the sale.

Earlier, the Regional Trial Court dismissed the case filed by lawyer Romulo Torres, which questioned the sale of 45.2 hectares at the SRP but in a 9-4 vote, the Council decided it should not use the money yet.

“It is still pending. We cannot discuss SB-1 yet. We want the case terminated. It’s premature to discuss until the court issue an entry of finality of judgment. That is fundamental,” said Councilor Sisinio Andales.

Aside from Andales, the other BOPK councilors who voted against the discussion of SB-1 were Eugenio Gabuya, Margarita Osmeña, Alvin Dizon, Lea Japson, Roberto Cabarrubias, and Alvin Arcilla.

Councilors Nendell Hanz Abella, Richard Osmeña, David Tumulak, and Mary Ann de los Santos were not present in yesterday’s session.

The minority bloc members who have pushed for the discussion are Wenceslao, Gerardo Carillo, James Anthony Cuenco, and ex-officio member Phillip Zafra.

Carillo said, “Mr. Torres’ argument has no basis and has no leg to stand on, as the order of the court. And the court affirmed the legality and validity of the resolution that we passed. There is no more hindrance to suspend the discussion,” Carillo said.

Mayor Michael Rama was not surprised by yesterday’s outcome, saying the majority block is “more politically stubborn” and is “seemingly stretching credulity too much.”

“We don’t know what is their so-called game plan. No matter what is in it, there is such thing as general welfare… cannot be just choked about. The general welfare cannot be taken with mockery. The general welfare cannot be displayed with travesty of justice,” he said.

Doubt cleared

During yesterday’s regular session, Councilor Noel Eleuterio Wenceslao of the minority block said the council needs to lift the deferment of the additional budget since it contains the important item amounting to P2.4 billion for the prepayment of the SRP loan.

“In my understanding Mr. Chairman, the dismissal of the case would certainly eradicate the doubt with respect to the legality of SRP proceeds as a source of SB-1, which this August Body is cautious about,” Wenceslao said.

Wenceslao said the prepayment of the SRP loan is beneficial to the city, considering that the city can do away with the payment of the balance of the loan.

He said the city’s outstanding balance of the principal loan in peso amounts to P2.298 billion and the total payment, if paid until maturity, is P2.86 billion.

If it is paid within the month, the city could pay only P2.33 billion which means the city could save over P524.3 million excluding the devaluation cost since the city has “suffered” a forex loss of P902.3 million since the commencement of the loan in 1996.

“Clearly, the city can save. On the contrary, if this pre-payment will not be pushed through, the City repeatedly suffers Forex losses,” Wenceslao said.

Wenceslao also pointed out that the loan’s interest payment is already due. In the annual budget this year, the city approved P112.4 million for the interest but the actual interest expense paid last February to August 20 was P115.4 million.

Wenceslao said the additional funding has been requested and incorporated in the SB-1 in anticipation of the fluctuation of yen values.

He said the city should push through with the payment as the Banko Sentral Ng Pilipinas has approved the city’s proposed full prepayment of the outstanding balance, as well as the accrued interest, adding, it required the passage of SB-1, which contains the amount for the prepayment of the loan.

Other items containing the SB-1 are the P77 million productivity enhancement incentives of the employees and the P87 million garbage collection and tipping fee, among others.

Torres asked the court to stop the city from spending the P8.35 billion proceeds from the SRP sale, alleging that the disposition of the lot was questionable.

The court, however, dismissed the case, saying the council’s resolution that authorized Rama to sale the lot is valid. — /JMO (FREEMAN)