CEBU, Philippines - In order to pay the amortization loan balance of P3 billion with the Japan International Cooperation Agency (JICA), the Cebu City Government is considering on applying for a bank loan.
Cebu City Mayor Michael Rama, in a press conference yesterday, said he doesn’t want to elaborate the “reconstructing†plan for the amortization loan but they are eyeing a loan with PNB in order to save on interest rates.
Lawyer Jose Daluz III, the mayor’s executive assistant, said the reconstructing plan has been tackled to address the loan interest rate fluctuation.
Daluz explained that the city pays 11 percent of the amortization loan to the Land Bank of the Philippines, which is the conduit bank for the loan with JICA. A loan with PNB or other banks would mean that the city would only be paying a three-to four percent interest rate.
The 12.315 billion yen or P6.5 billion-loan the city acquired from JICA was for the development of the 300-hectare South Road Properties (SRP).
The city sets aside P150 million to P200 million for the interest to the conduit bank. The amortization loan will be paid up in 2015.
“This will ease us out and remove us from so much unbearable pain. If we will not stop this currency fluctuation, we will end up paying until 2015. We have to do something drastic,†he said earlier.
Also, Rama said he would like to write Department of Finance Secretary Cesar Purisima for the removal of the P50 million annual guarantee fee for the SRP.
Rama earlier said the guarantee fees the city has been paying since 2001 has deprived the constituents of Cebu the basic services supposedly given to them by the city government.
Daluz said that he and former councilor, Joy Pesquera, wrote several times to DOF for the same request but until now it has not been approved.
“We did it many times already requesting DOF to remove the guarantee fees and then reminding them pero nothing happened,†he said.
Meanwhile, Rama said he already spoke with Tristan Las Marias, Filinvest Land Inc (FLI) first vice president, regarding their pending payables amounting to P954.5 million.
The P954.5 million is broken down into P224.4 million as payment for the purchase of Pond F and P730.13 million as payment for shares of the joint venture agreement.
“We had a good and open discussion and optimistic matter. The joint venture will continue to be a venture with parties (FLI and city government) to exercise and perform responsibility of smiling face,†Rama said.
Rama assured FLI, the biggest investor at the SRP, that the city will not file charges against them.
“FLI creates attraction and traffic at SRP. This issue will end. Dili kinahanglan muabot sa kiha-kiha kay bati because we are partners with FLI,†he said adding that FLI will pay next week. —/ATO (FREEMAN)