Council oks full payment

CEBU, Philippines — The Cebu City Council has given Mayor Michael Rama the go signal to pay in full the remaining P960 million balance of the P4.65 billion loan the city made to reclaim the South Road Properties (SRP) two decades ago.

The Council gave its go signal by approving a resolution filed by Councilor Noel Wenceslao, chairman of the Council’s Committee on Budget and Finance.

A Council nod is one of the requirements for the loan payment.

“It will be advantageous to the city if we pay in advance,” Wenceslao said, as the city will continue to pay millions in interest and other charges if the loan stands.

The Japan International Cooperation Agency (JICA) that granted the loan in 1995 has charged an interest of four percent but there are other charges that reportedly bring the interest up to 10 or 11 percent.

In 2015, when he was also the city mayor, Rama wanted to pay the remaining balance in full especially that most of the documentary requirements have already been complied with. He has instructed Atty.

Jerone Castillo, the mayor’s special assistant for financial matters, to work on the other requirements.

Castillo said they are now waiting for the statement of full compliance from the Bureau of Local Government Finance (BLGF).

The city targets to make the payment on August 19, 2022.

Shortly before the COVID-19 pandemic hit the Philippines in March 2020, the city government also planned on paying the remaining balance in full. The mayor at that point was the late Edgardo Labella. He had just won the elections months prior.

Castillo who was then city treasurer said the city had asked the Land Bank of the Philippines (LBP) for options on “the best way” to settle the remaining balance of the loan with the Overseas Economic Corporation Fund (OECF) and LBP.

The LBP gave Labella three options on how to go about paying the rest of the loan: to complete the full term of the loan, to terminate it within his term, or through a one-time payment.

Labella passed away in November 2021, which prompted Rama to assume the mayorship. He was vice mayor at that point. In May 2022, Rama won a fresh term as mayor.

Since 1996, the city has been paying amortization in the amount of P500 million every year for the loan. The city government is required to pay twice a year: on February 20 and August 20. — JMO (FREEMAN)