Cebu City Council Asks Executive Branch To Submit PHP375M Supplemental Budget For SRP Loan Payments

The Cebu City Council has asked the executive department to submit the city’s first supplemental budget (SB) to cover the City’s PHP375-million amortization for the South Road Properties (SRP) loan.

Cebu City Councilor Margarita Osmeña, chairperson of the council’s committee on budget and finance, said the city government has not set aside any funds for this year’s SRP loan amortization under the PHP6.4-billion approved 2016 annual budget.

She said the city will have to pay PHP188 million to the Land Bank of the Philippines (LBP) on Feb. 20 as its amortization on the SRP loan.

Osmeña said the city also needs to pay around the same amount to the state bank on August 20.

She also raised the possible implications if the city will default on its obligations to the LBP.

The LBP was the borrower on record when the Japan International Cooperation Agency (JICA) lent Cebu City 12.315 billion yen in 1995 or about PHP4.65 billion at that time to develop the 300-hectare SRP.

Osmeña said executive branch’s “serious omission” of the payment for SRP loan amortization can only be subject to speculation whether it was deliberate or was a result of negligence.

Cebu City Councilor Noel Wenceslao said the executive branch deliberately did not include the amortization for the SRP in the 2016 budget, as they were hoping that the PHP2.8-billion proposed SB1 in 2015 would be approved.

The bulk of SB1 was supposed to cover the prepayment of the entire PHP2.4-billion loan balance for the SRP.

Wenceslao said the city would no longer have to pay thetwice-a-year amortization if SB1 had been approved, but the council’s majority sat on it. (PNA) LAP/EB/RSM