City to Pay off P3B SRP Debt in Full

Cebu City Mayor Michael Rama said he will pay in full the PHP3 billion remaining balance of the debt incurred for the South Road Properties (SRP).

Rama, in his State of the City Address (Soca) Saturday, said the city will use part of the proceeds from the sale of 45.2 hectares in the SRP.

The city government still needs to pay the Japan International Cooperation Agency (Jica) some PHP3 billion, 20 years after it took out the loan to build the nearly 300-hectare property.

The city conducted the bidding Tuesday for the sale of three SRP lots and received a combined offer of PHP16.76 billion.

A consortium of Ayala Land-Cebu Holdings Inc. and SM Prime Holdings were the lone bidders for the 26-hectare lot with a bid of PHP10.009 billion.

Filinvest Land Inc. was the highest bidder for 19.2 hectares, with a bid of PHP6.758 billion.

Rama said the payment for the balance of the SRP loan will be taken from the 50 percent down payment of about P8 billion which the buyers of the lot will have to give the city once their contracts are awarded.

Rama said the city would no longer have to set aside at least PHP500 million annually for debt servicing once the debt is fully paid.

The city took out a 12.315-billion yen loan in 1995 from Jica to develop the SRP. At that time, the loan’s peso equivalent was PHP4.65 billion.

The loan has an interest rate of 11 percent and will mature in 2025. (PNA) CTB/EB/SSC