Mayor Rama Gets Green Light to Pay Off P2.4B SRP Loan

The Cebu City Council has passed a resolution authorizing Mayor Michael Rama to negotiate for the pre-payment of the PHP2.4-billion balance for the South Road Properties (SRP) loan.

Rama earlier said he intends to use the PHP8 billion downpayment of three big property developers for the sale of land at the SRP.

The Cebu City Accounting Office said the pre-apyment of the loan balance would save the city government more than PHP540 million for the next 10 years or PHP54 million annually.

The city contracted the loan of 12.315 billion yen with the Japan International Cooperation Agency (JICA) in 1995.

The loan, which was equivalent to PHP4.65 billion in 1995, is payable for 30 years or until 2025.

The city pays about PHP500 million a year for both the principal and interest of the loan.

Cebu City Councilor James Cuenco, author of the resolution, said the city will also no longer have the burden of paying for currency fluctuations with the pre-payment of the loan.

The accounting office earlier said the city will be saving at least PHP1.2 billion from foreign exchange losses or PHP120 million annually for the next 10 years.

The resolution authorizes Rama to negotiate with the Land Bank of the Philippines (LBP), the conduit of the loan. (PNA) CTB/EB/SGP