CEBU CITY, Aug. 19 (PNA) — Mayor Michael Rama’s plan to pay in full the PhP2.4-billion remaining balance of the loan for the South Road Properties (SRP) has gained support.
The amount is already included in the city’s proposed PhP3.32-billion first supplemental budget (SB1) this year.
SB 1 is on top of the city’s PhP13.4-billion annual budget for this year.
The 12.315-billion yen-denominated SRP loan, then equivalent to PhP4.65 billion, was contracted by the city government with the Japan International Cooperation Agency (Jica) in 1995 and is payable until 2025.
Earlier, Rama said the city will save at least PhP500 million in interest payments if the loan is paid in full.
The local conduit bank is the Land Bank of the Philippines (LBP).
Cebu City Councilors Margarita Osmena and Sisinio Andales said they support the move to pay the loan as long as all the requirements are complied.
LBP Vice President Elsie Fe Tagupa earlier said the loan pre-payment needs the approval of the Bangko Sentral ng Pilipinas (BSP), as provided for under the Monetary Board’s approval of LBP’s loan to Jica.
Tagupa said the LBP is the borrower on record of the foreign loan granted by Jica for the development of the 300-hectare SRP.
Tagupa also said the pre-payment of the loan needs the approval of the LBP head office and the concurrence of the Bureau of Local Government Finance (BLGF).
Tagupa said the city will also have to pay a pretermination fee of PhP47 million to the LBP. (PNA)