City receives bill for 7th payment for SRP loan amounting to P377M

CEBU City Hall received last week the bill for its seventh payment for the South Road Properties (SRP) loan amounting to some P377.4 million, which city officials said they can settle without any problem.

City Administrator Francisco Fernandez said yesterday that the City has more than enough funds to make its first payment for 2010, which is due on Feb. 20.

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Aside from the P677 million paid by SM Prime Holdings Inc. for a 30-hectare lot it bought last month, the City is also expecting Filinvest Land Inc.’s (FLI) second payment later this month, amounting to some P270 million.

Based on the records of the City Treasurer’s Office (CTO) and documents on the payment schedule of SM Prime and FLI, the payments of both developers will be more than enough to cover the loan obligations of the City until 2015.

Because of this, the mayor said earlier that the City does not need to sell any more SRP lots just to meet its loan obligations.

For 2010 alone, the City is expected to pay P693.99 million to the Land Bank of the Philippines (LBP) for the SRP loan, and it stands to earn P1.38 billion from the SM and FLI deals.

Funds

“Bisag i-times three pa nato atong loan payments this year, we have funds to settle it, which are the payments of SM and Filinvest. We don’t see any problem with our loan payments,” Fernandez said yesterday.

He explained that this is the reason the City can afford to provide P10,000 to P20,000 in scholarships to all public high school graduates.

Fernandez said that by next week, the City will collect the P269.5 million payment of FLI.

“They are scheduled to pay next month yet but we have requested for an earlier payment, which I think they will do. We are expecting it middle of this month,” he said.

On Feb. 20, the City will pay LBP 524,883,302.22 yen for Loan No. 1, which is the original loan used to construct the 290-hectare SRP. At yesterday’s exchange rate of P.520600 for one yen, the amount is P273.25 million. The actual payment in peso will depend on the value of the yen and the US dollar on the payment date.

It will also pay P84.3 million and another P19.9 million for Loan No. 2 and 3, respectively, to LBP, the conduit bank for the loan with Japan Bank for International Cooperation (JBIC).

Loan No. 2 represents the two-percent pass-on interest of LBP as the conduit bank for the loan with JBIC, while Loan No. 3 represents the interest for the three-year grace period for the second loan.

The City is expected to pay an estimated P664.74 million in 2011, P636.5 million in 2012, P436.79 million in 2013, P422.87 million in 2014, and P408.94 million in 2015.

It will collect P676.24 million from FLI and SM Prime in 2011, P648.9 million in 2012, P621.57 million in 2013, P594.33 million in 2014 and P567 million in 2015.

After 2015 when the first two investors shall have completed their payments for purchased properties, the mayor had said that the City’s share from its joint venture with FLI to develop condominium units will cover the remaining loan payments.

The loan is payable until 2025.

Aside from the 10.6-hectare lot that FLI purchased, it also entered into a joint venture agreement with the City to develop a 40-hectare area.

The City stands to get a 10-percent share in the sale of built-up units in the joint development area, or a minimum guaranteed return, which is equivalent to the price of the lot, whichever is higher.