Heavy loan-A A +A
Friday, August 22, 2014
CEBU City Councilor Noel Wenceslao said the city’s payment of P500 million to P550 million a year for the South Road Properties (SRP) yen-denominated loan is too heavy to bear.
Wenceslao, who has been in the banking industry for 25 years, said the loan payment is about P1.4 million a day or P16,000 an hour.
But my dear councilor, the SRP is a pet project of Bando Osmeña-Pundok Kauswagan
(BOPK) boss Tomas Osmeña? Oh, I forgot Wenceslao and three other BOPK councilors had bolted from the BOPK.
The 300-hectare SRP was intended to generate at least 100,000 jobs for Cebuanos. The lender Japan Bank for International Cooperation (JBIC) said it remains underdeveloped.
But it was reported to be a good place to go for birdwatchers.
The city government is instead saddled with a huge debt, about P3.2 billion, payable until 2025.
What a legacy. What a heavy burden.
Wenceslao said the interest alone ranges from P350 million to P400 million a year, including interest charges and commitment fees.
He proposed to convert the yen loan into a peso loan, cutting interest rate from 11 percent to around five percent and eliminating commitment and guarantee fees because it will be in pesos.
Why not sell SRP lots for a good price to pay off the loan?
BOPK founder Tomas Osmeña said the SRP is the Cebuanos “future.” The future is indeed bright. There’s nothing the blocks one’s view at the SRP, other than the SM Seaside City and the Filinvest developments.
But there’s a loan to pay. Cebuanos, however, are a fun-loving people. They don’t mind the heavy burden.
Take a look at Wenceslao and company. What a sigh of relief they must have felt after he, Richie Osmeña, Gerry Carillo and Roberto Cabarrubias left BOPK.
Published in the Sun.Star Cebu newspaper on August 23, 2014.