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Thursday, June 03, 2004
Councilors slash credit line by P200M
By Gingging A. Campaña
Sun.Star Staff Reporter
INSTEAD of the entire P600-million offer from three banks, the Cebu City Council yesterday authorized Mayor Tomas Osmeña to tap only a P400-million credit line agreement with the Philippine Postal Bank.
This came amid fears that the City Government might not be able to pay its domestic loans when it starts paying for the principal and interest of the loan for the South Reclamation Project (SRP) in 2006.
However, Acting City Treasurer Tessie Camarillo assured that the City is capable of paying the domestic loans set for payment this year.
As of the first quarter this year, the City Treasurer’s Office has collected revenues amounting to P705 million or 40 percent of the target collection of P1.9 billion.
Camarillo is confident that they will be able to collect the targeted revenues by the end of the year.
She could not speak, however, for the schedule of loan payments next year and in 2006.
Camarillo said, though, that she has listed several measures to intensify revenue collection next year, such as implementing the ordinance on taxes for idle lands, the general revisions of the market values of real properties and collecting delinquent real property taxes.
Apart from the SRP loan, the City still has to pay for P208.11 million in domestic loans incurred by the Garcia administration, according to a presentation made by City Accountant Edna Jaca in an executive session yesterday morning.
The amount covers the balances for the Pardo public market (P8.84 million), the low cost condominium project (P8 million), the City Hall annex (P33 million) and that from the Philippine Veterans Bank (P158 million).
The loan with Philippine Veterans Bank (PVB) was used to pay for the earlier loan that City Hall got from the Land Bank of the Philippines (LBP) to pay its P150-million balance for Toyo Construction, the contractor for the civil works of the SRP.
The City intends to use P390 million of the P400-million credit facility to pay for the P150 million to PVB, the P120 million to construct the ramp over the Carbon public market and the P120 million to fund various projects in the first supplemental budget this year.
However, City Administrator Juan Saul Montecillo said yesterday that the City already paid the P150 million to PVB out of the general fund.
So, the City will only have to use P240 million from the P400 million, Councilor Jocelyn Pesquera explained.
With this development, Councilor Carmelita Piramide suggested that the amount for the credit line agreement should be reduced because the City would always “feel an itch to spend” if the whole thing is tapped.
“If Mr. Montecillo is concerned about the SRP loan, then I believe we should go slow on the P200-million credit line (P100 million each for LBP and PVB),” Piramide said.
Following a break and a caucus before the regular session in the afternoon, the council agreed not to draw on the P100-million credit line each offered by the other two banks.
Meanwhile, Mayor Osmeña, who attended the executive session, said the City may sell or lease out the City’s 4.6-hectare property on Block 10 at the North Reclamation Area.
This way, the proceeds can be used to pay for the P444-million payables (principal and interest) for the SRP loan scheduled in 2006, he said.
However, the mayor already left the session hall when the council found out that Block 10 has been made a collateral for the loans that the City entered into during the Garcia administration.
Computing the 4.6 hectares at a P10,000 per square meter market value, for example, will only yield P416 million.
But with the other charges (such as taxes and miscellaneous fees), the City will only get a net of about P328 million, which is not enough to pay the SRP loan for 2006, Pes-quera said.
She also said all City officials need to realize that of the 150 infrastructure projects this year, only 20 were bid out and the rest still have to be implemented.
She raised fears that elected local officials might also think that because the City already got the credit line, this could be used to fund their projects. .
(June 3, 2004 issue)
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