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Saturday, July 29, 2006
Fernandez cites P511M net savings
In terms of finances, the Cebu City Government is “stable,” said City Administrator Francisco Fernandez in reaction to a Commission on Audit (COA) report showing the City’s debts as of last year at P5.958 billion.
The amount is 54 percent more than the listed liabilities of P3.86 billion in 2004.
The bulk or 98.76 percent of the City’s debts is its P5.185 billion foreign loans to build the 295-hectare South Reclamation Project, now called the South Road Properties (SRP).
On Aug. 18, the City will have to shell out about P275 million as SRP loan payment. Almost half of the amount is for interest payments.
The SRP was built using borrowed funds from the Japan Bank for International Cooperation, with Land Bank of the Philippines (LBP) as conduit bank.
Fernandez said, though, that the City’s financial situation has improved.
One indication is its P511 million net savings last year, which is 90.78 percent more than the P243.188 million earned in 2004.
COA credited the increase to the City Treasurer’s Office’s “extensive collection campaign.”
Led by Acting Treasurer Tessie Camarillo, the treasurer’s office almost equaled already last year’s net income in just six months this year.
Emma Compra of the City Treasurer’s Office cash disbursement division said that as of June 30, they have met 55 percent of its targeted P2.1 billion.
CTO has collected P1.2 billion in taxes from January to June.
And, with expenses at P700 million, the City has a net income of 500 million.
Compra said income as of last month does not include payments made from the sale of City Hall’s Block 10 at the North Reclamation Area because the City still has to collect 80 percent more.
The Gokongweis bought the 4.6-hectare lot for P579 million.
Fernandez said the City is not imposing any increase in taxes.
But it has updated the valuation of real properties that was last made over a decade ago yet.
Also, the City is set to collect taxes from hospitals and schools, but at a lower percentage of the gross income from 2.5 percent to just 0.75 percent.
He expects the City’s income to significantly rise once this is implemented.
The City Council, though, is set to approve an amending ordinance that will exempt high schools and elementary schools from paying taxes.
The SRP, too, with locators already negotiating with City Hall, is expected to solve its money woes.
“There is nothing to worry. SRP is a very viable piece of land. We are in the final state of negotiation with a Taiwanese firm, which is interested to lease five hectares and buy one hectare,” Fernandez said.
The City is selling the 295-hectare property at P10,000 per square meter.
Even if the City sells at P2,000 per square meter, the generated income is more than enough to pay all debts, said Fernandez.
“We have a cash flow problem but not a financial problem,” he said.
Compra, in a separate interview, said the City has to partially pay LBP for the SRP next month 265.41 million yen as loan principal for the civil works and its 246.92 million yen interest.
This is on top of the 34.394 million yen as partial payment for the principal loan for the consultancy fees and its 29.337 million yen interest.
The CTO came up with an estimate in peso by using the foreign exchange rate of P53.50 at 0.0089 yen, respectively, to a dollar, which is the international currency standard.
Compra said they took into account the inflation in setting what exchange rates to use as basis for computations. (RHM)
For Bisaya stories from Cebu. Click here. (July 29, 2006 issue)
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