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Thursday, August 10, 2006
City needs to pay P266M this month
By
Gingging A. Campaña
Sun.Star Staff Reporter
Cebu City Hall will shell out about P266 million on Aug. 18 to pay for its loan amortization for the South Road Properties (SRP). Almost half of the amount will go to interest payments.
With this obligation, Mayor Tomas Osmeña requested the City Council to approve his proposed third supplemental budget this year solely for the loan payment.
The council referred to the committee on budget and finance, for its review, the P142.5-million supplemental budget that represents the balance of the City’s second amortization this year.
The SRP was built using borrowed funds from the Japan Bank for International Cooperation, with the Land Bank of the Philippines (LBP) as conduit.
The City is now selling the 295-hectare property at P10,000 per square meter.
But it also spends over P1 million a day on interest alone.
For the 12.292-billion yen loan obtained almost a decade ago, Cebu City has to pay P5.958 billion at today’s exchange rate.
It is set to pay Land Bank 299,800,000 yen this month, as partial payment of the principal, and 276,254,345 yen for the interest.
City Administrator Francisco Fernandez, who talked with Assistant City Budget Officer Marietta Gumia over the phone yesterday, relayed the local finance committee’s estimate of the total amount in peso, which is about P266 million, at P54 to the dollar.
Available funds
Gumia told Fernandez that the City already appropriated P124 million in its annual budget this year. The balance will be charged to the third supplemental budget.
The committee, through the mayor, identified funds that were not obligated from the 2006 annual budget as available source.
Last February, the City paid P259.5 million to the Land Bank.
SRP project manager Nigel Paul Villarete has said that the City has to withstand some difficulty this year, when it starts marketing the SRP and at the same time paying for the full semi-annual amortization of the loan.
After this, though, the SRP loan balance and interests will diminish, he added.
According to the Land Bank’s loan amortization repayment schedule until 2025, the payables could hit P10.16 billion, including the interest and guarantee fees.
But if it is able to sell lots at the SRP and pay in advance, its payables might amount to less than P10 billion.
For Bisaya stories from Cebu. Click here. (August 10, 2006 issue)
Write letter to the editor.Click here.
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