South Road Properties
South Road Properties

LBP is asking Cebu City for first payment in SRP loan

THE Landbank of the Philippines (LBP) has asked the Cebu City Government to pay a total of ¥387,694,700.50 or P182,467,114.70 as first payment for its loan for the South Road Properties (SRP) project.

As agreed, the City is required to pay LBP the amortization of its loan for the SRP project every February 20 and August 20 every year.

City Treasurer Arlene Rentuza said that for this year, they already allocated P448 million to pay the two installments of SRP loan including the principal and interest.

“LBP will debit the amount from our account since we already allocated a portion of our annual budget for the payment of the SRP loan,” she said.

Right now, the City has around P2 billion balance of the loan.

Upon receiving the billing from the LBP, the City issues an authority to debit to allow the bank to deduct the payment for the loan from the account of the City.

It was in 1995 when the City acquired a 12.315 billion yen loan from Japan International Cooperation Agency (Jica) for the development of the SRP.

At that time, the loan’s peso equivalent was P4.65 billion.

LBP serves as the conduit bank for the loan with Jica.

Rentuza said the actual payment in peso will depend on the value of the yen and the US dollar on the payment date.

“We cannot compute as of now because the figures will be based on the exchange rate on February 20. Our estimates when we computed for the payment of the loan was based on prevailing rate,” she said.

Based on the exchange rate on Wednesday, February 13, ¥387,694,700.50 is equivalent to $3,504,224.83 or P182,546,947.71. The loan is payable until 2025.

Although the City has enough fund, Rentuza said she is not in favor to pay off the remaining balance of the loan.

“I think we can pay off the whole balance if there is excess in the City’s money, when all the basic services and projects are funded. For me personally, there is no need to pay off the loan. It’s good that we have money and we can use it for (other urgent needs),” she said.

In 2016, former mayor Michael Rama would have wanted the City to pay the remaining balance of the loan, which was estimated to be around P2.6 billion, so the City can save in interest and currency fluctuations.

But in his previous statement, Mayor Tomas Osmeña said paying off the remaining balance of the SRP loan is not his priority, saying the interest rate for the loan is low.

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