THIS time talk is not cheap. In fact, it is very expensive, hundreds of millions of pesos expensive.
In late 2014, then Mayor Michael Rama announced his plan for the city to secure a loan to pay all its indebteness to the Japan International Cooperation Agency (Jica) for the reclamation project that became known as the South Road Properties. “That will have to be pursued. Joy Pesquera keeps reminding me about that.”
The plan never took off, notwithstanding Pesquera’s persistence. But the talk about fully paying the loan did not let up; it has been going on for five years now. And during that period, the city has continued to pay interest and other charges at eleven percent per annum.
Not Rama’s fault, though. He did not pursue the take-out loan because he didn’t have to. On or about the time that he told the media about Joy’s reminders, the city council passed a resolution authorizing him to sell a huge chunk of the SRP. The sale took place the following year. Suddenly, Rama had billions of pesos at his disposal, more than enough to pay off the Jica loan.
Except that it was never really at his disposal. The city council which was dominated by allies of his mentor-turned-archenemy Tomas Osmeña, absolutely barred him from touching the funds.
In an ideal world, Osmeña would have been consulted on matters like the Jica loan payments and the sales of SRP lots. You can say the worst things against him but you cannot take away the fact that it was he who dared pursue the SRP dream and nagged the Philippine Government into guaranteeing, and Jica into granting, the loan to fund it.
And in an ideal world, Osmeña would have shared his wisdom without imposing it, content in the knowledge of the legacy that he had created. But so much for wishful thinking, we are not in an ideal world.
The loan that Osmeña negotiated was foreign-denominated and therefore vulnerable to the unpredictable movements in the exchange rates. At the time, it was obtained, its peso equivalent was P4.65 billion, payable in installments over a 30-year period which ends in 2025.
As of February last year, the city has already paid P6 billion to Jica, P2.3 billion of which was for interest. Payment is done twice a year, in February and in August. The current balance is P1.7 billion. Immediately after his proclamation, Mayor Edgardo Labella announced he will pay the full amount before 2025.
He has the money to do that; the proceeds of the controversial sale in 2015 are intact and he has the majority in the city council. Let’s see if he has better luck than Rama and succeed in deleting the Jica account from the city’s ledgers.