CITY TO PAY ¥387M FOR SRP LOAN

The amount is the first installment for 2019 and will be paid in the peso equivalent according to the exchange rate on Feb. 20

The Land Bank of the Philippines (LBP) asked the Cebu City Government to pay 387,694,700.50 yen as first installment for 2019 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 Feb. 20 and Aug. 20.

City Treasurer Arlene Rentuza said that for this year, they already allocated P448 million to pay the two installments of the 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 a balance of around P2 billion.

Upon receiving the bill 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.

The City acquired a 12.315 bil- lion yen loan from the Japan International Cooperation Agency ( Jica) for the development of the SRP in 1995.

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 Feb. 20. Our estimates when we computed for the payment of the loan was based on the prevailing rate,” she said.

Based on the exchange rate on Wednesday, Feb. 13, 387,694,700.50 yen is equivalent to US$3,504,224.83 or P182,546,947.71.

The loan is payable until 2025. Although the City has enough funds, Rentuza said she is not in favor of paying off the remaining balance of the loan.

“I think we can pay off the whole balance if there is an excess in the City’s money, when all the basic services and projects are funded. For me, 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 had wanted the City to pay the remaining balance of the loan, which was estimated to be around P2.6 billion, so the City could save on interest and currency fluctuations.

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