THE Cebu City government will avail itself of the P3-billion loan offered by the Land Bank of the Philippines (LandBank) to fund the city’s infrastructure projects.
Cebu City Mayor Tomas Osmeña expressed interest to accept the offer, saying availing of the loan is only a transition period while waiting to sell the 3-hectare lot at South Road Properties (SRP).
“We are going to negotiate. It’s only a transition period that’s why I’m selling the property. The moment it is sold, we will pay off the loan,” Osmeña told reporters.
He said the loan can be paid in full anytime or in installments.
“It’s a standby line of credit. Like a credit card, you can loan in increments of varying amounts. You can pay in full or in installments any time,” he added.
Osmeña said the 3-hectare lot sale will allow the city government to collect P3 billion as proceeds of the sale. The city is selling 3 hectares at P110,000 per square meter (sq m).
While waiting for the lot to be sold, the city needs to fix the drainage system and the roads.
“In the meantime, we will start fixing our drainage and our roads. There’s only 3 percent a year. What’s that? If we are in a hurry to sell, we will lose more money,” he said.
The City Council has already authorized the mayor to negotiate with the bank.
But councilors Joel Garganera, Jocelyn Pesquera and Eduardo Rama Jr. have registered their objection.
They said there is no need to borrow money because the city government has money from the proceeds of the 45.2 hectares of SRP lots sold by the previous administration for P16.7 billion.
Councilor Raymond Alvin Garcia said the loan will incur interest, adding the city should use whatever resources it has.
Osmeña declined to issue further comments on the statements made by the opposition councilors.
He said he will show the public the lots at SRP are more than the P30,000 per sq m selling price of the previous administration.
“I don’t need to sell 45.2 hectares for the city’s needs. We will get that property back. All I need to sell is 3 hectares. I’m trying to tell the people of Cebu that we don’t need to sell 45 hectares. Three hectares is enough for now,” Osmeña said.
He added he is working for the cancellation of the 45.2-hectare lot sale. For now, he said the loan will fund the infrastructure projects of the city.
The LandBank will be charging a 3.75-percent interest rate per annum for a period of 15 years.