Filinvest to pay city P338 million on Thursday (South Road Properties)

Updated March 03, 2009 12:00 AM



CEBU, Philippines – Instead of today, Filinvest Land Inc. will hand over the P338 million first payment of its joint venture agreement for developing 50.6 hectares of the South Road Properties on Thursday.

Cebu City Hall still needs to finalize the technical description of the lots at the Department of Environment and Natural Resources.

One or two titles will be turned over to FLI, which will convey an initial two hectares as a result of the first payment.

The mother title of the 10-hectare outright purchase will then be taken from the Land Bank of the Philippines to be brought to the Registry of Deeds.



After that the remaining eight hectares will join the 40 hectares to be placed on an escrow account.

The 40 hectares are the first part of the contract that will be developed under a joint venture agreement.

Cebu City acting vice mayor Hilario Davide III yesterday met with city administrator Francisco Fernandez and acting mayor Michael Rama on whether a resolution is needed for the conveyance of the titles alongside the payment.

But Fernandez said a resolution is no longer needed since the contract signed last January was already all-encompassing.

“The moment the contract was signed, it was already a ‘catch all’, the mayor is already authorized to sign the Deed of Sale and others, which are consequences of the contract,” Fernandez said.

FLI is the SRP’s first sale since its reclamation was completed in 2005. In the next six months FLI will start to develop infrastructures.

The memorandum of agreement for the Visayan Electric Company for power distribution at the SRP is already set for discussion by the City Council tomorrow during its regular session.

The document for the creation of a Joint Venture Selection Committee to deal with the proposal of Pilipinas Water Resources Inc. for water supply is already with Rama awaiting his signature. — Ferliza C. Contratista/BRP (THE FREEMAN)

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City richer by P348 million by Thursday (South Road Properties)

THE Cebu City government will be receiving P348 million by Thursday as the Filinvest Land Inc. is set to make its first payment of the land it bought at the South Road Properties (SRP).

With the payment, the Land Bank of the Philippines (LBP), the city's escrow agent, will release to the Filinvest duplicate copies of the certificates of title for the sold property.

The title that would be released to the Filinvest today would still be under the name of the city but a deed of absolute sale would be issued so that the Filinvest could start working on transferring the titles under its name.



The city was supposed to get the first payment today, however, the Department of Environment and Natural Resources (DENR) did not release the properties' technical description.

Cebu City Administrator Francisco Fernandez assured of getting the documents from the DENR before the 30 day period after the signing of the contract.

According to the Joint Venture contract between the city government and the Filinvest, the LBP has the obligation to release the duplicate copies of the land title to the possession and custody of the Filinvest upon the receipt of the payments. The city would also issue the deed of absolute sale of the property that was paid in installment basis.

The city entered into a Joint Venture contract with the Filinvest to develop a 50.6 hectare property of the SRP worth P25 billion.

The contract involves the development of the 40 hectare joint venture property as well as the purchase of the 10.6 hectare in Pond F.

“We have reviewed the documents and we are ready to sign,” said Fernandez, chairman of the Joint Venture Selection Committee (JVSC) for the Filinvest deal.

He said the City Council need not issue a resolution authorizing acting Cebu City Mayor Michael Rama to receive the first payment and to sign the documents pertaining to the sale and the transfer of title.

“A resolution is not needed as the contract was a catch all,” Fernandez said.

When the mayor was authorized by the City Council to sign the contract, it is already incumbent that the mayor will be signing all the documents which are the effect of the monumental signing of the JV contract last Feb. 2.

A representative of the Cebu City Hall was tasked to go to the LBP yesterday to have the title subdivided in the Registry of Deeds under an escrow arrangement.

REPORTER MARIAN Z. CODILLA

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LBP sets release of South Road Properties lot titles; CH to meet an obligation in JV

THE Land Bank of the Philippines (LBP) issued last week a certification for the release of the titles covering a 12-hectare area of the mortgaged South Road Properties (SRP) which they will turn over to the Cebu City Government anytime it asks for it.

Titles for another eight hectares could also be released after the City Government pays its P357-million amortization this month, a high-ranking official of the LBP said.
The release of the titles will allow the City to meet one of its obligations in the proposed joint venture contract with Filinvest Land Inc. (FLI) if Acting Mayor Michael Rama is authorized by the City Council to sign the agreement.

As conduit bank for the City’s 12.315-million yen loan with the Japan International Cooperation Agency (Jica), the LBP has the titles of some 240 hectares of reclaimed properties within the 302-hectare SRP.

12 hectares

According to records of the City Treasurer’s Office, as of August 2008 when the last loan payment was made, the City has paid P1.473 billion to Jica for the principal and interest, and is entitled to get titles of a land area equivalent to the payments made, the LBP source said.

“That is why we have already given them a certification that we will release the titles of 12 hectares anytime they need it. When they pay this month, we can give them titles for another eight hectares,” said the source who is privy to the SRP loan transaction and who requested anonymity.



As stated in the proposed Joint Venture contract between FLI and the City, the City is supposed to turn over titles for a 12-hectare portion before they start developing the property.

“Mr. Fernandez asked for the certification before they issued the notice of award to Filinvest but actually, the certification is no longer needed because it’s part of the loan agreement that the City will be entitled to get titles of properties that have been paid for,” the source said.

No turnover

In a phone interview yesterday, City Administrator Francisco Fernandez said he just came back from a leave of absence and has not received a copy of the certification.

He clarified that the City Government will not be turning over titles of any portion of the SRP to FLI unless it pays the City an amount equivalent to the value of the land.

“As a down payment, they will give us some P350 million and for that, we will release the titles of a two-hectare portion. When another payment is made, then we release other titles. We will have to review the contract and make sure that we will give them the titles only after payments are made,” said Fernandez.

The contract also requires FLI to remit payments for the outright purchase of a 10.6-hectare waterfront area directly to LBP. This would be considered as advance payment, the source from the bank said.

FLI is required to pay some P250 million a year for six years for the purchase of the land.

“This means the amount due for the City’s payment of the loan principal and the interest will decrease because the computation of the interest is based on the loan balance, it is diminishing,” said the source.

Since the JBIC and the National Government do not allow any pre-payment of loans by LBP, the latter will have to bear the interest payments to JBIC, as well as the risk of any change in the foreign exchange by the time the loan payments are due. (LCR)

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