Cebu City council voids Cebu South Road Properties sale

CEBU CITY, Philippines (UPDATED) – With councilors affiliated with Bando Osmeña-Pundok Kauswagan (BOPK) having the majority vote, the Cebu City council on Tuesday, June 11, approved a resolution declaring as void from the beginning the sale of land in Cebu City’s South Road Properties (SRP) area 4 years ago.

In a vote of 8-4-1 on Tuesday, the council made another last-ditch effort to invalidate the transaction that the city government entered into during the time of then-mayor Michael Rama. Rama has just been elected as vice mayor last May. 

The effort came weeks before Cebu City Mayor Tomas Osmeña would vacate the mayoral post, and one week after the council also approved a BOPK-led motion, asking the city legal officer to ask the court to scrap the deal. 

On August 5, 2015, the consortium of SM Prime Holdings Inc and Ayala Land Inc procured 26.3 hectares of the SRP, while Filinvest Land Inc secured 19.2 hectares.

Last week, on June 4, Councilor Sisinio Andales, an ally of Osmeña, filed the motion requesting the City Legal Office to file a petition with the courts to declare SRP sale “void ab initio,” citing lack of prior approval from the city council in 2015.

“The Sanggunian emphasizes that per Section 4 of the City Ordinance No. 2332, parties are enjoined from participating in any unauthorized transaction or offer to sell, dispose, transfer or otherwise convey any property in the South Road Properties, without specific prior approval from the Sangguniang Panglungsod,” the Andales-sponsored resolution read.

Citing the previous motion as premise, the second resolution on Tuesday also declared that the “funds or payments made [in] relation thereto cannot be used by the City Government nor it can it be appropriated by the latter.”

‘Sale is valid’

Councilor Raymond Alvin Garcia disputed the council's position on Tuesday, saying: “Once again, there is a valid contract and that’s already been consummated…. The only entity that can declare, affirm and confirm such contract [as] void ab initio [are] only our courts.” 

“We have no jurisdiction, we have no authority, we have no power whatsoever, Mr. Chair, to declare, confirm, and affirm a consummated contract as being void ab initio,” Garcia told the session president, Vice Mayor Edgar Labella, who had been elected mayor last May. Labella defeated reelectionist Osmeña in the 2019 elections. 

The Court of Appeals dismissed a motion for declaratory relief filed by lawyer Romulo Torres on April 30, 2019.

Mahimo man gud ta’g kataw-anan ani, Mr. Chair (We will make ourselves a laughingstock for this) [if] we don’t know the bounds of our power – the bounds of our jurisdiction,” Garcia said.

He added, “I was hoping and I’m praying that Member Andales will see the light because he himself is also a lawyer, and a professor at that.”

Councilor Joel Garganera agreed with Garcia, saying, “The court has spoken. So, might as well respect the decision of the court.”

Domino effect

After Councilor Jocelyn Pesquera commented that the SRP sale had been the council’s topic “every week,” she recalled that the developers had paid the city government P8.3 billion of the P16.76 billion worth of SRP.

Pesquera revealed that during the budget hearings conducted by the council, they found out that the “interests of the amount paid” by the developers “were also utilized in the appropriation ordinance.”

“In effect, if we approve this particular resolution, then, all our appropriation ordinances will be affected because part and parcel of the appropriation ordinances include 2017, 2018, and this year will be affected. And all of us will be liable,” Pesquera said.

Andales, in their defense, reasoned there was still a pending case and the case of Torres is not yet “final and executory.”

“With that, [we are] asking in this resolution that the money…cannot be used unless [there is] a finality,” Andales said. – Rappler.com