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Aug 23, 2017 @ 9:43

DTI to review PhilExport’s anomalous lease of prime gov’t lot: P1,000 rent per year for 50 years

 

Trade and Industry Secretary Ramon M. Lopez said he will order a review on the lease deal by the Philippine Exporters Confederation Inc. (PhilExport) of its prime 5-hectare prime property which has been the subject of a resolution filed in Congress for being disadvantageous to the government.

“We will review the deal,” said Lopez in a text message when asked to comment on House Resolution No. 1188 filed in Congress seeking an investigation into the lease of the 50,642-square meter DTI property by the exporters’ organization for only P1,000 per year for a period of 50 years renewable for another 25 years.

The resolution, jointly filed by Eastern Samar Rep. Ben Evardone and party-list 1-Ang EdukasyonRep. Salvador Belaro Jr. has called for an investigation by the House Committee on Good Government and Public Accountability into a disadvantageous lease contract involving prime government real estate stretching over five hectares on Roxas Boulevard.

Together with party-list 1-Ang Edukasyon Rep. Salvador Belaro Jr., Evardone has filed House Resolution No. 1188 seeking a review of the reported non-performance by private parties Philippine Exporters Confederation, Inc. (PhilExport) and Manila Exposition Complex, Inc. (MECI) of their obligations under the contract.

Under the Contract of Lease signed January 23, 1996, the Department of Trade and Industry (DTI) rented the 50,642 square-meter lot to PhilExport for only P1,000 per year for a period of 50 years renewable by another 25 years.

In the same deal, PhilExport was allowed to sub-lease the property to MECI based on a fixed rate or on the latter’s earnings, whichever is higher.

The contract required MECI to establish the World Trade Center complex which shall include world-class exhibition halls with office spaces for government agencies in the building.

Evardone and Belaro, however, said the government appears to have been shortchanged becausethe leased property has not been developed in accordance with the intent of the contract and R.A.7844 otherwise known as the Export Development Act of 1994.

They pointed out that the liberal term of lease was intended to promote export development to transform the Philippines into an exporting nation but while the government held up its end, its private partners under-delivered on their commitments.

“The rental of P1,000.00 per annum for a period of 50 years is grossly disadvantageous to the Government resulting in substantial loss in possible revenue considering the prime location of the property,” said Evardone.
Sergio Ortiz-Luis Jr., who has been serving as PhilExport for decades now, said the lease deal was mandated under the Export Development Law, which was passed in 1994.

The law, Ortiz-Luis said, allowed the dominant export organization not just to develop the world trade center but also allowed it to sub-lease the property for the development of the world trade center and other trade related promotion activities.

According to Ortiz-Luis, the property was supposed to be given to PhilExport but the process was so complicated, resulting in the leasing arrangement.

“All incomes from these activities are to be spent for export promotion,” he said noting that the income has been reported to the Export Development Council.

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