By GERRY LEE GORIT
TAGOLOAN, Misamis Oriental - The Office of the Administrator of the PHIVIDEC Industrial Authority (PIA), a government owned and controlled corporation and an Industrial Authority, has denied the allegation of one of its board of directors that more than P1 billion remained uncollected from its locators in terms of unpaid real property taxes an rentals, calling it premature and done without consultation and study of the transactional history of the locators involved.
Leo Magno, PIA Administrator, in his response to the allegation made through the media on July 8, 2017, said “the locators were needlessly embarrassed despite the fact that their listed liabilities have yet to be legally determined and resolved.”
Earlier, former Misamis Oriental First District representative Benjo Benaldo, now director of PHIVIDEC after having been appointed last May 25, told media practitioners during a press conference that unpaid real property taxes and rentals owed by locators to PHIVIDEC, which was P1,064,720,370.07 remained unsettled up to this time.
Benaldo listed top 10 account receivables in the form of real property taxes, rentals and port fees as Steag Power Inc. (SPI) - Php 447,212,139.85, Mindanao International Container Terminal (MICT) - Php 342,438,335.33, Ferrochrome - Php 310,381,879.08, Philipiine Sinter Corp. - Php 131,442,786.06, Unionbank – Php 92,378,241.39, Top Forest – Php 64,214,665.48, Vicmar – Php 30,816,529.31, Napocor – Php 29,699,193.49, Axent – Php 29,423,063.21, Department of Public Works and Highways/Tulay ng Pangulo (DPWH) – Php 13,349,742.31.
Benaldo said these anmounts could mean 1,000 health centers, 2,000 classrooms or 2,500 houses for Filipinos displaced in Marawi or 1,000 beneficiaries for livelihood programs.
Benaldo called on these locators to “pay up or get out” of the Phividec area.
“While we appreciate the enthusiasm of Mr. Benaldo in trying to enforce the proper collection of taxes, the same must not be done to shame and embarrass the locators of PHIVIDEC who have invested significant amounts of capital and introduced numerous jobs in the region. The report of Mr. Benaldo was prematurely made without consultation and study of the transactional history of the locators involved. Thus, the locators were needlessly embarrassed despite the fact that their listed liabilities have yet to be legally determined and resolved,” said Magno.
From the facts disclosed, the majority of the accounts presented have been resolved while some are awaiting resolution before the proper courts or governmental agencies. These concerns have a transactional history which involve complex legal issues and require responsive and fair solutions.
Magno said the real property tax liability of SPI has been condoned and reduced by the Office of the President, through Executive Order No. 19.
“After a careful study by the OP of the legal and factual issues regarding this issue, it was determined that the real property taxes being charged against the Independent Power Producers such as STEAG, has been contractually assumed by the National Power Corp., the Power Sector Assets and Liabilities Management Corp. (Psalm) and other GOCCs, paying these would impose massive direct liabilities on the part of the GOCCs. An improper enforcement of this tax would place the government in breach of its international contractual obligations and have a direct impact on the costs of electricity in Mindanao,” said Magno.
“The Office of the Government Corporate Counsel has determined that MICTSI is not liable for the payment of real property taxes over the land and equipment owned by PHIVIDEC itself. MICTSI is the operator of the PHIVIDEC-owned Mindanao International Container Terminal (MICT). All physical assets and equipment in the MICT are owned by Phividec and MICTSI merely brings in the technical personnel for the efficient management and operation of the port. Thus the real property tax imposed was wrongfully assessed as Phividec is the beneficial owner of the port itself,” Magno said.
Phividec has already filed the appropriate legal action against Ferrochrome for the collection of this outstanding liability. The case is currently pending before the Supreme Court, Magno added.
As to the PSC alleged financial liability, Magno said upon advise of the Office of the Government Corporate Counsel, the assessment of the tax against PSC was erroneously issued and is contrary to the intentions of the contract entered into in 1974 and 2000. “PSC, a Japanese corporation, was the first company and among the largest that located into Phividec and the administrations at the time of its
investment extended it concessions in consideration of its entry.
Phividec, on the other hand, Unionbank, on the other hand, is constrain to enforce collection through the courts after a series of failed meetings and attempts for settlement of its account since 2012. A final notice of demand has been sent to Unionbank on June 30, 2017.
As to locators Top Forest and Vicmar, which are among the pioneering locators in Phividec, the amounts reported reflect PIA’s position on rental fees over the land after PIA imposed a revised schedule of fees in 2010. “The impact of such revision met with legal opposition from the locators as they insist on the application of the old rates from their original contracts. The matter was brought to the OGCC for legal study and recommendation. Since 2016, reconciliation of accounts were undertaken for the revised assessment of their accounts,” Magno explained.
On the issue of Napocor non-payment of more than Php 29 million, Magno said this amount represents unpaid lease rates for the properties of NPC within Phividec. As PSALM is the constituted body for the settlement of NPC’s liabilities, this account has been forwarded to them for payment.
As of February 2017, the outstanding account of Axent is planned for collection thru the courts as they have failed to pay their obligations to Phividec despite repeated demands for settlement and failed attempts for settlement.
And, on the account of DPWH, which represents rental payments over a parcel of land leased by the agency to store and mobilize its construction materials for the building of bridges throughout Mindanao, the collection of this amount has been forwarded and coordinated with DPWH.
“It must be emphasized that PHIVIDEC is an investment-oriented office whose primary job is to invite investors to bring businesses and jobs into Mindanao. Any negative perception of unnecessary hostility towards locators would be detrimental to inbound investments,” said Magno.
Magno said, “Phividec is home to 34 manufacturing firms and 68 service firms. Though there may be delinquent accounts as there will always be such present in any organization, the same is not to the exaggerated extent as presented by Mr. Benaldo. Of the 1 billion presented by him as outstanding accounts, 400 million of such was erroneously assessed and 447 million has been condoned by the Office of the President. The other accounts are pending litigation and are being addressed for its eventual resolution through a legal process.”
“To provide a proper perspective on the role of Phividec and the locators, we should also highlight that since 2011, the Phividec Industrial Authority has brought in a total capital investment of Php 39.13 billion, based on COA reports. This capital investment amount represents thousands of jobs and an increase in economic growth that can be easily witnessed around you as Region 10 has registered the highest growth rate in the country for several years. It is evident
with the rise of malls, the increase in banks, the entry of retail and other downstream industries, and the robust trade in the region.
Magno said the officers and employees of Phividec continuously strive to bring in investments to contribute in the economic growth of the region and the creation of job opportunities for the people of Mindanao. “We seek to provide a balance to the reasonable return of investments of the locators and the interests of the state in the proper collection of taxes with the end goal of being a catalyst for economic and social development of Mindanao and the rest of the country,” he added.
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