The Trade Department is set to investigate the lease contract between the agency and the Philippine Exporters Confederation Inc. over a five-hectare prime property in Pasay City.
Trade Secretary Ramon Lopez said his agency would review the deal which could be putting the government at a disadvantage.
Two congressmen filed House Resolution No. 1188 calling for 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 by another 25 years.
Eastern Samar Rep. Ben Evardone and party-list 1-Ang Edukasyon Rep. Salvador Belaro Jr. asked the House committee on good government and public accountability to investigage the lease contract.
Both solons also sought a review of the reported non-performance by PhilExport and Manila Exposition Complex Inc. of their obligations under the contract.
Under the contract of lease signed Jan. 23, 1996, the Trade Department leased the 50,642-square-meter lot to PhilExport for just P1,000 per year for a period of 50 years, renewable by another 25 years.
The deal also allowed PhilExport to sub-lease the property to MECI based on a fixed rate or on the latter’s earnings, whichever was higher.
The contract required MECI to establish the World Trade Center complex which included world-class exhibition halls with office spaces for government agencies in the building.
The solons claimed that the government appeared to have been shortchanged because the leased property was not developed in accordance with the intent of the contract and R.A.7844 otherwise known as the Export Development Act of 1994.
The congressmen said the liberal term of lease was intended to promote export development to transform the Philippines into an exporting nation. They said that while the government held up its end, the 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.
PhilExport president Sergio Ortiz-Luis Jr. said the law allowed the export organization not just to develop the world trade center but also to sub-lease the property for the development of the world trade center and other trade related promotion activities.
He said 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. Luis said the income was also reported to the Export Development Council.