Chevron Philippines, which markets the Caltex brand of petroleum products, said Wednesday its lease contract with a subsidiary of Batangas Land Co. Inc., a unit of state-run National Development Company, was done above-board and complied with Philippine laws and regulations.
“The Chevron Philippines lease contract with BLCI on the Batangas property was entered into in compliance with all Philippine laws and regulations, and has been beneficial to both the government and CPI,” said Chevron Philippines policy, government and public affairs manager Raissa Bautista.
“As one of the pioneer energy companies in the Philippines which has been operating here for over a hundred years, our commitment to the Philippine market remains strong,” Bautista said.
Chevron currently imports its fuel supply requirements after shutting down a 72,000-barrel-per-day refinery in San Pascual, Batangas in 2003.
“We will maintain open communication with the government, an important and valued partner, on this matter,” Bautista said.
Energy Secretary Alfonso Cusi said he would not likely to intervene in the issue involving Chevron. “It’s been NDC and Chevron,” Cusi said when asked if his agency would summon Chevron to shed light on the issue.
The Finance Department said Wednesday it recommended to the NDC board to shut down BLCI by 2021 so the government could finally take back its sprawling 120-hectare (1.2 million square meters) property in Batangas now valued at around P5 billion.
It said Chevron Philippines was leasing the property for a measly 74 centavos per sq. m. per month, representing only 4 percent of the current monthly fair market rental estimate of P17.90 per sq. m.
Heeding the recommendation of Finance Secretary Carlos Dominguez III, the NDC board decided in December last year to terminate in 2021 the corporate life of BLCI.
Dominguez, a member of the board, made the recommendation after the DOF uncovered what it called onerous provisions in BLCI’s more than four-decade-old lease contract with Chevron, which uses the property as an oil import terminal.
Shortening BLCI’s corporate life will finally allow the government to exercise “full ownership, control, and rights over” this prime lot and other real estate properties occupied by Chevron, which are strategically located for the country’s future energy projects, Dominguez said.
He said the government should have exercised these rights as early as 1975, but Chevron was able to obtain preferential treatment to continue occupying and using these properties under the Marcos administration.
Dominguez said “these properties should have been turned over to the government as early as the 1970s, not only legally speaking but, more importantly, based on the principle that these properties should truly benefit the Filipino people.”
“These companies were given sufficient time to transition and pass on full ownership to the government. It is now high time for the government to exercise its rights,” Dominguez said.
The agency said the minuscule rent of 74 centavos per sq. m. a month, which amounts to only P10.66 million a year for the 120-hectare industrial park, is the rate that Chevron has been paying the government since 2010.
The amount is only 4 percent of the P17.90 per sq. m. a month or P257.76 million a year that current fair market rental rates in the area would suggest based on comparative data from NDC appraisal reports and other official sources.