EDC clears PhilExport over lease deal of prime gov’t lot

Published July 11, 2018, 10:00 PM By Bernie Cahiles-Magkilat

https://business.mb.com.ph/2018/07/11/edc-clears-philexport-over-lease-deal-of-prime-govt-lot/

The Export Development Council (EDC) has cleared the Philippine Exporters Confederation’s (PhilExport) long-term lease arrangement of the prime 5-hectare government property along Roxas Boulevard saying there was nothing wrong in the arrangement with benefits being plowed back for export development programs and projects.

The EDC also approved the budget for PhilExport and the new projects that the group has entered into including the building of a hotel, an office and an exhibition hall.

“We find everything in order,” said Trade and Industry Secretary Ramon M. Lopez, also chairman of EDC. Lopez said the EDC position or comments will be submitted to the Lower House, wherein a resolution was filed calling for investigation on PhilExport’s P1,000 annual lease of the property because the deal was deemed “disadvantageous” to the government.

Lopez explained that the P1,000 annual lease granted to PhilExport by the government during then President Fidel V. Ramos under Executive Order 294 was meant to support exporters make money out of the property since the government does not have enough resources to provide for their developmental programs and promotion activities.

To earn from the property, PhilExport formed a joint venture Manila Expositions Complex, Inc. (MECI) to build the World Trade Center. PhilExport owns 18 percent of MECI and the DTI through the National Development Company owns a bigger 36 percent. The ICCP Group of Guillermo Luchangco owns the majority stake in MECI. PhilExport then earns from the lease generated by the WTC, which hosts the country’s biggest exhibits and trade fairs.

“That is the concept of the arrangement,” Lopez said.

Over the past 19 years (1997-2016), PhilExport was able to contribute P300 million which it used to support export development programs.

“So the original intention of that arrangement is happening. It’s legal and backed up by law.
There is no need to change the arrangement,” he said adding that “upon review it was established that the arrangement has been followed” because there was a flowback of revenues to exporters.

Moving forward, the EDC also approved the new projects being initiated by PhilExport like the building of the hotel, office office building and the exhibition hall.

For this year, the rental from the property is expected to contribute to the PhilExport revenue starting this year.

The exhibition hall is expected to raise P36.9 million in annual lease while the hotel is P17.5 million and the office building with P13 million. But the current lease rates of P500 per square meter, which is 50 percent only of its potential lease, will be doubled once the construction is finished four years from now.

Overall, PhilExport has committed to allot P75 million this year for export promotion and activities. This will be on top of the P200-million exporters’ support granted under the DTI budget.

Lopez said they reviewed the lease rental and found that is within the ongoing lease rate in the area.

Earlier, PhilExport President Sergio Ortiz-Luis Jr., who has been running the group for decades now, said that Filipino-owned consortium Platinum Group is building a 500-room hotel and a 37-story office building.