July 23, 2018, 12:03 am
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EDC says property deal ‘in order’

The Export Development Council (EDC) finds the government’s deal with the Philippine Exporters Confederation Inc. (Philexport) for the long-term lease of a five-hectare property now occupied by the World Trade Center as “not disadvantageous” to the state.

“Everything is in order,” said Ramon Lopez, trade secretary and co-chair of the government-private sector EDC, referring to the P1,000 annual lease paid by Philexport to the government for the use of the sprawling property.

“(There’s) no need to change the deal,” Lopez said.

 The group endorsed a hotel and office building project in the property which Lopez said would help boost Philexport’s rental income that would redound to the benefit of its members, the exporters.

At last week’s meeting, EDC came up with this consensus which would form part of its comments to be submitted to Congress which is probing the contract for being allegedly disadvantageous to the government.

The lease would go up to P75 million a year from the current P1,000 under a new commitment from Philexport.

“Government is not shortchanged and the original terms of the agreement have been followed. The original intent is in order, backed up and legal by law,” he added.

The Ramos administration in 1996 due to lack of budget allowed Philexport to make use and build structures on the property owned by the Department of Trade and Industry.

Lease on the World Trade Center exhibition halls were to be used for export development and promotion.

The original plan was for government to donate the land but this was later changed to a long-term lease for a token rate of P1,000 a year.

Lopez said over the past 19 years, Philexport was able to contribute P300 million by plowing back the amount to various export promotion and capacity-building programs.

According to Lopez, Philexport derives revenues from WTC Corp., represented by the ICCP Group which invested in the structure in joint venture with the Philexport and the National Development Co.

The structure was earning a yearly income and the JV was issuing dividends to shareholders.

The other investors in WTC have nothing to do with Philexport’s arrangement with the government, Lopez said.

The way forward, he said, is for the new project, a hotel and an office building, which will generate bigger income.

A Filipino-owned company Platinum Group would undertake the project. 

Lopez said EDC endorsed the project after it secured a commitment there would be a new revenue stream from the project.

Beginning this year, lease rental revenues would amount to P31 million a year while the new project is under construction. These include the lease for expanded exhibition hall, hotel, and office.

Lopez said after the project is completed, the revenue would double to about P60 million.

The combined old and new revenue stream levels would amount to P68.3 million for this year.

Just this year, Philexport had committed to give exports would P75.5 million.

Lopez said the government, which still owns the property, will benefit from the appreciation of the land value and the annual income generated from the lease.

“The lease rates are within benchmark, we are not on the losing end,” said Lopez, saying the lease rate in the area is now P500 per sq.m. per month 
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