Metro Manila (CNN Philippines, January 22) — The state-run firm that signed a 50-year lease deal with Chevron Philippines will be dissolved to allow government to take back the land which the oil giant occupies under a lopsided deal, the Finance chief said.
A day after exposing Chevron’s supposedly onerous rental agreement with the Batangas Land Co. Inc., Finance Secretary Carlos Dominguez III revealed that the board of directors of the National Development Co. decided to shut down the state-run corporation by 2021 “so the government can finally take back its sprawling 120-hectare property in Batangas.”
NDC is the government institution overseeing BLCI. The NDC board decided in December 2019 to terminate BLCI’s corporate life by next year.
Dominguez said on Tuesday that Chevron, which runs Caltex gas stations nationwide, has been paying a “miniscule” rent of ₱0.74 per square meter every month for the spacious land used as its main depot in San Pascual.
The DOF said the current fair market value in the industrial park where Chevron’s oil import terminal sits should be around ₱17.90 per sqm. However, it found that Chevron paid a measly ₱146.51 million in rental fees for the past 44 years, or an average of ₱3 million annually.
“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 added.
Dissolving BLCI would effectively shorten Chevron’s contract by five years.
American firms were given the chance to own land here through parity rights granted by the Philippine government until 1974. When that ended, then-President Ferdinand Marcos authorized “preferential” deals for land leases.
“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 added.
The DOF estimates that the Batangas property is now worth between ₱4.9 billion to ₱5.3 billion, and should be yielding ₱257.76 million per year in rental fees.
All contracts between government and the private sector are under review following President Rodrigo Duterte’s order last year, hastened by his anger over water concessionaires Maynilad and Manila Water as their agreements allowed them to demand payment for losses worth over ₱10 billion.
Chevron Philippines runs nearly 700 Caltex gas stations in the country and also provides jet fuels for airlines at the Ninoy Aquino International Airport and the Mactan Cebu International Airport.
