Biz Buzz: Victory Liner trumps food security
A rice crisis looms in Baguio City as the National Food Authority (NFA) is being forcibly evicted out of its Marcoville property warehouse, which Philippine National Railways (PNR) sold to one of the country’s biggest bus companies, Victory Liner.
NFA Administrator Renan Dalisay said his legal team was reviewing its options to block the Baguio warehouse closure after PNR cut communication lines with the NFA.
Dalisay said the PNR had been ignoring the NFA’s demand to see the deed of sale between PNR and Victory Liner.
“Our position is the sale is inimical to public interest as the warehouse is vital to food security in Baguio City, an area prone to isolation in times of calamity. The Marcoville property houses NFA’s Kadiwa warehouse which holds Region 1’s rice buffer of 30,000 metric tons of rice. It plays a major role in providing food security in times of calamity and times of emergency,” said Dalisay.
The NFA has another warehouse in Loakan, Baguio City, but it could hold only 80,000 metric tons of rice. “We cannot risk holding our stocks in one place especially in Baguio City which is vulnerable to isolation in case of calamity. Without the 30,000 metric tons of rice in Marcoville, we will only have buffer stocks good for 17 days or well below the 30-day minimum requirement,” said Dalisay.
NFA has been leasing the Marcoville property as its Region I office and warehouse for nearly four decades. It had told PNR as early as March last year that it was willing to renew its lease contract under the same terms except for the 10-percent hike demanded by PNR.
Dalisays said it was only on Nov. 5 when PNR informed the NFA that the lease contract would not be renewed because it wanted to sell the property in a bidding. Two months later, PNR informed the NFA that it sold the property to the highest bidder, Victory Liner. Three days later, on Jan. 8, Dalisay said Victory Liner sent a letter to the NFA provincial manager demanding that the agency vacate the premises or it would be forced to take legal action to forcibly evict the NFA.
Dalisay said PNR had failed to honor NFA’s right of first refusal on the Marcoville property as stipulated in the lease contract.
When it was informed of the bidding, Dalisay said the PNR merely requested the NFA to participate in the bidding instead of making a specific offer to NFA to purchase the property.
PNR argued that NFA failed to renew its lease contract and has therefore forfeited its right of first refusal. But Dalisay said that under the contract, PNR has agreed to allow the NFA to continue to lease the property on a month to month basis if NFA needed to use the property.
Dalisay said NFA would have a hard time finding an alternative site in such a short period demanded by Victory Liner because of the specific requirements of a rice warehouse such as a flat and accessible terrain.
“As a government agency bound by proper government procurement procedures, it is not easy to find a strategic place to transfer. Much as we would like to move out immediately, we must continue to keep in mind the food security requirements of the entire province of Benguet, including Baguio City,” said Dalisay.
Dalisay said an alternative site for the NFA office and rice warehouse had been identified but it would require cutting down several trees which, he said would not sit well with environmental groups. Gil Cabacungan
Wurtzbach at PLDT
IT’S going to be a a true “homecoming” for Pia Alonzo Wurtzbach, who recently made headlines as the winner of the 2015 Miss Universe pageant.
We’re not just referring to the expected arrival of Wurtzbach on Philippine shores this week. We hear Wurtzbach is also dropping by the head office of Philippine Long Distance Telephone Co. in Makati City on Jan. 27 to meet with its big boss Manuel V. Pangilinan and touch base with the PLDT staff.
Wurtzbach, of course, has some history with the telecommunication giant given that she is an ambassador of unit PLDT Home.
We heard this is a private event, as was the request of the Miss Universe organizers.
In any case, people should expect to see more of Wurtzbach, who has gained fame not just for her beauty and perseverance but also for the grace she exuded in the face of tense, public moments like, say, a crowning mix-up in a life-changing pageant.
We’ll save the usual “abangan” for other items in this space. For Wurtzbach, a warm and robust welcome home should suffice. Miguel R. Camus
LBC dilemma
FOLLOWING the issuance of a court garnishment order on the assets of courier and remittance group LBC Express (and other defendants from the Araneta family and associates), investors are wondering whether the Philippine Stock Exchange will suspend trading on shares of parent firm LBC Express Holdings Inc.
To recall, the Regional Trial Court of Makati issued a preliminary attachment order to cover a P1.8-billion collection claim filed by state-controlled Philippine Deposit Insurance Corp. (PDIC) on behalf of LBC defunct banking affiliate LBC Development Bank. This bank was padlocked by the Bangko Sentral ng Pilipinas in 2011, citing huge advances to LBC Express as the culprit for the thrift bank’s insolvency.
Some stock market veterans think the PSE should suspend trading on LBC following the garnishment order. A stockbroker noted the case of controversial businessman Tony Tiu-led Greenergy Holdings, where trading has been suspended since May 2015 following the Court of Appeals’ order to freeze the bank accounts of the company, subsidiary Sunchamp Real Estate Development Corp. and chair and president Tiu, who was accused of being a “dummy” for some of Vice President Jejomar Binay’s alleged ill-gotten wealth.
“Having your accounts garnished is worse than these accounts being frozen (pending resolution of the case). When it’s frozen, you just can’t use it. If it’s garnished, the assets are no longer yours,” the broker added, noting that the assets had been ordered seized to satisfy liabilities.
In the case of Greenergy, however, the company itself sought the trading suspension, citing the need to prevent trading volatility that might cause investor panic.
From what we gathered, the PSE is not keen on suspending shares of LBC for lack of legal grounds to do so based on its internal assessment of the court order at the moment.
The exchange, however, vowed to continue monitoring the situation, including any action that Philippine Depository and Trust Corp. may take as custodian of shares owned by the companies and Araneta family members cited as defendants in this case. Doris Dumlao-Abadilla
