No cost for alarm

Just between us girls, a little known graft case in the Ombudsman recently set off alarm bells in the booming lucrative real estate sector.

Late in the night, from what I heard, the top executive of a huge real estate company called recently an influential senator, supposedly inquiring about the possible implication of the case.

The fear was that this simple case—tagged as “inconsequential” just a couple of years ago—could now trigger a devastating chain reaction in the real estate business.

It involved an outright sale by the PEA (Public Estate Authority) of some 400,000 square meters of reclaimed land some 30 years ago in 1988.

It would thus have a direct bearing on trillions of pesos in real estate investments in the so-called Bay City—the same reclamation area in Manila Bay along Roxas Blvd., straddling the cities of Manila, Pasay and Parañaque.

For instance, the area covered the huge complexes of casinos, hotels and theme parks—the “Entertainment City” owned by government gaming firm Pagcor—not to mention the mushrooming high-rise condos and commercial projects.

Just name the biggest real estate companies in the country, and they most likely dove deep into some projects there.

The complainant in the case was the United Filipino Consumers and Commuters, or UFCCI, a cause-oriented group tagged by media as “militant.”

By the way, its leader, Rodolfo Avellana Jr., has been rather vocal in the campaign called WARM, or Water for All Refund Movement, accusing water utilities of overcharging consumers.

About three years ago, the group filed graft and plunder cases against PEA (now called PRA, or Philippine Reclamation Authority) and Manila Bay Development Corp., or MBDC, owned by the Ng group of Rebisco.

In 1988, PEA sold 400,000 square meters of reclaimed land to MBDC for P1,200 per square meter, which UFCCI called “heavily underpriced.”

The group also claimed MBDC did not meet its commitments in the contract with PEA for the sale.

Still, the case could not bother the quite occupied real estate sector, since it concerned only the deal between PEA and MBDC.

Just this month, however, the group filed a supplement in the Ombudsman, and called for an “early resolution” of the case.

Well, the Ombudsman basically just sat on it for the past three years.

In the supplement—surprise—the group pointed out that the sale by PEA of reclaimed land to a private company was “unconstitutional.”

That would be a cause for alarm for real estate companies in the entire Manila Bay reclamation area.

The group cited the famous Section 3, Article XII in the 1987 Constitution.

It was the same line cited by the landmark decision by Supreme Court in 2002 on the infamous PEA-Amari deal, dubbed as the “grandmother of all scams.”

The Supreme Court ruled once and for all that the deal was null and void.

In effect, the ruling (penned by Senior Associate Justice Antonio Carpio) said that no private company could ever own reclaimed land, because it was alienable land of public domain.

The PEA at that time even theorized that, when the government transferred the land to PEA, it became “private” land, thus freeing it from the ownership constraint on public land.

Thus, the case suggested that, if the Supreme Court voided the PEA-Amari deal, the ruling should apply on the similar deal between PEA and MBDC.

And if the cases would prosper, it would mean alarmingly huge costs among real estate companies.

For the Supreme Court ruling should also have a direct bearing on existing real estate ventures in the reclaimed area— plus of course future projects.

For one, the Manila City Hall already trumpeted a reclamation project by a foreign group called UAA Kinming Development Corp.

It would cover more than 400 hectares of reclaimed land, hailed by the Manila city government as the “biggest and most technologically advanced project.”

Sure—until of course somebody questions its constitutionality!