The Privatization and Management Office (PMO) warned that the pieces of mining equipment that the city government of Surigao is scheduled to auction off next week could not be sold as the government was pursuing ownership through a case pending in court.
Karen Singson, chief of the PMO, which is part of the Department of Finance, said in a statement that Philnico Industrial Corp. (PIC) turned over the equipment to the government in 1999.
Back then, Malacañang acquired the nickel refinery plant in Surigao and deemed that the machines were no longer needed.
Singson explained that the turnover of the machinery from PIC was part of the restructuring of the payment terms for the purchase price of the government’s shares in Nonoc Mining and Industrial Corp.
This means the equipment formed part of the $263.8-million share sale transaction between the government and PIC in 1996, of which only $1.25 million has been paid so far.
However, the City Hall in Surigao is insisting that the equipment are subject to real property tax and that the government owes it a total of P200.75 million in back taxes from 2000 to 2010.
The city government is putting the equipment up for auction to recoup what it says are unpaid taxes.
Singson said the PMO brought the matter before the Surigao Regional Trial Court Branch 29, which issued on September 15 an injunction against the city government.
Based on the court order, “the City of Surigao has been ordered not to proceed with any sale or auction of the Nonoc assets until the case for injunction has been heard and resolved,” Singson said.
She said the pieces of equipment were owned by government and should not be subject to real property tax.
Singson said the City Hall’s insistence on pushing through with the auction “forestalls rather than aids” the efforts of the government to recover the PIC’s balance for its purchase of the state’s Nonoc stake.