The GSIS Complex in Pasay (Photo from the GSIS Facebook account)
MANILA, Philippines — The Government Service Insurance System (GSIS), the country’s largest pension fund, will sell two parcels of prime real estate in Manila’s Port Area worth a combined P37.4 billion in an effort to mobilize its large portfolio of nonperforming assets.
There’s only one problem: The larger of the two properties — covering an area of over 67 hectares — is currently occupied by the International Container Terminal Services Inc. ICTSI) of ports and gaming tycoon Enrique Razon Jr.
In turn, ICTSI pays rent to the Philippine Ports Authority (PPA) for the use of the land.
In a press briefing, however, Jesus Clint Aranas, GSIS president and general manager, said he was neither aware of or a party to the arrangement between ICTSI and the PPA He stressed only that the GSIS, under whose name the property is titled, had not benefited from the deal.
“I have a responsibility to the members of the GSIS, and I would be remiss in [performing] my duty to them if I let this pass,” he said. “This is not even the government’s money but the money of the GSIS members who are government employees.”
Officials of GSIS — which manages P1.1 trillion in assets of an estimated 1.5 million members — said that ICTSI should be paying the pension fund at least P80 million in monthly rent for the land that the port operator has been occupying since the 1970s.
“That’s almost P1 billion a year in rent payments,” said Aranas, who added that the GSIS was ready to initiate legal proceedings to collect back rental from ICTSI.
Sought for comment on the issue, Razon told the Inquirer that the billing dispute as an “internal government issue.”
Company officials explained to the Inquirer that control of the disputed property by the PPA was covered years ago by a presidential decree and further affirmed by another court case.
The GSIS chief said he would be willing to sit down with officials of the PPA or ICTSI to iron out their differences. But he noted that neither of the two parties on the opposite side of the dispute had been willing to talk to GSIS despite seven demand letters sent over the last few months.
“All our letters were ignored,” Aranas said. “We don’t know if they’re playing deaf.”
The GSIS had been planning to dispose of this property as early as last year, but it postponed the process pending a readjustment by tax authorities of the outdated zonal valuation for the area.
The readjustment that was done last May resulted in the baseline price of the land rising from P25.5 billion to its current value of at least P33.6 billion.
A nearby GSIS property of almost 11 hectares, meanwhile, will be allocated for socialized housing, given that it is currently occupied by informal settlers, Aranas said. This property’s zonal valuation was also raised last month, resulting in the property’s value to rise from P412.8 million to P3.82 billion.
“These properties will be sold as is, where is,” he said, adding that he would even welcome the possibility of ICTSI purchasing the land from GSIS to allow the port operator to consolidate ownership of the property it occupies.
(Editor: Alexander T. Magno)