The country’s biggest pension fund on Tuesday said it would 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 more than 67 hectares—is occupied by ports and gaming tycoon Enrique Razon Jr.’s International Container Terminal Services Inc. (ICTSI), which, in turn, pays rent to the Philippine Ports Authority (PPA) for the use of the land.
In a press briefing, however, Government Service Insurance System (GSIS) President and General Manager Jesus Clint Aranas said he was neither aware of or a party to the arrangement between ICTSI and the PPA, stressing only that the state pension system in whose name the property was titled did not benefit from it.
“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 the 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 had been occupying since the 1970s.
“That’s almost P1 billion a year in rent payments,” said Aranas, who added that the GSIS was also 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 was an “internal government issue.”
Company officials explained to the Inquirer that control of the disputed property by the ports authority was covered years ago by a presidential decree and further affirmed by another court case.
The GSIS chief said he was willing to sit down with either officials of the PPA or ICTSI to iron out their differences, but noted that neither of the two parties on the opposite side of the dispute had been willing to talk to the pension fund 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 planned to dispose of the property as early as last year, but postponed the process pending a readjustment by tax authorities of the outdated zonal valuation for the area. The readjustment that was done last month resulted in the baseline price of land there rising from P25.5 billion to its current value of at least P33.6 billion.
A nearby GSIS property of almost 11 ha, 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 the GSIS to allow the port operator to consolidate ownership of the property it occupies.