BIZ BUZZ: PNOC vs Petron: P100B in property assets at stake

The government stands to lose P100 billion worth of real estate assets—summing up to 357 hectares (ha) comprising refinery lots in Bataan, 23 bulk plant sites and 66 service station lots across the country—that the courts had ordered state-owned Philippine National Oil Co. (PNOC) to give back to Petron Corp. following a leasing dispute during the previous administration.

This is according to a last-ditch appeal filed by PNOC’s legal counsel, the Office of the Government Corporate Counsel, with the Supreme Court.

“The reconveyance to Petron of those land assets, valued over P100 billion, would take the assets away from the government, which did not sell them, and give the assets to the private sector, which did not pay for them,” PNOC said in its motion for leave to file supplemental motion for reconsideration dated June 26.

The PNOC argued that the return of these assets to Petron would negate the Supreme Court’s 1995 en banc ruling Bagatsing vs. Committee on Privatization, which held that the 357 ha of land had been “declared and transferred” to PNOC as “property dividends” and not part of the privatization of Petron (via sale to Saudi Aramco on public offering) in 1994.

The parcels of land were transferred by Petron to PNOC in 1993 when the former was still 100-percent owned by the latter. Petron continued to lease them thereafter but in 2017, a dispute erupted as PNOC refused to honor renewal clauses.

Petron, now part of the San Miguel conglomerate, sued PNOC at the Regional Trial Court of Mandaluyong, complaining about a fundamental breach of agreements. It thereafter moved to regain control of the assets. In 2019, the trial court ruled in favor of Petron’s petition to rescind the 1993 deeds of conveyance and ordered PNOC to return the assets. Petron was ordered to pay P143 million (with legal interest from 1993), representing the book value of the litigated properties at the time of the property dividend declaration.

Then in 2022, the Court of Appeals denied Petron’s appeal to return the lease payments and likewise dismissed PNOC’s motion for reconsideration. Already enjoying the upper hand with the reconveyance order, Petron no longer contested the court. PNOC, for its part, filed a petition for review in December 2022, which was denied by the Supreme Court in a resolution dated July 25, 2023. The high court said that PNOC failed to sufficiently show that the Court of Appeals had committed any reversible error in the challenged decision.

In December 2023, PNOC filed a motion for reconsideration and petitioned to elevate the case to the Supreme Court en banc.

“A dividend declaration is a unilateral action of a corporation, not a contract resulting from a meeting of minds that is subject to rescission,” PNOC’s petition said. Petron has yet to reply to our query on the latest PNOC filing as of press time. —Doris Dumlao-Abadilla

The Farm harvests awards

Luxury medical and wellness resort The Farm at San Benito recently harvested three top awards from the Travel + Leisure Luxury Awards 2024—Best Hotel Spa in the Philippines, Best Beach Island Upcountry Resort in the Philippines, and Best Hotel General Manager, Philippines.

The Lipa City-based eco-luxury facility says these awards cement its reputation as a market leader in wellness tourism, and recognize its commitment to excellence in service, management and guest experience.

The Farm is particularly proud of the award received by Preet Singh, whose leadership and 40-year experience in luxury hospitality it credits for the high standards in service, guest satisfaction and offerings that it has become known for both here and abroad.

“It is an honor to be recognized as the Best General Manager. This award is a reflection of our entire team’s hard work and dedication to creating memorable experiences for our guests. We remain committed to continuously enhancing our services and maintaining The Farm’s status as a leading holistic medical wellness destination,” Singh said.

The Farm at San Benito—within a 52-hectare property with a view of the Malarayat mountains—is a member of CG Hospitality Group, itself a part of the Chaudhary Group based in Kathmandu, Nepal.

In a statement, Jennifer Sanvictores, Global Head of Sales, Marketing & Communications, said: “These accolades are a testament to our unwavering commitment to providing our guests with transformative and healing experiences. At The Farm, we strive to create a sanctuary where holistic wellness is seamlessly integrated with luxury and natural beauty. We are immensely proud of our team, whose dedication and passion have made this achievement possible.” —Tina Arceo-Dumlao

DA ‘dream organization’ complete

Agriculture Secretary Francisco Tiu Laurel Jr. has finally achieved his “dream organization” to navigate challenging times in the Philippine agriculture sector.

Tiu Laurel even joked about pirating many personnel in the Department of Agriculture (DA) once his term ends in four years given their competencies and skills.

“I have a dream organization. There are many capable individuals (in the Department of Agriculture),” he told reporters.

A childhood friend of President Ferdinand Marcos Jr. and one of his campaign contributors, Tiu Laurel assumed the top DA post in November last year just when the country was dealing with an El Niño-induced dry spell and external price and supply shocks.At first, he was hesitant to accept the president’s offer and would rather focus on their family’s business—the Frabelle Group of Companies.

Tiu Laurel said he declined the offer twice coursed through the President’s people. Eventually, he realized it was a “calling” to serve the government when Marcos personally approached him to handle the agriculture portfolio. —Jordeene B. Lagare