AN OFFICIAL of a government-owned corporation (GOCC) in Northern Mindanao dispelled the exposé of a former congressman that more than P1 billion in taxes and other obligations owed by establishments, including two National Government agencies, operating within the industrial economic zone in Misamis Oriental have remained uncollected.
Leo Tereso Magno, the administrator of the Phividec Industrial Authority (PIA)-Misamis Oriental, said the allegation made by former Cagayan de Oro Representative Jose Benjamin Benlado put their locators in a bad light.
In a press conference held recently, Benaldo revealed that some agencies and companies with operations within the Phividec Industrial Estate in Tagoloan and Villanueva town have incurred about P1.064 billion in unpaid real property taxes, rentals and port fees.
Benaldo is recently appointed as a member of the PIA-MO board of directors. One of the issues he addressed when he assumed the position was the reported uncollected payments owed by these locators to the government.
The former lawmaker was also quoted as threatening these locators to pay up or get out of the economic zone.
The PIA-Misamis Oriental, the only industrial economic zone in Northern Mindanao, manages about 3,500 hectares of real estate in Tagoloan and Villanueva including the neighboring town of Jasaan, and housing about 34 manufacturing facilities and 68 service firms.
As a GOCC, Phividec was created on August 13, 1974 through a Presidential Decree as amended by Presidential Decree 1491.
The locators, Magno said, were “embarrassed despite the fact that their listed liabilities have yet to be legally determined and resolved.”
“While we appreciate the enthusiasm of Mr. Benaldo in trying to enforce the proper collection of taxes, the same must not be done to shame and embarrass the locators of Phividec, who have invested significant amounts of capital and introduced numerous jobs in the region,” Magno said over the weekend.
Benaldo’s report, he added, was “prematurely made without consultation and study of the transactional history of the locators involved. Thus, the locators were needlessly embarrassed despite the fact that their listed liabilities have yet to be legally determined and resolved.”
Earlier, Benaldo revealed to reporters that the unpaid obligations the locators have yet to settle amounted to P1,064,720,370.07.
Among the top 10 locators listed by Benaldo with outstanding payables are Steag State Power Inc., which he said owes the government P447.212 million; Mindanao International Container Terminal (MICT), P342.438 million; Ferrochrome, P310.381 million; Philippine Sinter Corp., P131.442 million; Unionbank, P92.378 million; Top Forest, P64.214 million; Vicmar, P30.816 million; National Power Corp., P29.699 million; Axent, P29.423 million; Department of Public Works and Highways under the “Tulay ng Pangulo” program, P13.349 million.
Had these locators made the payments, Benaldo said the amount could have been used to build 1,000 health centers, 2,000 classrooms or 2,500 houses for Filipino displaced in Marawi, or 1,000 beneficiaries for livelihood programs.
But Magno urged Benaldo to look deeper into the issue to fully understand the context of the allegation since some of the alleged tax debts purportedly owed by the locators had already been settled or in the process of being resolved through legal means.
He said that the real property tax liability of Steag, for instance, has already been condoned and reduced by the Office of the President (OP) through executive order 19.
After a careful study made by the OP of the legal and factual aspects of the issue involving said company, it was determined that that the real property taxes being charged against the independent power producers such as Steag has been contractually assumed by the Napocor, the Power Sector Assets and Liabilities Management Corp. (Psalm) and other GOCCs, paying these would impose massive direct liabilities on the part of the GOCCs, Magno noted.
“An improper enforcement of this tax would place the government in breach of its international contractual obligations and have a direct impact on the costs of electricity in Mindanao,” he added.
Another locator, the MICT, through the Mindanao International Container Services Inc. (MICTSI), should not be paying real property taxes as it actually owned by Phividec, Magno said.
“The Office of the Government Corporate Counsel has determined that MICTSI is not liable for the payment of real property taxes over the land and equipment owned by Phividec itself,” he said.
The MICTSI, Magno added, is the operator of the Phividec-owned MICT. All physical assets and equipment in the MICT are owned by Phividec and MICTSI merely brings in the technical personnel for the efficient management and operation of the port.
“Thus the real property tax imposed was wrongfully assessed as PHIVIDEC is the beneficial owner of the port itself,” Magno said.
The cases of the other locators mentioned by Benaldo are still pending in court or in other government agencies.
Of the more than P1 billion reported by Benaldo, Magno said P400 million of it was “erroneously assessed and P447 million has been condoned by the Office of the President. The other accounts are pending litigation and are being addressed for its eventual resolution through a legal process.”
He said the officers and employees of Phividec continuously strive to bring in investments to contribute in the economic growth of the region and the creation of job opportunities for the people of Mindanao.
“We seek to provide a balance to the reasonable return of investments of the locators and the interests of the state in the proper collection of taxes with the end goal of being a catalyst for economic and social development of Mindanao and the rest of the country,” Magno added.
Published in the SunStar Cagayan de Oro newspaper on July 17, 2017.