The latest on Landco

The latest word is that AB Holdings Corporation was given until January 17 next year to complete its offer to buy out Metro Pacific Investment Corp.’s (MPIC) stake in property development firm Landco.

Reason given by ABHC for the request to amend the first extended call option period of Nov. 10 to Dec. 10, 2008 to Nov. 17-Dec. 17 and thus a new completion period of Jan. 17, is that it is currently in serious talks with investors that can provide the needed funds for the buyout.

We were earlier told that the extension is necessary because the review of Landco’s valuation is still being finalized. The book value of MPIC has been placed before at about P1.32 billion._

MPIC owns 51 percent of Landco, and AB Holdings, the remaining 49 percent stake.

_MPIC, chaired by Manny Pangilinan, earlier offered to buy out AB’s 39 percent stake, leaving the latter with 10 percent. This will raise MPIC’s shareholdings in the company to 90 percent.

The buyout however is far from being hostile. MPIC acknowledges the huge role which the Xeres-Burgos family has played to make Landco highly successful. And of course, Manny Pangilinan is the ninong of Alby Xeres-Burgos. Sources close to the talks say that the offer made by MVP is very attractive, to say the least.

It is a plain and simple decision on how to move forward with the business. MPIC believes that the time is right for Landco to have a bigger presence in the real estate market. It cannot forever remain a niche player, if it wants to play alongside giants like SM Properties, Megaworld, Filinvest, the property group of Manny Villar, and fast-rising big-time players like Eton of business tycoon Lucio Tan, Metrobank subsidiary Federal Land, and of course old players like Fil-Estate and Sta. Lucia._

And people who claim to know Manny Pangilinan believe that MPIC will not accept the fact that its property company Landco remains a relatively small player in an industry that has so much potential. But of course, a decision to become a big player in the Philippine real estate sector does not come cheap. If MPIC will invest billions of pesos more in Landco, then it wants to have more control over how its money is spent.

Another scam in the making?

Some people are keeping their fingers crossed that when Malacañang decided to utilize P4 billion in royalty taxes from the Malampaya natural gas project to support the rice self-sufficiency program of the Department of Agriculture, the money better be spent wisely.

Whether we like it or not, the taxes being levied on the natural gas project add to our electricity bills. In short, we are paying more to make our farmers more productive.

The royalty tax is a huge source of revenue for the government, averaging $1 billion a year. In fact, while Filipinos were groaning from the weight of soaring gas prices, government was enjoying itself in collecting a windfall from this exaction.

From the Malacañang announcement, one suspects that the high royalty tax will linger for quite some time for the benefit of the new farm assistance program of the Department of Agriculture.

While we want to give our government the benefit of the doubts, those of us who pay our taxes dutifully (compensation income earners do not of course have a choice because our tax obligations are automatically withheld by our employers) want to make sure that the funds do not mysteriously disappear.

History made many of us skeptics. Just look at the fertilizer assistance program.The government was supposed to distribute the fertilizers to the farmers as part of a program to increase their rice output. Had this 2004 program been properly implemented, it could have helped mitigate the rice crisis that we are currently facing.

But as it turned out, P728 million in fertilizer funds went elsewhere, some say into the pockets of our political leaders.

There was also the swine program in 2004. Under this P3-billion program, government was supposed to help farmers set up livelihood projects by providing them with piglets and feeds, or with loans to set up and run small piggeries.

But like the fertilizer program, the swine program turned out to be another scam in the same election year. Funds simply disappeared and even the Commission on Audit is having a hard time tracing them.

As a reporter who covered the agriculture beat for many years, I witnessed many of these scams, including multi-billion pesos in World Bank loans for coconut farmers supposedly for a fertilization program that somehow managed to fertilize pockets, not farms; import and export quotas that benefited legislators and government officials, to name a few.

Our farmers, supposedly the beneficiaries of billions in assistance, remain poor because these benefits never reach them.

Unfortunately, our government’s assistance programs for farmers sometimes get hijacked; money intended for the farmers would mysteriously disappear and end up elsewhere.

Jocjoc Bolante, one of the most prominent players in both the fertilizer and swine fiasco, does not want to talk. He tried to escape a Senate probe here by going abroad, but he was detained in the US and later deported back to the Philippines.

And notwithstanding the President’s dramatic pronouncements to run after big-time scalawags in government, not one of them has ended up in jail.

When Meralco decided to return our electric meter deposit, how did government, particularly the Bureau of Internal Revenue, react? Tax us for the windfall. All this time, what has government done to lower electricity rates? Blame the Lopezes? What about Napocor and its huge subsidies? What has been done about the charges of coal overpricing among other alleged anomalies at the state-run GOCC? Nothing.

There is so much that government can do to shore up its resources instead of taxing us more. But of course, many heads will roll if government is serious enough in doing its job.

For comments, e-mail at [email protected]