Baseco posts 750% income growth in 2011

MANILA, Philippines - The Bataan Shipyard and Engineering Co. Inc. (Baseco), a shipbuilding and ship repair corporation controlled by the Presidential Commission on Good Government (PCGG), posted a 750-percent hike in income, allowing it to remit a substantial sum to the National Government’s coffers for the first time since it was sequestered in 1986.

Lawyer Gerard Mosquera, PCGG commissioner for litigation and tasked by PCGG chairman Andres “Andy” Bautista to supervise the operations of Baseco last year, said the ship repair and engineering company had booked a net income of P17 million as of the end of 2011, a substantial increase from the net income of P2 million it earned in 2010, and a complete reversal from the net loss of P35 million in 2009.  

Mosquera, who sits as chairman of Baseco, said the P17-million income was generated from leasing Engineering Island in Port Area, Manila and a 300-hectare property co-owned with the provincial government of Bataan.

Mosquera said that when the new PCGG, led by Bautista, assumed control of Baseco in June 2011, the new management team instituted reform measures to preserve the assets of the corporation, increase revenue and reduce costs. 

Among the measures implemented were reduction of excessive directors’ fees and employees’ compensation, suspension of onerous contracts, investigation of questionable transactions and institution of internal control measures.    

The revenue-enhancing and cost-cutting measures implemented resulted in a reduction of administrative and operational expenses by 18 percent from P40.89 million to 33.70 million with gross revenues increasing by 16 percent from P43 million to P50 million. 

Directors’ fees, in particular, were reduced to 10 percent of previous levels in full compliance with executive issuances limiting director’s compensation.

In December 2011, Baseco opened a trust account with the National Treasury and remitted the amount of P15 million, the first since the corporation was sequestered in 1986. Starting in 2012, regular reports and updates on the financial condition and status of the corporation will be submitted to the Sandiganbayan, Mosquera added.

Baseco was originally incorporated in 1972 and subsequently acquired by a brother-in-law of the late deposed Ferdinand Marcos, Alfredo “Bejo” Romualdez.  It was sequestered in 1986 on a prima facie finding that it constitutes ill-gotten wealth of Romualdez, a brother of former First Lady Imelda Romualdez-Marcos.  It is presently under custodia legis and the subject matter of Sandiganbayan Civil Case 10.

To enhance accountability, the new Baseco management has requested the Commission on Audit (COA) to deploy a special audit team to conduct a comprehensive fraud audit of the books of accounts and transactions of Baseco and recommend appropriate courses of action.