Government eyeing tax break for planned lease of Navy HQ

MANILA, Philippines - The government is eyeing tax perks for the foreign group that has expressed interest in leasing the site of the Navy headquarters on Roxas Boulevard for $100 million monthly.

“If we need to assume the tax then we will do so but the advisers are still working on it,” Finance Secretary Cesar Purisima told Palace reporters yesterday on the sidelines of the 106th founding anniversary of the Bureau of Internal Revenue.

Purisima declined to give more details of the plan, but pointed out that “everything is preliminary,” and that all the necessary processes have to be strictly observed before a deal can be made. Earlier, Finance officials said they might have to review the tax incentives for foreign investors.

“We have to structure it so that it’s easy for foreign investors to invest in global peso bonds and I think that’s very clear,” Purisima explained.

“Obviously, just like in any privatization or any contract, we have to follow certain processes and at the point when we’re ready, we’ll disclose the process that we’re going to follow,” he added.

In his State of the Nation Address, President Aquino said the country’s 32 World War II-era patrol boats would be replaced in due time, using proceeds from the proposed lease of the Navy property to a foreign investor. If a lease deal is finalized, the Navy will transfer its headquarters to Camp Aguinaldo in Quezon City. The country has 36,000 nautical miles of coastline.

Mr. Aquino said he found the offer difficult to turn down.

Also being eyed for lease is the Naval Station in Fort Bonifacio in Taguig.

“They will take care of the funding necessary to transfer the Navy headquarters to Camp Aguinaldo. Immediately, we will be given $100 million. Furthermore, they will give us a portion of their profits from their businesses that would occupy the land they will rent,” the President said in his speech.

“In short, we will meet our needs without spending, and we will also earn. There have already been many proposals from local and foreign investors to provide for our various needs,” he said.