Lost in translation: Masungi developer flagged costs, DENR saw demand for payment

MANILA, Philippines — Environment Secretary Maria Antonia Yulo-Loyzaga and the Dumaliang family, who developed the Masungi Georeserve, may have had a misunderstanding. 

For years, Masungi’s developers submitted letters to the Department of Environment and Natural Resources (DENR) informing them of the costs they incurred to preserve Lot 10 — a 270-hectare area part of the protected Upper Marikina River Basin Watershed. 

Yulo-Loyzaga, however, said she “doesn’t respond when a legal context exists,” interpreting the letters as demands for payment from the DENR due to the family’s use of the word “damages.”

The Dumaliangs clarified that the letters were not demands for payment, but rather a plea for the DENR to fulfill its responsibilities, as they were incurring losses that could ultimately be shouldered by the government.

During a Senate hearing on Friday, April 11, Sen. Alan Peter Cayetano opened a motu propio inquiry into the 2002 supplemental agreement between the DENR and Masungi's contractor. 

This was the agreement the DENR canceled on March 7, along with its decision to evict the Masungi Georeserve Foundation from Lot 10. The contractor only received the letter on March 10. 

What the 2002 agreement is. The deal, meant to develop homes for government workers, was an extension of a 1997 joint venture with the Dumaliang family’s construction firm, Blue Star Construction and Development Corp. 

However, no homes have been built as agreed, and the DENR and Masungi Georeserve continue to trade arguments over how the other party violated the contracts’ terms.

RELATED: DENR ends housing project contract with Masungi Georeserve founder, issues vacate order

This prompted an investigation by the DENR, which took nearly a decade before it released its findings this year and ultimately ended the agreement.

DENR's silence

The Dumaliang family has since argued that due process was lacking. They said they consistently reached out to Yulo-Loyzaga and the agency to discuss various concerns but received no response.

DENR Assistant Secretary Norlito Eneran countered that Masungi’s management was given due process. He said the investigation team met with the Dumaliangs and shared its findings before the contract was canceled.

But Billie Dumaliang, trustee of the Masungi Georeserve Foundation, pushed back, saying it was their family who initiated the meetings. 

While she confirmed they had met with Eneran “a few times,” she clarified that those meetings happened only because the Dumaliangs had requested them.

Ben Dumaliang, Billie’s father and Blue Star owner, also said they “never got a copy” of the DENR’s investigation report or the Commission on Audit (COA) findings that supposedly triggered the probe and contract termination.

He added that even the oversight committee, which the contract required, had not been formed. “With regards to access, it was DENR who abandoned the project. There was supposed to be an oversight committee and secretariat who should be talking to the developer.” 

When Cayetano asked who coordinates communication between Blue Star and the DENR, Ben said there’s currently no one. He added that whenever they try to reach out, the agency avoids engaging with them.

“I requested Secretary Loyzaga many times to convene the oversight committee to meet with us. She avoided adamantly,” he added.

The DENR said the issue wasn’t that the committee was never convened, but that it simply wasn’t the “platform” the agency had “used to deal with them” over the past administrations.

The misunderstanding

Cayetano then asked if the government had “ghosted them” over the past 10 to 20 years. 

In response, Yulo-Loyzaga explained that upon taking office, she received a letter from the Dumaliang family claiming “damages” between P800 million and P1 billion, which she interpreted as involving legal obligation, and therefore, no further discussions took place.

She also criticized the Masungi Georeserve Foundation’s “use of politically influential persons” to reach her, saying she questions the motivation of those who do so. 

“Given those two circumstances, I do not respond to requests within the context of my own service,” Yulo-Loyzaga said. 

Billie clarified that there is no truth to the claims that they are asking for P800 million to P1 billion. Referring to documents Blue Star sent to the DENR from 2021 to 2025, she said that the letters simply “advised” the agency of the expenses incurred by the firm “in connection with the unrealized delivery of Lot 10 by DENR.”

“So, hindi po ito bayaran niyo kami. Ang clear demand po dito ay gawin niyo ang obligasyon niyo,” she said. (So, this is not about paying us. The clear demand here is for you to fulfill your obligation.)

She explained that the P800 million figure is based on the “unrealized potential” of the development, including the equipment that, according to Ben, had been left unused for more than a decade.

Why no homes were built

This is where Blue Star argued that under the joint venture agreement, the DENR was responsible for clearing Lot 10 of illegal occupants and claimants before turning it over for development.

Since this was not fulfilled, the firm said it instead carried out conservation and reforestation efforts on the area, which is home to limestone karst formations and rich biodiversity.

“Naging part ng plano for Lot 10 is to conserve. So habang naghihintay po ‘yung Blue Star na ma-clear ‘yung area ng DENR from illegal occupants and claimants, inaalagaan ito ng Blue Star,” Billie said. 

(Part of the plan for Lot 10 was conservation. So while Blue Star was waiting for the DENR to clear the area of illegal occupants and claimants, it took care of the land.)

Ben further explained that the letters included their monthly statements of account to show their losses. He also said had offered to file cases against the illegal occupants, but the DENR took no action.

“At itong pera na ito, actually, hindi lang sa amin ang cost, kundi eventually sa gobyerno din. So, please, gawin nyo na ‘yung trabaho niyo,” he added. 

(And this money, actually, is not just our cost, but eventually, it will also be the government's. So, please, do your job.)

Before concluding the first hearing, Cayetano asked both parties to appoint two to three representatives for a technical working group to present all documents and arguments. He scheduled a meeting for April 14, ahead of Holy Week.