PCGG lost P1.2 B in 'Payanig sa Pasig' lease deals

MANILA, Philippines - The Presidential Commission on Good Government (PCGG) said a real estate holding firm, surrendered to the government by a crony of the late strongman Ferdinand Marcos, lost more than P1.2 billion as a result of anomalous lease agreements forged by previous executives for portions of the 18.5-hectare “Payanig sa Pasig” property in the past 10 years, PCGG chairman Andres Bautista said yesterday.

Bautista said that an audit of the deals made by Independent Realty Corp. Group of Companies officials appointed during the Arroyo administration found a “legacy of mismanagement and incompetence” and uncovered a number of “irregularities and questionable transactions.”

He said that the bulk of the questionable deals by the former IRC Group executives were in lease agreements they signed for portions of the Payanig sa Pasig property, which generated a measly P6 million a month in rental income.

“It is important to note, however, this is only 22 percent of the total income of the property because roughly 78 percent of the total leasable area is occupied without lawful authority,” Bautista said in a report.

He said while the property measures 184,970 square meters, 144,276.6 square meters are occupied by allegedly illegal occupants or non-paying former lessees: the Metrowalk, Umale, Zapanta, MC Home Depot, and the City Golf groups.

According to Bautista, two legal occupants – Westpoint Corp., which operates the Ortigas Home Depot, and DDBS, a billboard leasing contractor – were found to have signed contracts with rental rates lower than the prevailing market rental rates in the area.

“There is a clear need to review and re-negotiate the lease contracts with Westpoint Corp. and DDBS, particularly with view towards increasing rental rates,” he said.

The IRC and several affiliate and associate real estate holding companies, lumped together by the PCGG and dubbed the IRC Group of Companies, include some 27 corporations that were surrendered by the late Filipino-Chinese businessman and self-confessed Marcos dummy Jose Yao Campos to the PCGG in 1987, as assets he held in trust for the deposed president.