Camp John Hay still owes government P2.4B in unpaid rentals - BCDA

MANILA, Philippines - Sobrepeña led Camp John Hay Development Corp. (CJHDevco) still owes the government P2.4 billion from uncollected lease rentals arising from a contract to develop the 247-hectare Camp John Hay in Baguio City into a special economic zone, the Bases Conversion Development Authority (BCDA) said yesterday.

In a press statement, BCDA said that the reasons given by CJHDevco for its non payment are “incredible, malicious, and dishonest.”

It also brushed aside as “simply unacceptable” CJHDevco’s allegations that the funds due BCDA has been deposited in an escrow account.

The state-run BCDA insisted that no such escrow account has been established in trust for BCDA. To the contrary, CJHDevco refuses to put up the escrow account for the Security Agreement required under the 2008 Restructured Memorandum of Agreement (RMOA).

BCDA vice president for Planning and Business Development Dean Santiago pointed out that the BCDA has virtually exhausted all options for a mutually acceptable solution to the standoff, including three restructuring agreements over a nine-year period.

He said under Section 3 of the 2008 RMOA, CJHDevco, as the lessee, acknowledged and agreed to settle its obligations amounting to P2.686 billion inclusive of interest.

CJHDevco expressly acknowledged its indebtedness to BCDA under Section 3 of the 2008 RMOA.

Santiago said that of CJHDevco’s acknowledged debt of P2.686 billion, CJHDevco has paid BCDA P100 million upon signing of the 2008 RMOA. He also said that CJHDevco paid BCDA P180 million by way of dacion en pago of various properties. “This brings CJHDevco’s debt to government to P2.4 billion,” Santiago explained.

Santiago further explained that the P2.4 billion was the sum of CJHDevco’s unpaid pro-rate rentals from 1999 to June 30, 2008, when the lease contract was last restructured. Under the RMOA, CJHDevco was obligated to pay the BCDA P2.68 billion over a 15-year period, with a three-year moratorium.