Government’s erratic regulatory regime has been a constant deal-breaker for big-time investors in the Philippines.
As stressed by former socio-economic planning secretary Cielito Habito “Rules are rules. They are there for good reason, and not meant to be set aside or broken when convenient.”
In fact, flip-flopping regulatory policies have exasperated the investment community for so long that the country’s top business groups—among them the Makati Business Club, Management Association of the Philippines, American Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines and the Japanese Chamber of Commerce of the Philippines Inc.—saw it fit last year to come out with a joint statement reminding the Aquino administration that:
“Consistency and predictability in policy and adherence to rules, among other factors, form the bedrock of investor confidence in any economy. In light of the significant attention that the Philippines has been gaining from the international and domestic investing community, it is our firm belief that the country must hold fast to these principles in order to sustain the gains that the country has achieved in the past four years.”
But what happens when the issue is neither inconstancy nor unpredictability but no regulation at all?
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For consumer activist Rodolfo Javellana Jr., such a non-performance of official duty smacks of plunder and largescale graft, considering that his perceived inaction for almost three decades now has to do with a largely undeveloped public property worth over P41 billion, thanks to one agency of a government perenially short of funds to bankroll its priority programs and projects.
Hence, Javellana’s t decision to file plunder and graft charges before the Office of the Ombudsman against incumbent and former executives of the Public Estates Authority or PEA (now the Philippine Reclamation Authority or PRA) over their alleged “conspiracy” with officers of a private developer to defraud the government in the sale for a pittance in 1988 of a 41-hectare reclamation property on the seaside of Roxas Boulevard in Parañaque City.
The head of the United Filipino Consumers and Commuters (UFCC) and the Water For All Refund Movement (WARM)—two civil society groups that have been at the forefront of public opposition to, among others, train fare and water rate hikes in the metropolis—Javellana has included in his rap sheet the officers of the Manila Bay Development Corp. (MBDC) who, he claimed, have violated with past and incumbent PEA executives the anti-plunder and anti-graft laws (Republic Act No. 3019 and RA 7080, respectively) over the MBDC’s failure to develop this estate next to the Cavite Expressway (Cavitex).
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A reading of the plunder and graft complaint shows that what had provoked Javellana is that there has been no development in this property now known as Central Business Park II, 30 years after PEA and MBDC signed a deed of sale. Javellana believes this reeks of a scam worthy of a plunder case, given that the agency has done nothing all these years to take back the business park, or at the very least take punitive action against the private developer, when this reclamation property was sold at a bargain in 1988 for just P470 million, on condition that MBDC would develop it into a commercial-cum-shopping complex in five years’ time.
Certain quarters speculate that this 41-hectare property is actually worth a lot more than P41 billion, as it is on the southernmost tip of one of Metro Manila’s “hottest” districts nowadays that includes the City of Dreams complex, Solaire Resort and Casino and SM’s Mall of Asia.
Javellana believes this no-regulation policy smells fishy like the “biggest scam” ever in terms of public asset disposition, more so for a government that needs all the resources it can get to fund its priority programs.
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In his 14-page Complaint-Affidavit, Javellana tackles the “conspiracy” to defraud the government and the Filipino people of expected accumulated earnings from what is probably the country’s “biggest scam of asset disposition,” involving the Absolute Deed of Sale covering MBDC’s Central Business Park II.
He notes in the affidavit-complaint that this deed of sale has proven to be “grossly disadvantageous” to the government and the people because:
MBDC has till now reneged on its commitment under the 1998 agreement to acquire the lot for a relatively small amount, on condition that this firm would fully develop it into a business-commercial complex in five years’ time; and
Past and incumbent PEA management and its Board have surprisingly done nothing to take punitive steps against MBDC such as cancelling the contract for this serious breach.
Respondents in this plunder-graft case are former PEA general manager Eduardo Zialcita, who executed the deed of sale in 1988, along with incumbent PEA chairman Roberto Muldong, general manager Peter Anthony Abaya, and PEA Board directors Virgilio Ambion, Manuel Medina, Edilberto de Jesus, Reynaldo Robles and Rene Enrique Silos.
Also respondents in the plunder-graft charge are MBDC president George Chua, who signed the contract with Zialcita in 1988, and the unnamed board directors of this private developer.
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Although this anomalous deal was sealed in 1988 yet, Javellana pointed out in his affidavit-complaint that it is not covered by the mandatory 10-year prescription period for the filing of plunder charges against guilty parties and the 20-year prescription period covering graft complaints, because “the Filipino people (only) became aware of the Deed of Sale just recently when the issue became public.”
“Hence, the filing of these cases against the former and present officials of PEA as well as against the owners and officers of MBDC is within the period allowed under the rules,” he said.
Javellana recalled that it was only in 2014 when a paid newspaper advertisement came out urging PEA to take back this property estimated at P41 billion but which MBDC had purchased for only P420 million.
According to Javellana’s charge sheet, Zialcita this Roxas Blvd. reclaimed property totaling 410,467 square meters (sq. m.), by vitue of President Decree No. 1084 that created PEA in 1977 as the overseer-agency for the commercial development of state-owned reclamation estates.
This property was sold to MBDC, on Aug. 23, 1988 for just P1,100 per sq. m., or a total of P472,037,050, on condition that the private firm would develop the lot into a business or commercial complex within five (5) years, based on the approved Parcellery Plans and Urban Design Guidelines attached to both parties’ deed of sale.
However, Javellana claims that MBDC reneged on this commitment to undertake a five-year development program.
“Despite this clear contractual violation of MBDC, however, PEA did nothing to enforce its rights under the Deed of Sale,” Javellana said. “This is gross neglect of duty detrimental to the interests of the government as well as the Filipino people,” in violation of both RA 3019 and RA 7080.
“What is more appalling is that PEA officials seriously neglected their duty to enforce such rights under the Deed of Sale despite MBDC’s continuous non-compliance for more than 21 years,” notes the complaint. “MBDC’s failure to develop the subject property to this date should have compelled PEA through its several General Managers and Board of Directors to cancel the said contract. What are they waiting for?”
By 21 years, Javellana was referring to the over two decades from the time the five-year development plan by MBDC was supposed to have been completed by 1994 up to today under the incumbent PEA management.
It is clear, says Javellana, that this land deal “is manifestly and grossly disadvantageous” to both Government and the Filipino people, owing to this “gross inexcusable negligence” or “wanton and serious omission or non-performance of the duty” of the successive PEA management up to the present in enforcing their agency’s rights under the 1998 deed of sale.
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Stressing that the 1988 sale accord violated RA 3019, Javellana said that “the obligation to demand fulfillment by MBDC of its contractual obligation still stands.”
“Thus,” he said, “the Chairman and members of the Board of Directors of PEA are jointly and continuously committing this particular crime. It is highly suspect and inexplicable why PEA Officers and Board of Directors in the past and now their successors have all remained indifferent with regard to MBDC’s non-compliance.”

“What is outrageously detrimental to the Philippine government and to the Filipino People is the fact that the Philippine government sold this property to MBDC only in the amount of P472 million in exchange for a highly commercialized place originally intended to benefit the government in the form of tax revenues but remained unfulfilled,” he said.
“PEA through its continuous inaction seemingly gives premium to MBDC’s non-compliance as the property is now valued at around P41 billion more or less. Truly, MBDC … is sitting on a veritable gold mine for doing nothing!
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Javellana said the past and incumbent PEA and MBDC officials are guilty of violating the Anti-Graft and Corrupt Practices Act, which declares as unlawful or corrupt, and subject to criminal prosecution, any and all official transactions by public officers that are manifestly or gross disadvantageous to the government.
Worse, he said, these officials have also violated the Anti-Plunder Law, owing to their apparent conspiracy “to commit one goal—to amass billions of pesos at the expense of the Filipino people.”
“Former PEA Officers during their respective tenures of service as General Managers, Chairmen and Members of the Board of Directors and the current PEA Officers all contributed to what could be the biggest scam of asset disposition by the Philippine government with a value of more than P40 billion,” he said in his complaint.
RA 7080 punishes public officers and their accomplices in the private sector who accumulate ill-gotten wealth worth at least P50 million or who commit the fraudulent disposition of state assets worth that same amount and above.
Javellana says that under Article VI of the 1998 deed of sale, MBDC, as the buyer, shall submit to PEA “a Development Plan…and a 5-year Implementation Schedule, within six (6) months from date of receipt by the buyer of the written notice from the seller of the approval of this Deed of Sale by the Office of the President of the Philippines.”
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This accord provision then requires MBDC as the buyer “to develop the subject Property in accordance with the approved Development Plan in the Five-Year Implementation Schedule.”
“Horizontal development shall be completed as far as practicable within two (2) years from the date of the approval of the buyer’s Development Plan,” according to this provision of the deed of sale.
“Vertical Development in accordance with the approved 5-Year Implementation Schedule must be at least sixty percent (6o%) completed by the buyer at the end of the fifth (5th) year as determined by the seller.”
MBDC is further required under Article VI to be “responsible for site preparation, construction of containment walls and land-fill improvements or such other shore protection structures as may be necessary, according to the grade and elevation indicated in the approved Development Plan…The land-fill improvements and construction of the containment walls or shore protection structures shall be finished by the buyer within two (2) years from the date of approval by the seller of the buyer’s Development Plan.”
Javellana said that despite MBDC’s “clear contractual violation, “PEA did nothing to enforce its rights under the. Deed of Sale. This is gross neglect of duty detrimental to the interests of the government as well as the Filipino people.”
“In the first place, PEA through its General Manager and Board of Directors has all the right and obligation to demand from MBDC compliance with Article VI of the Deed of Absolute Sale within the period stated therein (5 year period),” he added
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Source: Malaya