Chevron Philippines’ 50-year lease agreement soon comes to an end as the government decided to dissolve the state-owned firm which signed the onerous deal.
One day after the expose, Finance Secretary Carlos Dominguez III revealed that the National Development Company (NDC) will shut down Batangas Land Company Incorporated (BLCI) by 2021.
BLCI’s dissolution means that the government can finally take back its 120-hectare property in Batangas leased by Chevron Philippines, formerly known as Caltex Philippines.
“Shortening BLCI’s corporate life will finally allow the government to exercise ‘full ownership, control, and rights over’ this prime lot and other real estate properties occupied by Chevron, which are strategically located for the country’s future energy projects,” Dominguez added.
Chevron Philippines, an American company, secured the property located in San Pascual, Batangas by the virtue of the 1946 Bell Trade Act. The said law gives US corporations rights to Philippine natural resources equal to or in parity with those Filipinos.
The termination of parity rights in 1974 ended Chevron’s grasp on the 1.2-million-square-meter (120 hectares) Batangas land. However, President Ferdinand Marcos granted the US company a 50-year deal with rent set at 2.5% of the property’s value in 1974.
The Letter of Instruction No. 276 issued by Marcos states that the lease should include real estate taxes. It also adds that annual rentals should be based on the higher property revaluation.
In response to allegations, Chevron Philippines Policy, Government, and Public Affairs Manager Raissa Bautista said in a statement:
“The Chevron Philippines lease contract with BLCI (Batangas Land Company, Inc.) on the Batangas property was entered into in compliance with all Philippine laws and regulations. As one of the pioneer energy companies in the Philippines which has been operating here for over a hundred years, our commitment to the Philippine market remains strong. We will maintain open communication with the government, an important and valued partner, on this matter.”
With President Rodrigo Duterte administration putting all agreements between the government and the private sector under review, including that of US-owned Chevron Philippines, we wonder what does Davao-based tycoon Dennis Uy think about this development?
A friend of Duterte, Forbes-listed Uy has a big investment in Chevron Philippines when he bought, through his Udenna Corporation, the company’s 45% stake in the $4.5 billion Malampaya project back in November 2019.
To recall, Uy was not on Forbes list of 50 richest Filipinos in 2016, but last year he made it to the 22nd spot with a net worth of $660 million. The list was topped by the Sy siblings ($17.2 billion) followed by Manuel Villar ($6.6 billion).
We are quite intrigued. Let us just wait for the next chapter.