Duterte orders review of UP-Ayala technohub deal

MANILA, Philippines – President Rodrigo Duterte has ordered a review of the lease contract for the UP-Ayala Land Technohub in Quezon City, following the recommendation of Chief Presidential Counsel Salvador Panelo.

Panelo, who is also presidential spokesperson, made the announcement in a Palace news brieging on Thursday, January 23.

He said Duterte agreed with his recommended review of the contract between Ayala Land and the University of the Philippines (UP) to check the document for possible "onerous" provisions.

"I told the President about this and 'yung reaction ng Presidente ay tingnan natin kung totoo 'yung alegasyon ng article na 'yun (and the President's reaction was let's see if the allegations of that article are true)," Panelo told reporters in a press conference at Malacañang.

Panelo was referring to an online article alleging that the Ayalas are renting the 37-hectare or 370,000-square-meter (sqm) land at only only P22 per sqm a month. Ayala Land has since said that it is paying P171 per sqm monthly. (READ: Malacañang’s rants send Ayala Land shares falling by 7%)

"We will investigate. We will review para malaman namin kung totoo o hindi (so that we know if this is true or not). In other words we do know exactly what," he said.

Panelo earlier floated the idea of reviewing Ayala and UP's contract In a DZIQ interview on Sunday, January 19, and later on said he would recommend this to Duterte.

"Rekomendasyon ko. [I told him] the night before (Wednesday). Sabi niya kailangan talaga pag-aralan yan (He said we really need to study that)," Panelo said.

What will happen next? Panelo said it remained to be seen what recommendations would be made if indeed, questionable provisions would be found in the contract.

Panelo said either the Department of Justice or the Office of the Chief Presidential Legal Counsel, which he heads, would review the contract. After this, it would seek the comment of the Department of Finance and the Office of the Solicitor General.

"Tingnan natin kung ano 'yung recommendation ng Department of Finance kasi involved ang pera (Let's see what the recommendation of the Department of Finance will be because it involves money). Number two, the Department of Justice because it may involve recission ng contract...and also the Office of the Solicitor General," he said.

Legal battles: The review of the UP-Ayala Land technohub lease contract is the latest in a series of deals being reviewed by the executive branch involving the Ayala group.

The DOJ is already reviewing the alleged onerous concession agreement of Manila Water, which has sparked Duterte's outrage. Meanwhile, the House of Representatives is set to probe the deal of Ayala Corporation and Manny Pangilinan's Metro Pacific Investments Corporation (MPIC) for the Light Rail Transit Line 1.

Renewed threats against government contracts with private entities are seen to spook businesses and investors, with experts emphasizing that the government's respect for the validity of contracts it enters into is an important factor in building investor confidence.

Panelo belied their concerns, saying business had "nothing to fear" if there was "nothing wrong" with their contracts.

"The President will certainly respect the sanctity of contracts except only when from the very provisions it appears to be contrary to law, public interest, and public policy," he claimed.

Since Duterte's spat with water concessionaires, private firms including Maynilad and the Ayala-led Manila Water have failed to reach a middle ground that would satisfy both the government and business group's interests. – Rappler.com

Sofia Tomacruz

Sofia Tomacruz covers foreign affairs, the overseas Filipino workers, and elections. She also writes stories on the treatment of women and children. Follow her on Twitter @sofiatomacruz. Email her at sofia.tomacruz@rappler.com.

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