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TIMELINE: GSIS, Enrique Razon's dispute over port property

MANILA, Philippines – Government Service Insurance System (GSIS) president Jesus Clint Aranas resigned on Tuesday, July 2, amid the agency's bitter dispute with port tycoon Enrique Razon's International Container Terminal Services Incorporated (ICTSI).

The GSIS plans to sell the 67-hectare land on which Razon's flagship port operation stands. However, Razon insists that the GSIS has a "naked title" only and has no right to use or sell the property.

Aranas also said ICTSI must pay the GSIS at least P80 million monthly or almost P1 billion a year in rent for the land that ICTSI has been occupying since the 1970s.

But ICTSI maintained that the Philippine Ports Authority (PPA) is the rightful owner of the land worth P33.6 billion.

Here is the timeline of events over the disputed property which dates all the way back to the Marcos regime:

July 1974 - The PPA is created through Presidential Decree (PD) No. 505.

January 1975 - Former president Ferdinand Marcos, through PD No. 634, grants Manila International Port Terminals Incorporated (MIPTI) a franchise to construct and maintain the Manila International Port Terminal Complex (now the Manila International Container Terminal or MICT).

Marcos orders the GSIS to extend financial aid to MIPTI for the construction. The GSIS gives a loan of P2 million out of the P85 million needed for the project.

The bulk of the amount is loaned by the PPA from the Asian Development Bank.

September 1975 - Marcos enacts PD No. 802, which directs all public port facilities, land buildings, movable and immovable properties, intangible assets, powers, rights, foreshore lease, and other privileges over port districts to be transferred to the PPA.

The GSIS is citing PD No. 802 for its claim over the property. Section 2 of the PD states that "in consideration of the financial assistance to be extended by the [GSIS]...all lands already reclaimed as described in Presidential Decree No. 634, or to be reclaimed by the Manila International Port Terminals Inc...shall be conveyed, transferred, and ceded to the [GSIS] as additional contribution of the National Government to augment the actuarial solvency of the Retirement Insurance Fund."

Moreover, Section 3 states that reclaimed lands were to be registered and titled in the name of the GSIS. The Register of Deeds would also issue the corresponding certificate of title to the GSIS.

Reclaimed areas would also be leased by the GSIS to MIPTI for 25 years and can be renewed for another 25 years.

December 1975 - PD No. 505 is amended through PD No. 857, which empowers the PPA to create or alter its own organization or Port Management Unit.

January 1978 - PD No. 1284 essentially repeals PD No. 802, the source of the GSIS title.

It grants authority to the PPA to plan, construct, develop, and maintain all port terminal facilities at the Manila North Harbor and Manila Bay. 

Revenues collected from the MICT are also decreed to belong to the PPA after deducting the fees of MIPTI for the management of the MICT.

(ICTSI insists that the enactment of PD No. 1284 made the GSIS title functus officio or no longer having a legal effect. "GSIS should have surrendered that title for cancellation because it did not fund the project," ICTSI said. The PPA also believes the GSIS lost all the rights to the property.)

1986 - After the EDSA Revolution, the franchise of MIPTI is canceled and the PPA takes over the MICT management. 

1987 - The management of the MICT is bidded out and won by Razon's ICTSI. 

1988 - The contract for developing, operating, and managing the MICT is awarded to ICTSI by the PPA.

1989 - The validity of the award is affirmed by the Supreme Court.

2001 - The GSIS files an ejectment case against ICTSI, insisting that the company was using part of its 78-hectare property.

While the case is pending, GSIS offers a part of the area for social housing to President Gloria Macapagal Arroyo.

The Metropolitan Trial Court and Regional Trial Court dismiss the ejectment case. This is later on affirmed by the Court of Appeals.

2012 - The GSIS and the PPA opt to settle their dispute over rights to the port land before the Office of the Government Corporate Counsel (OGCC).

The OGCC arbitration panel decides in favor of the PPA and orders the GSIS to surrender its title for cancellation.

2015 - The OGCC reverses its 2012 decision, saying it lacked jurisdiction.

"PPA's argument questioning the validity of GSIS' OCT (Original Certificate of Title) involves a collateral attack on GSIS' titles which can only be done through a direct proceeding," the OGCC says.

"An adjudication which may result in the cancellation of GSIS' title constitutes a collateral attack which can only be done before the proper courts," it adds.

The GSIS views the reversal as an affirmation that it has vested right to the property. 

February 2019 - The GSIS writes a letter to ICTSI to discuss "the matter of the use and rental of the property." ICTSI replies that the move may not be productive if only the two parties discuss the issue, since the PPA is an "indispensable party."

"We therefore suggest that the PPA be included in the proposed meeting," ICTSI says. 

On February 28, ICTSI says the GSIS refused to meet, with the PPA present. On the same day, the PPA sends a letter to the GSIS insisting that it is the rightful and legal owner of the disputed property.

June 26, 2019 - The GSIS reiterates its plan to sell the 67-hectare property at the Manila North Harbor, which ICTSI is occupying.

"As a government entity that exists to ensure the integrity of the funds of its members, GSIS is determined to sell it through public bidding upon the approval of the Board," Aranas says.

The GSIS also insists that ICTSI fork over billions of pesos in unpaid rent. Aranas says ICTSI should have paid P80 million a month or almost P1 billion a year.

July 3, 2019 - Aranas resigns days after the GSIS signified its intent to sell the property.

Presidential Spokesperson Salvador Panelo initially says that President Rodrigo Duterte no longer trusts Aranas. But he immediately retracts this and sends out a more neutral-sounding statement after. Some reporters already tweet the statement before Panelo's retraction.

The first statement reads:

The Palace confirms that the Office of the President has received the resignation of Government Service Insurance System (GSIS) President and General Manager Jesus Clint Aranas.

Due to reports and allegations that there had been impropriety in the management of the GSIS leading to loss of confidence, the President has accepted Mr Aranas' resignation for his graceful exit from office.

The President is now looking for a worthy replacement for the vacated post who would not only safeguard the hard-earned money of government workers but would also ensure that the same would redound to the benefit of the GSIS members, bearing in mind the promotion of their welfare and interest.

The second statement reads:

The Palace confirms that the Office of the President has received the resignation of Government Service Insurance System (GSIS) President and General Manager Jesus Clint Aranas.

The President has accepted Mr Aranas' resignation without any reason nor any comment.

The President is now looking for a replacement for the vacated post.

July 4, 2019 - The GSIS revokes its previous decision to sell the controversial property.

GSIS Chairman Rolando Macasaet told Finance Secretary Carlos Dominguez III that the deal will be placed under review and stakeholders will be consulted first.

"In fairness to the board, Atty Aranas always assured the board that this transaction had the approval of [Duterte]," Macasaet says.

– Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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