House conducts inquiry into sale of Pampanga’s Paskuhan Village

PAMPANGA, Philippines – A committee of the House of Representatives started on Tuesday, February 28, its investigation into the sale by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) of a 9.3-hectare property in this province to a private corporation.

The Committee on Good Government and Public Accountability sought to establish if the sale of Hilaga, popularly known as Paskuhan Village, was legally valid. It also sought to check if proper procurement procedures were adopted, based on the resolution filed last January 3 by Pampanga 3rd District Representative Aurelio Gonzales.

Premier Central, Incorporated (PCI) representative Jeffrey Lim signed a deed of absolute sale with former TIEZA chief operating officer Mark Lapid on May 4, 2015 after paying P939.6 million for the property.

Three other private companies – SM Development Corporation (SMDC), SM Prime Holdings Inc, and SEJ North Premier Holding Corporation – purchased the bid documents for the TIEZA property but did not participate in the bidding that set the amount of the minimum bid at P817.7 million.

In the House Resolution no. 654 Gonzales filed, he erroneously referred to the buyer of Paskuhan Village as “SM Development Corporation.” He also repeatedly mentioned SMDC during the committee hearing on the matter without anybody correcting him.

The solon’s resolution echoed former Pampanga 1st District Representative Joseller Guiao’s House Resolution no. 1898 in February 2016 that asked the House Committee on Tourism “to conduct an inquiry, in aid of legislation, into the circumstances surrounding the sale of Paskuhan Village in Pampanga by the TIEZA to SMDC.”

Both Guiao and Gonzales stated in their resolutions that the 9.3-hectare property was donated by the late Jesus Lazatin to the government to be the site of a Christmas theme park that would showcase Pampanga’s giant lanterns and be devoted to tourist and cultural activities.

A TIEZA document shows that its forerunner, the Philippine Tourism Authority (PTA), bought the property from Lazatin for P4.4 million in the 4th quarter of 1989 through two deeds of absolute sale.

However, Guiao said that “a huge cloud of doubt hangs above the reported sale” of the prime property by Lazatin to PTA, saying that the heirs of Lazatin “are supposedly not aware of the existence of a deed of sale to TIEZA’s predecessor, the PTA.”

Guiao said Paskuhan Village, the original site of the annual Ligligan Parul (Giant Lantern Festival) before the event was transferred to nearby malls, is part of Pampanga’s symbol and legacy.

On December 4, 2014, 5 months before the sale of Paskuhan Village to PCI, the provincial government of Pampanga offered to buy the property or to take over its administration and operation from TIEZA, which had been incurring several millions of pesos in losses from operating and maintaining the estate.

Lawyer Guiller Asido, current chief operating officer of TIEZA, said the sale of Paskuhan Village was made in the best interest of the government, based on the recommendation of its privatization consultant.

He said a government entity like TIEZA should not be in the business of managing businesses that are being subsidized by the government and that the money generated from the sale was more than what TIEZA had wanted for the property.

The House committee, led by Representative Johnny Ty Pimentel, also learned during the first hearing that Paskuhan Village is still under the name of the PTA with updated real property tax payment.

Lawyer Jethro Sabariaga, Bureau of Internal Revenue (BIR) director in Central Luzon, said PCI had paid only the P14 million documentary tax stamp and that the capital gains tax for related to the sale of the property remains unpaid.

He disclosed that while the capital gains tax is normally the liability of the seller, in this case TIEZA, it was the PCI that applied for exemption in paying the said tax.

Asido explained that under TIEZA’s deed of absolute sale with PCI, it is the latter that should pay the capital gains tax.

He quoted term and condition no. 3, paragraph C of the deed that states: “The vendee (buyer) shall be solely responsible and liable for all other taxes and expenses relating to the transfer of the title of the property and its subsequent transfer and registration” that include but not limited to “documentary stamp tax, real property taxes commencing on January 1, 2015, transfer tax and registration fee and other expenses, whether national or local.”

But legislators pointed out that under term and condition no. 2, section F of the deed, it is clearly stated that TIEZA, as the vendor (seller) “shall be solely responsible for the payment of Capital Gains Taxes, if any, for the transfer of the property.”

The House Committee on Good Government and Public Accountability asked the Register of Deeds in the City of San Fernando here to refrain from transferring the ownership of Paskuhan Village from PTA to PCI, pending the conclusion of the congressional inquiry into the sale of the property.

The Paskuhan Village was inaugurated on December 11, 1990 by the late President Corazon C. Aquino.

The centerpiece of the theme park is the center building shaped like a Pampanga Christmas lantern when viewed from above. It has a plenary hall, an administrative building, 4 merchandise halls, 3 swimming pools, playground, 600-person amphitheater, fishing and boating lagoon, museum, multi-purpose hall, food court, garden for music performance, and a parking lot for 200 vehicles.

Documents show that as of June 30, 2010, the theme park has total liabilities and equity of some P68.1 million.

The number of people visiting Paskuhan Village began to dwindle in 2001 after SM City Pampanga and the Robinsons Starmills malls began operating several hundred meters away from the Christmas theme park.

In the same year, the annual Ligligan Parul was also transferred from Paskuhan to SM City Pampanga, before the event was eventually transferred by the city government and its co-organizers to Robinsons Starmills. – Rappler.com