Baguio officials take aim at BCDA’s P225M Camp John Hay debt

BAGUIO, PHILIPPINES — The Baguio City government is locked in a contentious standoff with the Bases Conversion and Development Authority (BCDA) over a staggering debt in connection with the Camp John Hay economic zone, plunging both parties into a legal quagmire.

Local officials said the unpaid financial obligations of the BCDA to the city government have reached P225 million as of 2021.

Camp John Hay was once a vacation spot for American soldiers and their families during the colonial period. It’s known for its lush pine forests, hills, and old buildings. When the United States military left the country, the camp became the property of the government. 

In the 1990s, the government transformed it into a place for business and leisure activities, calling it the John Hay Special Economic Zone. It has since become a popular destination for tourists, offering places to stay, eat, shop, and recreation. 

During a city council session on Monday, May 27, local officials voiced their frustrations and initiated steps to address the growing arrears. 

The City Treasurer’s Office has been tasked to provide comprehensive documentation on financial transactions and communications with BCDA.

City hall’s claim is anchored in the conditions outlined in City Council Resolution No. 362 from 1994, which set the terms for BCDA’s development of Camp John Hay. 

Under these terms, they said BCDA is to allocate 4% of gross income from operations within the John Hay Special Economic Zone (JHSEZ) to the city.

Baguio Mayor Benjamin Magalong, in a June 2023 correspondence, detailed outstanding amounts of P56.8 million and P168.6 million under different conditions of the agreement. 

“This owed amount has accrued over the years and reflects a continued neglect of BCDA’s obligations under our agreement,” read part of Magalong’s letter to BCDA.

Despite these clearly stated obligations, Baguio officials said, BCDA failed to fulfill its financial duties, particularly concerning the equitable revenue-sharing mechanism.

A report by the City Treasury Office showed no payments under one of the conditions have been made to date. 

Officials said the total overdue amount could be much higher than reported, given alleged discrepancies in the lease payments by CJH Development Corporation (CJH DevCo) to BCDA and subsequent calculations by the city government.

The city council scheduled a dialogue with BCDA representatives for June 24, 2024, in hopes of resolving the unpaid debts without escalating to more contentious legal measures. 

Baguio Councilor Fred Bagbagen, however, expressed concerns. “Despite our desire for a harmonious resolution, we find ourselves in an adversarial position due to BCDA’s refusal to honor its financial commitments,” he said.

Baguio Representative Marquez Go suggested a collaborative approach. “Why should we be adversarial with the other party if our goal is simply to collect? We can achieve this in a way that results in a win-win for both parties,” he said. 

The legal tangle has deepened with the Supreme Court’s recent ruling on a related lease agreement case, where both CJH DevCo and BCDA were found to have violated their contractual obligations, adding layers of complexity to the city government’s financial claims.

Local officials sought proactive measures which include a review of the legal frameworks governing claims and the exploration of potential interventions in ongoing legal disputes that might affect financial interests. 

Baguio City Legal Officer Althea Alberto was cautious, saying, “It might be premature for me to give a legal opinion at this point.”

Councilor Jose Molintas pointed out the limitations of the city government’s legal stance since it is not a party to the original lease agreement but is indirectly affected through the stipulated revenue-sharing conditions. 

“Our legal framework must adapt to ensure Baguio’s financial interests are not sidelined in disputes that affect us,” Molintas said. – Rappler.com