PPA in control: COA urges GSIS to drop Manila North Harbor property from its books
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PPA in control: COA urges GSIS to drop Manila North Harbor property from its books

The Commission on Audit is urging the Government Service and Insurance System (GSIS) to derecognize the Manila International Port Terminal Inc. (MIPTI) from its accounts because it neither controls nor gets rental from the country’s busiest port.

In its latest annual audit report on GSIS, COA said the Philippine Ports Authority (PPA) has controlled and enjoyed all the revenues from the MIPT currently leased out to International Container Terminal Services Inc. of bilyonaryo Ricky Razon.

COA is concerned that GSIS’ insistence on retaining MICT has “cast doubt on the faithful representation of its investment property account.” The MICT is valued at P41.49 billion or a third of GSIS’ total property portfolio in 2020.

“The audit team believes that it is the PPA, and not the GSIS, that has control over the MIPTI property, as it is the former that is utilizing and enjoying the benefits derived therefrom, while the latter has not derived any income from the subject property from the time the title to the property was issued,” said COA.

COA pointed out that GSIS has not received a single centavo from MIPT since it obtained the title in 1975 through Presidential Decree No. 802 1975. PPA was granted authority to manage the MIPT property in 1978 under PD No. 1284.

“The claim that the GSIS has been exercising control over the MIPTI property because it is under the management and administration of its Real Estate Asset Disposition and Management Office (READMO), and that the National Government recognizes its title to the property, may not be justified,” it added.

In response to COA, GSIS management stressed that it was the “titled owner” of the property and which could not be sold without its consent.

“The fact that the PPA has continuously used the subject property since 1975 is irrelevant since the PPA’s role in the area had always been and continues to be limited to the maintenance and management of the port terminal facilities therein. It is settled that the possession of the land previously registered under a Torrens title in the name of another cannot ripen into ownership,” said GSIS.

GSIS said it formed a task force in August 2021 to review its option on the proper accounting treatment of MPITC.

A month later, GSIS said it sent a letter to the Office of the President in September 2021 seeking “guidance and intervention” in settling the ownership dispute with PPA on the property. GSIS said it was hoping to “do away with costly and protracted litigation in settling the matter.”

But the COA reiterated its stand for GSIS to recognize the MPITC property. It also said that if the OP decides to reject or takes no action on its request for intervention before the end of President Rdorigo Duterte’s term on June 2022, GSIS must seek a court resolution to settle the ownership issue.

This is the second straight year that COA has recommended to the GSIS to drop the MIPT property from its books. GSIS had previously planned to sell the 78-hectare property in June 2019 under then president and general manager Jesus Aranas. The plan, however, was scrapped a few months later after Aranas resigned.

COA said it was “improbable” at this point that GSIS could realize the increased value of the MIPTI property.

 

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