Hong Kong-based Landing International Development Ltd. is facing an uphill battle in the Philippines after President Rodrigo Duterte fired the whole board of the Nayong Pilipino Foundation over its decision to grant what he believes is a long-term lease to a foreign company.
President Duterte’s aversion to the establishment of new casinos on the Philippines is not helping the cause of Landing International to push through with NayonLanding, the proposed integrated resort in the Entertainment City of Manila costing an estimated $1.5 billion.
Duterte’s surprise move also created a confusion over the legality and validity of the lease contract signed by Landing Resorts Philippines Development Corp., the local unit of Landing International, and the NPF. Will the lease contract hold? Some government officials say the deal is gone, although the Department of Justice and the Office of the Government Corporate Counsel are still studying the validity of the lease contract.
Until the the DoJ issues its opinion, according to one lawyer, the lease contract is in effect. There is also the possibility that the contract can be renegotiated, if the DoJ finds infirmities in the agreement.
Buried in the dispute are the basic terms of the lease agreement and the real design of the tourism project. Wrong assumptions and uninformed judgement have prevailed in the public debate.
NayonLanding will be constructed on a land site of approximately 9.6 hectares within the Entertainment City, which has been leased to Landing Philippines for a period of 25 years. The lease contract is renewable for another 25 years upon expiry of the first 25 years, at a fixed lease rate of P360 per square meter a month and a variable lease rate at 10 percent of the net income from the NayonLanding’s theme parks.
Sacked NPF chairman Patricia Yvette Ocampo, in a full page newspaper ad Thursday, noted that a provision in the contract stated that if the application of LRPDC to designate the leased property as a Tourism Enterprise Zone is approved by the Tourism Infrastructure and Enterprise Zone Authority, the initial lease period would be 50 years instead of 25.
“This is perfectly legal, and specifically allowed and granted by Republic Act No. 9593, otherwise known as the Tourism Act of 2009, and Republic Act No. 7652, otherwise known as the “Investor’s Lease Act,” says Ocampo, adding that nowhere in the lease contract it is “stipulated or even hinted that the lease period would be 70 years!”
Mixed signals
The NPF controversy this early is sending mixed signals to investors at a time when investments in registered industrial zones of the Philippine Economic Zone Authority are dropping. Peza earlier reported that investments fell 56 percent in the first six months of 2018 to P53 billion from P120.2 billion year-on-year.
Peza director-general Charito Plaza said the “uncertainties in the Philippine fiscal regime” pushed back all possible expansion and new investments.
“There are incentives that are being removed in the Train 2 [second package of Tax Reform for Acceleration and Inclusion law]. Because of this, there are investors who are manifesting their support for us, conveying their sentiments that they are happy with Peza as it is now,” says Plaza.
NayonLanding’s tourism benefits are also being ignored. With a planned construction floor area of approximately 610,000 sq.m., the integrated resort will house an educational and inspiring indoor cultural theme park and water park that will showcase the Philippines’ rich history and culture, Asia’s first and largest indoor movie-based theme park, and a world-class state-of-the-art convention center.
Tourism Secretary Bernadette Romulo-Puyat said earlier this month her department would seek to reestablish the Philippines as a top international destination for meetings, incentives, conventions, and exhibitions (MICE).
The state-of-the art convention center in NayonLanding will feature the largest pillar-free ballroom in the Philippines with a seating capacity of approximately 5,000 seats. NayonLanding will be an ideal MICE destination in Manila to host high-profile and international events, including large-scale conferences, exhibitions and international events.
The National Economic and Development Authority board itself endorsed the project concept in November 2016. The integrated resort project will allow the country to be more competitive in the Asia-Pacific region and create a positive impact on the Philippine tourism industry.
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