MANILA, Philippines—The SM Group clarified Tuesday that the property that will be used for the extension of its SM mall in Baguio City was purchased as early as 1992 in a public bidding conducted by the Department of Environment and Natural Resources (DENR).
The Henry Sy group made the clarification in the wake of the pronouncement of opposition Representative Danilo Suarez that the House minority was studying the possibility of filing an impeachment case against President Aquino for approving the sale of a government property in Baguio to the SM Group for only a quarter of its current value of P1.9 billion.
In a statement, SM said that the purchase of the 34,528-square-meter lots adjoining the SM City Baguio was meant to protect SM properties from erosion as the adjoining lots have irregular terrain.
It said that prior to the auction of the 34,528-square-meter lots, the committee of appraisal composed of the City Mayor of Baguio and the Cenro Officer of the Department of Environment and Natural Resources-Cordillera Administrative Region appraised the lots at P1,500 per square meter which the regional director of DENR-CAR approved at appraised value of P1,550.
SM, which offered a bid price of P2,027.34 per sqm for a total amount of P70 million for the 34,528 sqm lots, was declared the highest bidder on April 22, 1992. An order award was issued to SM on May 5, 1992, being declared the highest bidder.
“Although the full payment for the purchase price was completed on April 2, 1997, the execution of the Deed of Absolute Sale was made only in 2011 because of the issue on certain portion of the bidded 34,528 sqm lots,” SM said. “It was discovered that the 2,834 sqm portion of the lots occupied the right-of-way and that had to be excluded from the sale, so what was actually turned over to SM was the remaining area of 31,688 sqm.”
Purely ministerial
On Sept. 16, 2011, President Aquino formally made the execution of the deed absolute sale for the 31,688 sqm for the same bid price for the original area of 34,528 sqm.
“The execution of the Deed of Absolute Sale by President Aquino was the ministerial function of the incumbent President since the subject lots were already fully paid as early as 1997,” SM further said. “It could also be a part of the Aquino Administration’s clean-up process on pending matters.”
SM also made it clear that the sale of the Baguio properties was exempted from the payment of the capital gains tax because it was the government which sold the lots. “But SM paid the documentary stamp tax and the transfer tax for the 31,688 sqm lots.”
It added that the Certificate Authorizing Registration on the sale of the purchased lots was already issued by the Bureau of Internal Revenue of Baguio City.
Suarez had claimed that he met with Danilo Lihaylihay, a tax informer, who accused Aquino of selling the 3.4-hectare property where the old Pines Hotel once stood for only P500 million to SM Investments when its current value was P1.9 billion. He also accused the President, Executive Secretary Paquito Ochoa and Environment Secretary Ramon Paje of evading the payment of taxes on the deal.