SBMA takes over Duty Free amid drive vs ‘erring locators’

EMPTY SHELVES | Subic Bay Metropolitan Authority Chair and Administrator Jonathan Tan leads the inspection of goods remaining at the Duty Free shop, once a crowd magnet in the Subic Bay Freeport, following a government takeover. (Photo  by JOANNA ROSE AGLIBOT / Inquirer Central Luzon)

SUBIC BAY FREEPORT, Philippines — The Subic Bay Metropolitan Authority (SBMA) on Wednesday repossessed a property leased by Duty Free Superstore Inc. (DFSI), one of the areas frequented by tourists in this free port years ago, over nonpayment of rental fees and other violations.

It was the latest in a string of takeovers done by the SBMA against “erring locators” this month, according to SBMA Chair and Administrator Jonathan Tan.

DFSI used to occupy Building 332 and its adjacent lot on Burgos Street, Naval Station. It covers an area of 651 square meters, exclusive of the 463 square meter adjacent lot.

Records from the SBMA showed that DFSI had a contractual default of nonpayment of lease rentals, common use service area (Cusa) fees, and other charges that amounted to P15,932,595.16 as of March 2017.

The company has a lease agreement with the SBMA dated Sept. 16, 2003, with a 25-year lease term that was supposed to end on Sept. 15, 2028.

In an interview, Tan said the building and the adjacent lot were previously repossessed by the SBMA Legal Department on April 11, 2017.“We carried out a clearing and transfer of personal properties from the premises of Duty Free,” he said.

In 2020, DFSI filed a petition for voluntary insolvency at the Olongapo City Regional Trial Court, which was dismissed.

Audits

“We want to continue with our thrust to repossess and reutilize idle lands inside the free port to promote a more efficient and vibrant business climate here,” Tan said.

The SBMA head said the agency had already repossessed 10 parcels of unused land, noting that it could take over 20 more properties pending the agency’s audits.

On Sept. 12, the SBMA also took over three more properties leased out to Parabion Inc., which operates a lodging business in Cubi Triboa District.

Tan said Parabion failed to comply with development commitments and did not pay lease rentals, including Cusa, for 1,176-sqm of land with two buildings.

He noted that the company had yet to settle close to P10 million in Cusa fees as of July 28 of this year.

Contractual default

“We already sent [Parabion] a final notice of default with demand to pay on Nov. 22, 2022, then we sent them a notice of pretermination and repossession on July 28 that was served on Aug. 10,” he said.

The SBMA also took over Building 8321 along Zambales Highway and Building 8359 along Bataan Road, both owned by Ramphos Corp., a company that manufactures and sells amphibious ultralight aircraft. The property is a 966-sqm portion of Building 8045-C at Subic Bay International Airport.

Tan said Ramphos had an expired lease agreement with the SBMA since Sept. 11, 2020, prompting the eventual takeover by the SBMA on Sept. 5.

He said the company had contractual defaults such as nonpayment of lease rentals (building spaces), Cusa fees, and other arrears amounting to nearly P10 million as of July 28.

Tan urged companies operating inside the free port to pay their dues diligently to ensure their “seamless business operations.”