Binay got P200M in Boy Scouts land deal–Mercado

MANILA, Philippines–Vice President Jejomar Binay, longtime Boy Scouts of the Philippines (BSP) president, allegedly earned close to P200 million in kickbacks from a deal between the BSP and Alphaland Corp. for the development of a one-hectare prime property in Makati City, according to former Makati City Vice Mayor Ernesto Mercado.

Alphaland Corp. is owned by businessman Roberto Ongpin, a former trade minister of the Marcos regime.

Mercado said the property on Malugay Street and Ayala Avenue Extension was mortgaged by Ongpin to Development Bank of the Philippines in 2010 for P1.7 billion to finance the development of the property.

Until now, according to Mercado, the BSP has yet to get hold of its share from the development of the property to Alphaland Makati Place, a residential and leisure complex. The complex consists of The Residences, The City Club and Makati Place Mall.

On Wednesday night, the Binay camp denied Mercado’s allegations that the Vice President got P200 million in commission from the land deal between the BSP and Ongpin’s Alphaland.

Binay’s spokesman, lawyer Rico Quicho, said that Binay was “not personally involved in the transaction between Alphaland and the BSP.”

Ongpin could not be reached as of press time. He is in Europe.

In an interview with the Inquirer, Mercado said he would present Thursday at the resumption of the Senate blue ribbon subcommittee hearing evidence on the anomalous transaction.

He said he was forced to expose the anomalous transactions between Alphaland and the BSP following threats from Alphaland president Mario “Babes” Oreta.

The former Makati vice mayor denied that he had leaked the information to the BizBuzz column in the Inquirer’s business section.

“I had no choice, but in order to protect myself and the BSP, I shall see to it that the public is informed of what I know about this, including everything that I discovered later,” he said.

 

BF Goodrich

In 1976, BF Goodrich Philippines (now Sime Darby) donated the Makati City property to the BSP on the agreement that BF Goodrich would have the exclusive right to lease the property for 25 years with an option to renew it and to remain owner of buildings and other improvements on the property.

The lease was supposed to expire in 2026. However, Sime Darby cut short its contract in 2005 following an amicable settlement in the Court of Appeals in the case filed by former Manila City Mayor Alfredo Lim, who questioned the leaseback agreement between the BSP and Sime Darby, according to Mercado.

The settlement was done through a joint agreement in 2005 between Sime Darby and the BSP for the sale of the lot, then appraised at P1 billion, in which the former would get 40 percent and the latter 60 percent.

In 2008, the BSP entered into a joint venture agreement with Silvertown Property Development Corp., then headed by Oreta, to develop the property. Silvertown was later acquired by Alphaland.

Mercado said among the things he would raise in the Senate hearing was why the value of the BSP property in Alphaland’s financial statement for 2013 was just P600 million (the same appraised value of the BSP share of the land in 2005) when the property had appreciated significantly.

He said that in 2005 the value of the lot was already P1 billion after it was reclassified by the Makati City council from industrial into commercial and mixed use with FAR (floor area ratio) 8.

FAR is the total area of a building divided by the total area of the lot where the building is located. Higher FARs indicate more dense construction.

“In 2012, Mayor Junjun Binay approved the upgrading of the area from FAR 8 to FAR 12, which means the value had again increased, but their FS (financial statement) indicated the old value,” Mercado said.

Dwindling BSP sharing

Also questionable was the BSP share getting smaller.

But in 2013, Alphaland unilaterally decided that the BSP’s 15-percent share in the amended agreement would be reduced to only Tower 3 and the Podium from Towers 1 and 2, Mercado said.

It was Mercado who signed the 2008 agreement on instructions from Binay, who was then about to leave for abroad. The BSP was to receive “on paper 15 percent from the proceeds of the project.”

“I fought for 20 percent for the BSP, but I was told by Gerry Limlingan [Binay’s finance adviser and alleged bagman] who was always present in the discussion that 15 percent was only on paper and the 5 percent was for campaign funds of Binay,” said Mercado, then a senior vice president of the BSP.

“From the start, Alphaland knew I was opposed to the 15 percent because it was prejudicial to the BSP. I also opposed the plan to mortgage the land as collateral to finance the development of the area,” he said.

“Looking back, I feel I was asked to sign the deal, a fall guy in case things go wrong. Again, this is one evidence that Binay does not sign anything he knew is anomalous. His instructions for me to sign the agreement give deniability and cover,” said the former vice mayor.

On June 2, 2011, the agreement was amended after Alphaland acquired Silvertown. On the same day, the BSP executed a deed of absolute sale of the property in favor of Alphaland.

Mercado said Binay did not sign the deed of absolute sale.

“In the deed of absolute sale between Alphaland and the BSP, the signatories were Wendel E. Avisado as (BSP) senior vice president and Enrique Lagdameo as (BSP) national treasurer. Again, as a longtime BSP president, Binay did not sign the papers,” Mercado said.

Binay was the president of the BSP from 1998 to 2000 and again in 2001 up to the present.

Repository of kickback

Mercado said Noble Care Management Corp., owned by Oreta, was the repository of Binay’s 5-percent share from the development of the property, equivalent to close to P200 million.

Mercado claimed that in August 2008, Alphaland gave Silvertown 2,031 shares worth P20,310 and lent it P100.4 million.

In 2010, Alphaland bought back the shares for P89 million and wrote off the P100.4 million it lent to Silvertown.

“The total amount of P188,973 was Binay’s kickback from the land deal,” Mercado said.

Binay denial

In a text message to the Inquirer, Quicho said: “As can be attested by both entities, it was Mercado, in his capacity as senior vice president and head of the asset management of the BSP, who directly negotiated and dealt with Alphaland.”

Quicho took note of a report of Inquirer’s BizBuzz column in which the president of Alphaland “wrote a letter to Mercado where he stated it was Mercado who asked for undue benefits for handling the deal but was turned down by Alphaland.”

“Clearly, Mercado is again blatantly lying and maliciously ascribing to the Vice President his own sins,” Quicho said.

He also said Binay “reserves the right to take the appropriate legal action to vindicate any wrong that would result from the publication of this story.”

In an interview with a TV5 program Wednesday, the transcript of which was released by Binay’s office, Quicho also mentioned that Mercado took the lead in the finance section of the BSP.

“Now, we can see that he continues with his lies because, for sure, he did something anomalous (kalokohan). To cover up these anomalies, he is pinning the blame on Vice President Binay. He is blaming other people for his sins,” Quicho said.

Threat

Quicho also said that some senators were using the threat to hold in contempt Makati City Mayor Jejomar Erwin “Junjun” Binay and his officials just to spark up interest in the resumption of the hearings of the Senate blue ribbon subcommittee today.

He said this was because people were apparently no longer interested in the hearings. People are weary of the “lies” against Binay, Quicho said.

Residential, leisure complex

Alphaland Makati Place is a residential and leisure complex.

Its three towers are 33, 46 and 51 floors tall, while The Columns of Ayala Land only has 30 floors and Zuellig, 33 floors.

The Residences offers 494 fully furnished residential units, each coming with its own City Club share.

The City Club is a members’ only club that caters to leisure, entertainment and business needs, and occupies the top three floors of the six-story podium.

Makati Place Mall is a shopping center with local and international retailers, restaurants and a supermarket.

The Alphaland Makati Place project was reported to cost more than P8 billion to build. It was designed by renowned architectural firm Wong & Ouyang, which also designed Hong Kong’s Pacific Place.

The construction of Makati Place began in 2011. The City Club opened in 2013 while The Residences held its topping out ceremony last November.–With a report from Inquirer Research

 

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