Port operator International Container Terminal Services, Inc. (ICTSI) said the land occupied by the Manila International Container Terminal (MICT) that the Government Service Insurance System (GSIS) is claiming to be part of its property is owned by the Philippine Ports Authority (PPA).
In a disclosure to the Philippine Stock Exchange, ICTSI said “GSIS only has bare title to the port land” and that the right to use the land belongs to PPA.
“GSIS has, at most, only naked title. But the right to use the subject reclaimed port land belongs to PPA,” ICTSI said. It noted that this is similar to the case of the Rizal Memorial Sports Complex, in which the land belongs to the City of Manila but the right to use the land belongs to the Philippine Sports Commission under its chapter.
“Whoever buys from GSIS will only get a naked title (with no right to use the port land),” ICTSI said.
The ICTSI disclosure came after GSIS in a recent press briefing said it will be selling two parcels of prime real estate in Manila’s port area with a combined worth of P37.4 billion. However, one of the two areas, which measures 67 hectares, is occupied by MICT, the flagship operation of ICTSI.
ICTSI explained that Presidential Decree (PD) No. 634, issued in January 1975, granted Manila International Port Terminal, Inc. (MIPTI) a franchise to develop Manila International Port Terminal, now MICT. Letter of Instruction 293 ordered GSIS to extend financial assistance to MIPTI for the port construction project. And to justify this, PD 802 was issued to grant the social insurance institution title over the land that MIPTI will reclaim. ICTSI noted that GSIS only gave a loan of P2 million to MIPTI out of the P85 million needed for the project.
Three months after PD 802 was issued, PPA was created. In January 1978, PD 1284 (which granted authority to PPA to plan, construct, develop and maintain all port terminal facilities in the international port of North Harbor, and to supervise the operation and management of such facilities) expressly repealed PD 802. ICTSI said it was PPA which funded and completed the reclamation and construction of MICT using the port authority’s loan from the Asian Development Bank.
“So, the GSIS title over the port land became functus officio and GSIS should have surrendered that title for cancellation because it did not fund the project,” ICTSI pointed out.
In 1986, the franchise of MIPTI was cancelled and PPA took over management of MICT, which was then bid out and was won by ICTSI in 1987. The contract was awarded in 1988, and the validity of contract was affirmed by the Supreme Court (SC) in 1989 in the case Albano vs. Reyes.
GSIS in September 2001 filed an ejectment case against ICTSI, with its own evidence showing that more than half of MICT was still under water in 1976. The issuance of the title to GSIS in 1976 over 78 hectares of land when more than half of the area was under water was therefore void under SC’s PEA-Amari doctrine. The doctrine involves a 2002 Supreme Court ruling in the Philippine Estates Authority (now Philippine Reclamation Authority) and Amari Coastal Bay Resources Corp. case that says private companies cannot own reclaimed land.
While the ejectment case was pending, GSIS offered part of the contested area for social housing to then President Gloria Macapagal-Arroyo, who then issued Executive Order (EO) No. 108 declaring 10 hectares for such use. GSIS alleged that EO 108 was in recognition of its ownership of the title. But the Manila Trial Court dismissed the ejectment case, as GSIS had no cause to eject ICTSI, and this dismissal was also affirmed by the Regional Trial Court and Court of Appeals.
GSIS and PPA also submitted their dispute before the Office of the Government Corporate Counsel (OGCC) on which of them had a better right to the port land. The OGCC’s arbitration panel decided in favor of PPA and ordered GSIS to surrender its title for cancellation. The decision was, however, reversed at that time on a narrow technicality—that titles could not be the subject of a collateral attack and that PPA must file a direct attack against the title of GSIS in court.
ICTSI also clarified that GSIS’s claim it did not know about the ICTSI and PPA contract and that they (ICTSI) never responded to GSIS’s request for a meeting “are all untrue.”
It said the GSIS chairman is part of the committee that reviewed the MICT contract of ICTSI before then President Corazon Aquino approved the execution of the contract in 1988. ICTSI added that for the last 30 years, GSIS had also regularly issued the performance bonds that PPA required from ICTSI under the MICT contract.
Further, ICTSI said that when it received a letter from a GSIS lawyer last February 2019 to discuss “the matter of the use and rental of the property,” an ICTSI lawyer replied in a letter also in the same month that “it may not be productive only if ICTSI and GSIS will talk here, because PPA is an indispensable party.”
ICTSI said it was GSIS in a letter on February 28, 2019 that refused to meet if PPA was present. ICTSIadded that PPA also sent a letter to the GSIS lawyer explaining why PPA and not GSIS is the rightful and legal owner of the property. It also reiterated its request for GSIS “to surrender to PPA the TCTs (Transfer Certificate of Title) covering the North Harbor property for cancellation thereof and the issuance of new ones in favour of PPA.”