EXCLUSIVE: Binay, Erap dispute Central Market property

Posted at 02/14/2014 5:08 AM | Updated as of 02/14/2014 8:02 AM
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MANILA - Is this cool-off the signal of the end of their bromance?

Manila Mayor Joseph Estrada and political ally Vice President Jejomar Binay are at odds this Valentine's after the former Philippine president failed to get the latter’s outright approval to re-develop the iconic Central Market in his city.

"Tumayo ako. Iniwan ko sila sa meeting," Estrada said in an interview on the sidelines of a Filipino-Chinese gathering in Century Park Hotel on Tuesday night.

Estrada wanted to enter into public-private partnership with SM Development Corp. which has offered to rebuild the Central Market in Sta. Cruz, Manila into a 3-level structure with a grocery on the ground level and roof-deck parking.

“Hulog ng langit ba yung SM, nag offer na they’re willing PPP (public-private partnership). They will spend for all the cost of the market. Kami walang gastos. Yung isang floor lang gagamitin nila, the rest sa amin na. Malaki na income namin, wala pa kaming nagastos,” Estrada said in an exclusive interview that aired on "Umagang Kay Ganda."

“Itutuloy ko yan kahit magkatampuhan man kami,” Estrada said.

However, the city of Manila has no rights over the property that prevents the local government from developing the market, according to Home Guaranty Corp. (HGC), which owns the property.

HGC is a shelter agency under the Housing and Urban Development Council (HUDCC) that is headed by Binay. It provides government guarantees for loans that bankroll housing projects.

Estrada was advised by Binay that all actions pertaining to the sale of the Old Bilibid Compound – a huge parcel of land to which the Central Market property is a part of – have to be reviewed by the Department of Finance and must undergo public bidding.

A masterplan must also be presented and approved prior to any action concerning the property.

Manila Mayor Joseph Estrada and Vice-President Jejomar Binay are at odds over the former president's proposal to redevelop the Central Market in his city. File photo

“Tampuhan lang. Sa pamilya nagkakatampuhan. Nagkakatampuhan ang magkakapatid, nagtatampuhan yung magulang at anak. Ito, tampuhang magkaibigan ito,” Binay told ABS-CBN News.

Binay said they have not spoken to each other for two weeks since Estrada walked out from that meeting.

However, he said he treasures his friendship with Estrada.

“Kinuha niya akong vice-president. Malayo na, eh. Matagal na ang aming pinagsamahan. Yung mga bagay bagay na nangyari kamakailan, hindi naman magiging dahilan yun para magkahiwalay yung pagkakaibigan,” Binay said.

How the Central Market became an HGC asset
According to documents obtained from HGC, the 7,640-square meter Central Market has an average appraised value of P316 million and houses 2,900 market stalls.

It is covered by one title bearing TCT No. 233202 and is registered under the name of the Republic of the Philippines, under the custody of HGC.

But how did the Central Market become a property of the Philippine republic?

On February 28, 1995, President Fidel Ramos issued Proclamation No. 542 that authorized the development of the 6-hectare Old Bilibid Prison compound for mixed housing and commercial purposes.

Public Estates Authority (PEA), now known as the Philippine Reclamation Authority, was designated as project manager.

Comprising this Old Bilibid Prison asset are Dr. Jose Fabella Memorial Hospital, the Manila City Jail, and the Central Market.

To raise money, PEA issued P1-billion worth of securities with the Old Bilibid Compound as collateral. HGC was the guarantor and DBP was the trustee.

Separately, PEA executed on March 28, 1996 a memorandum of agreement in favor of the City of Manila, ceding the operation and administration of the Central Market by way of “usufruct” for 50 years beginning March 1996 until March 2046.

Usufruct is legal right accorded to a person or party that confers the temporary right to use and derive income or benefit from someone else's property. Usufruct is usually conferred for a limited time period.

But the Old Bilibid project failed and PEA defaulted on its payments. HGC, being the guarantor, paid all the investors a total of P1.14 billion.

On November 16, 2000, the entire Old Bilibid Compound asset pool, including the Central Market, was assigned and conveyed to HGC by the DBP through a deed of assignment and conveyance.

This assignment and conveyance of the Old Bilibid Compound effectively extinguished the usufruct agreement between PEA and the city of Manila over the Central Market.

Failed bidding

On July 8, 2004, President Gloria Arroyo amended Proclamation 542, which was issued under the Ramos government, and designated HGC as the principal agency to administer the Old Bilibid Compund and to sell the properties through public bidding.

HGC tried to bid out the entire parcel in 2006 at a minimum disposition price of P2.5 billion.

Six companies, namely, Ayala Land, Megaworld, SM Prime Holdings, Robinsons Land, ML&H Corp., and Filinvest Land bought bid documents.

HGC, however, suspended the bidding in 2011 due to issues raised by bidders concerning relocation of informal settlers.

Legal issues, options

But there is a conflict: how to enforce the ownership rights of HGC and at the same time allow the City of Manila to continue operating the Central Market?

HGC does not have the mandate under its charter to own, operate, and maintain public markets on a long term basis. Neither has it the experience to operate wet and dry markets.

On the other hand, the City of Manila is duly authorized by its charter to operate and maintain public markets.

Atty. Cesar Romano Jr., HGC head of legal services department, and Atty. Dexter Lacuanan, head of legal group, came up with recommendations.

In a letter dated January 9, 2014 to HGC president Atty. Manuel Sanchez, the two lawyers said HGC can commission the formulation of a comprehensive master plan to develop the Old Bilibid Compound. And if the master plan will include the construction of a public market, then HGC will consider entering into a new agreement with the City of Manila.

“Merong master plan. Eh kako, Mr. Vice President kung aantayin ko yung master plan eh baka tapos na yung term ko, di pa tapos yung master plan na yan. Anyway, pwede namang nakahiwalay yung lupa ng Central Market. Baka pwede kakong phase to phase naman,” Estrada said.

Jay Flaminiano, the city legal officer of Manila, argued that the usufructuary right of Manila over the Central Market was not extinguished based on conditions under Article 562 of the Civil Code.

Flaminiano said that when HGC assumed ownership of the Old Bilibid Compound, it stepped into the shoes of PEA as party to the memorandum of agreement with the city of Manila. Consequently, Flaminiano said HGC is obliged to respect the usufruct.

Erap: ‘I shall return.’

The "lover's quarrel" between the political allies has brought speculations about the cool-off extending to 2016.

Estrada returned to power in 2013 after winning as Manila mayor in the 2013 mid-term elections and still enjoys public adulation despite his checkered political career.

He was ousted from presidency in January 2001 by the Philippines’ second non-violent "people power" revolution. Accused of accepting hundreds of millions of pesos from illegal gambling syndicates, he was detained and was convicted for plunder in 2007 and was sentenced by the Sandiganbayan to reclusion perpetua.

But Estrada, who was also a former movie actor, was later granted pardon by then President Gloria Macapagal-Arroyo. Despite a promise not to run for a public office after his pardon, he ran for president again in the 2010 national elections, but placed second behind then Senator Benigno Aquino III.

Binay, a former city mayor, pole vaulted to the vice presidency in 2010, to the shock of his rivals and political observers.

Estrada’s Partido ng Masang Pilipino (PMP) and Binay’s Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) in 2012 formally joined forces to form what is now called the United Nationalist Alliance (UNA), which is expected to carry Binay as its standard bearer in the 2016 presidential polls.

In UNA’s "miting de avance" (final rally) in Tondo, Manila last year before the mid-term polls, party mates led by Estrada took turns in introducing Binay as “the next President of the Philippines.”

When asked before if he still planned to run in 2016, Estrada would quote former US President Ronald Reagan: “I want to retire while I can still carry my luggage.”

But now Estrada is mouthing a different quote from another political figure – American general Douglas MacArthur who fulfilled his promise to return to the Philippines after two years of fighting in the Pacific.

Given his dispute with Binay: “Pwede rin namang ‘I shall return,’ sabi nga ni MacArthur,” Estrada said.