Synergy between and among the Subic Bay Freeport and contiguous communities: a genuine catalyst for progress

The Subic Bay Freeport (“Freeport”), through the Subic Bay Metropolitan Authority (SBMA) has been granted much autonomy by the Philippine government via Republic Act (RA) No. 7227, as amended. Among others, Subic Bay Freeport enjoys its status as a self-sustaining, industrial, commercial, financial and investment center; as a separate customs territory; and a tax-free zone except for the payment of three percent (3%) of the gross income earned by all businesses and enterprises within the Freeport.

The Freeport used to be the US Subic Naval Base. By virtue of the 1947 US-RP Military Bases Agreement, large tracts of land historically belonging to Olongapo City, Subic, Hermosa and Morong, were segregated and fenced. After the treaty expired and was not renewed in 1991, RA 7227 was enacted, and the Freeport was born. In order to do so, the law required the concurrence of the said affected local government units (LGUs) through their legislatures. The LGUs agreed primarily in exchange for employment opportunities for their constituents and the trickle-in effects of development from the Freeport.

But despite the declaration of those LGUs as integral parts of the Freeport, a perceptible gap, both physical and psychological, remains between them and the Freeport. Courtesy perhaps of the old fences and man-made channels still dividing them.

Thus, the love-hate relationships started between the Freeport and these LGUs. Issues ranging from appointments of LGU representatives to the SBMA board of directors, preference in the hiring of workers, delayed remittance of the 1% share, business competition between Freeport-based and outside traders, territorial disputes, would crop up from time to time. These are concerns, however, that can be avoided and settled as long as the parties involved would have an open mind and focus on critical collaboration.

In this regard, it is important to note that although the Freeport has a certain level of autonomy, it lacks a distinct feature of a political subdivision to fully function independently and seamlessly, i.e., it does not have its own local police (the Law Enforcement Department [LED] is an internal security force), it does not have its own prosecutorial service, neither does it have its own courts. The SBMA, its residents and investors usually run “outside the base” to the courts of Olongapo City, Dinalupihan, or Balanga City in case of civil disputes. Preliminary investigation of crimes committed in the Freeport is held either in Olongapo City or Balanga City, and criminal cases are subsequently filed in courts exercising territorial jurisdiction where such crimes are committed.

In other words, the Freeport relies on various instrumentalities outside its gates in order to efficiently manage and maintain harmony and stability inside, and ensure the consistent pace of progress and development.

While it is laudable and proper then to insulate the Freeport from politics, the reality must be accepted, however, that the Freeport is surrounded by local political units whose services and cooperation it vastly needs in order to succeed. It is surrounded by communities whose development is likewise vital to the Freeport’s relevance and competitiveness in the global stage.

It is in this light that the Freeport must break from its perceived isolationism (whether rightly or wrongly), actively engage the concerned LGUs and communities, and find a common ground by which they can work together.

Corporate social responsibility (CSR) is a tool that can be harnessed to establish rapport and camaraderie such that the people and their communities would truly feel and understand that they are prime stakeholders in this fenced-in area called the Freeport. The SBMA together with like-minded and willing locators, may focus on a broad array of programs such as educational assistance and grants, including technical and vocational programs; environmental conservation and protection; and basic services subsidies and food-for-work programs. Indeed, by practicing CSR, the Freeport may bring about a holistic, top-to-bottom development that would be beneficial to most, if not all, stakeholders.

Here’s looking forward to the roaring success of the Freeport on its twentieth (20th) anniversary next year.

Lease of real property as a viable public-private partnership scheme for local government units (LGUs)

As previously discussed (please see http://subiclawyer.blogspot.com/2011/01/public-private-partnership-schemes-for.html), local government units (LGUs) have the power to engage in and enter into public-private partnership schemes, one of which is the contract of lease for real properties, pursuant to the Local Government Code of 1991.

In this regard, one of the most essential aspects, if not the most essential aspect, of leasing an LGU-owned real property is the determination of the rental rates. This is where possible violations of the Anti-Graft and Corrupt Practices Act (RA 3019) and related laws may arise. To prevent such possible missteps and avoid any suspicion of wrong-doing, LGUs must observe the proper Commission on Audit (COA) rules.

As early as 1988, the COA has come up with the pertinent guidelines addressing that concern, as it adopted the guidelines formulated by the Department of Public Works and Highways (DPWH), which was, in turn, made pursuant to Executive Order No. 301, issued by President Cory Aquino.

According to said guidelines, as a general rule, rental rates are considered reasonable when they represent or approximate the value of what the Lessee gets in terms of accommodation, facility and convenience from the leased building/space, and the Lessor gets equitable return of its capital or investment in the construction and maintenance of the building/space.

To determine the reasonable rental rate, the COA has espoused the INVESTMENT BUILDING APPROACH METHOD.

Factors to be considered are:

1. Cost land (Market Value) - the lot where the building will be erected. This includes the open areas.
2. Cost of building and/or Equipment/money invested.
3. Recovery period of the Principal/or Machineries and other improvements.
4. Income derived from the rate of interest stabilize rate of the money invested in the property being appraised.
5. Administrative and /or General Operating Services Expenses.
6. Real Estate Taxes.
7. Others

Appraised value of buildings for rent is determined by comparative rentals of space in the vicinity of the same building condition and/or classification. More often this method is used to check the computed rental rate.

Additional pointers in determining the factor value are:

I LOCATION AND SITE CONDITION
II NEIGHBORHOOD DATA
III BUILDING
IV FREE SERVICE & FACILITIES
V RENTAL RATE FACTOR VALUE
VI OTHER INFORMATION AND RECOMMENDATION

To my knowledge, such guidelines have not yet been repealed or modified. It is safe to say then that these guidelines remain valid and effective.

Postscript:

Secretary Jesse Robredo of the Department of Interior and Local Government (DILG) issued Memorandum Circular No. 2011-16 on 31 January 2011, enjoining all local chief executives "to create a Public-Private Partnership (PPP) Sub-Committee in the Local Development Councils to assist the LGUs in setting the economic and social development and coordinate the development efforts as provided for in Section 106 of the Local Government Code of 1991. Specifically, the PPP Sub-Committee shall, among others, assist the LDC in the formulation of action plans and strategies related to the implementation of PPP programs and projects per EO No. 8 s. 2010," in order to localize the mandated powers and functions of the recently established PPP center.

Adoption in the Philippines: Fundamental guidelines and information

For domestic adoption of Filipino children, Republic Act (RA) No. 8552, enacted in 1998, applies.

Under this law, the petitioners must show that they are physically fit to be adoptive parents, have no derogatory records, and are psychologically and emotionally fit to be parents of the adoptee. They must be at least sixteen (16) years older than the adoptee, except when the adopter is the biological parent of the adoptee, or is the spouse of the adoptee's parent.

In certain cases, the requirements on three (3)-year residency and certification of the alien's qualification to adopt in his/her country may be waived for the following:

(i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of consanguinity or affinity; or

(ii) one who seeks to adopt the legitimate son/daughter of his/her Filipino spouse; or

(iii) one who is married to a Filipino citizen and seeks to adopt jointly with his/her spouse a relative within the fourth (4th) degree of consanguinity or affinity of the Filipino spouse.

Either or both petitioners must show that they are gainfully employed and more than financially capable, as may also be shown by ownership of properties, enjoyment of pensions and/or having a business.

As a rule, husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided, However, that the other spouse has signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

The following may be adopted:

(a) Any person below eighteen (18) years of age who has been administratively or judicially declared available for adoption;

(b) The legitimate son/daughter of one spouse by the other spouse;

(c) An illegitimate son/daughter by a qualified adopter to improve his/her status to that of legitimacy;

(d) A person of legal age if, prior to the adoption, said person has been consistently considered and treated by the adopter(s) as his/her own child since minority;
(e) A child whose adoption has been previously rescinded; or

(f) A child whose biological or adoptive parent(s) has died, subject to a six (6)-month prohibition from the time of death of said parent(s).

The written consent of the following to the adoption is also required:

(a) The adoptee, if ten (10) years of age or over;

(b) The biological parent(s) of the child, if known, or the legal guardian, or the proper government instrumentality which has legal custody of the child;

(c) The legitimate and adopted sons/daughters, ten (10) years of age or over, of the adopter(s) and adoptee, if any;

(d) The illegitimate sons/daughters, ten (10) years of age or over, of the adopter if living with said adopter and the latter's spouse, if any; and

(e) The spouse, if any, of the person adopting or to be adopted.

If applicable, the law of the country where either petitioner used to be a resident must allow the adoption of foreign children and will be given reciprocal rights to enter and reside in said country.

Finally, it is important that a court-designated social worker conduct and present the Child and Home Study Reports on petitioners and the adoptee, and recommend the approval of the petition for adoption by the trial court.

That unforgettable Space Mountain experience or admitting fears to kids

I never knew anything about Space Mountain. To me, it was just about another “story-telling-while-on-a-ride” thing; but boy, was I wrong. Much less would I realize that it could teach a lesson.

“Rocket at warp speed to synchronized music and sound effects on this one-of-a-kind indoor roller-coaster. Launch into the inky blackness of the nether reaches of space. Known for its exhilarating hairpin turns, quick dips, high tech sound and special effects, this state-of-the-art space journey takes you past shooting stars, careening comets and into the future! Join the space race today.” So declared Hong Kong Disneyland Resort’s official website about its attraction, Space Mountain, as I learned much later.

Our recent trip to Hong Kong wouldn’t be complete without a visit to Disney. Although we have been there a couple of years ago, our two boys who are a bit older now (ages are 6 & 7), have become adventurous and daring.

My gung-ho second-born son initiated the bold move of joining the relatively short queue at the Space Mountain booth, dragging me, his mom and his kuya (big brother) along. Unsuspectingly, unwittingly, we came into the dark port, faintly lighted by different colored neon lights. Before entering the docking area, there was a warning about backing out for the final time -- that either titillated or scared the wits out of the thrill-seekers.

While my eldest showed signs of trepidation, the younger one appeared vent on taking the challenge. The eldest and I were seated at the front, while the missus and the youngest were at the back of the two-row coach. There was a brief pre-departure instruction and the lowering of the lap-bars.

Slowly climbing at first, we came face to face with a nebula and thousands of seemingly reachable stars and asteroids. A pleasant ethereal music played, and then we hit the void at frightening speed. All hell broke lose.

My son sitting beside me started to cry. I comforted and held him tight. My concern was our safety (i.e., the lap bar might loosen), as we hurtled into dark space. I heard screams behind me, that of a boy and a woman. I was stoic.

At the end of the longest 2.5 minute-ride of my life, my mouth was dry. We got off. As we exited, I saw our picture on a screen – I looked serious, my seatmate’s eyes were wet, the boy behind us appeared daze, and I only saw the hair of the lady beside him. Suffice it to say that I did not have the desire to buy it.

The eldest blamed me and said he didn’t like it. The younger one, who started it all, complained that it was too much for him and began to sob. I let them drink water first. I praised them for being brave and surviving such scary ride.

Then I told them that I got scared, too. That it was ok to feel that way. I said that while my face probably didn’t show it, inside me, I had the heebie jeevies. I started making faces and noises, first that of a cool, suave guy, unafraid of anything (outside); then that of a face-contorting, eyes-bulging scared-y cat (inside). The boys exploded with laughter. They got the picture.

Pakyaw, project employment and job contracting: What every employer must know

The Philippine Labor Code allows hiring of employees on a temporary basis, subject to certain guidelines. Most important is the non-diminution of wages provided by law and other standards, followed by occupational health and safety and observance of due process in case of termination, when applicable. Depending on the need and nature of the business, “pakyaw,” “project employment,” and “job contracting” may be resorted to.

“Pakyaw” or task basis refers to rendering of services by the result, regardless of the time spent for its accomplishment. Workers are hired intermittently and for a short period of time only.

It is a system of hiring a labor group for the performance of a specific work and/or service incidental to the implementation usually of infrastructure project by administration whereby tools and materials are furnished by the principal. For the specific work/service output, a lump-sum payment is made either through the group leader or divided among the pakyaw workers and disbursed using a payroll system.

Workers hired on this basis should receive wages not lower than the minimum wage rate for that particular industry.

“Project employee” is defined as one whose “employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.”

In the case of Caseres v. Universal Robina Sugar Milling Corporation, the Supreme Court said that the repeated and successive rehiring of project employees does not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee.

If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required.

“Job contracting” or subcontracting happens when an employer, referred to as the principal, farms out the performance of a part of its business to another, referred to as the contractor or subcontractor. For the purpose of undertaking the principal's business that is farmed out, the contractor or subcontractor then employs its own employees.

Contracting is allowed if the following conditions concur:

a. the contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility, according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;

b. the contractor or subcontractor has substantial capital or investment;

c. The agreement between the principal and the contractor or subcontractor assures the contractual employees entitlement to all occupational safety and health standards, free exercise of the right to self organization, security of tenure, and social and welfare benefits.

Yes, there’s a real Sitio Tralala

Not far away from the city proper of Olongapo, in a barrio to the north-east called Gordon Heights, a 2-hour arduous climb over a steep incline will bring you to the top of a hill where a little village stands: Sitio Tralala.

As part of Junior Chamber (Jaycees) of Olongapo’s activities, we woke up one early morning days before Christmas last year, to bring toys and snacks to more or less a hundred kids in Sitio Tralala. With a pick-up, a van and a car, we began our journey from a fastfood joint in Magsaysay Ave. and proceeded all the way to the end of the paved road in Gordon Heights.

The trek started comfortably, with a flowing river running alongside the trail. Tall and leafy trees protected us from the sun. A few minutes later, the trees were gone, replaced by talahib and/or cogon grass. The easy walk turned to climbing over a 45-degree slope, marked by just 2 brief stops – for catching breath and saving face, hehe -- until we reached the top. I was wondering which part of my body would give up first, my legs or my heart? Maybe pride got in the way and helped me survive.

And survive we did as we scanned the view unfolding before us: a meandering river, greeneries, the valley below, Subic Bay beyond, and the mountain range seemingly watching over the city.

The village had a half-completed church, nipa houses located few and far between, and dozens of wide-eyed and happy Aeta kids. Soothed by the gentle breeze and re-energized by bottles of water, we mingled with the kids, distributed spaghetti, bread and drinks. Then, on with the fun games and the awarding of prizes where everybody was a winner. All through out, their amused parents were watching and cheering.

Yes, indeed, Sitio Tralala is real.

Costs of suit: coverage and applicability to intra-corporate controversies

Usually, when one files a suit in court, whether civil or criminal in nature, he asks the court for the payment of damages, attorney’s fees and costs of suit by the other party. A person who files a responsive pleading to a complaint can also ask for the same. This article will focus on “costs of suit.”

The party that finally prevails is entitled to the costs of suit as a matter of course, unless the court for special reasons adjudged otherwise. The Revised Rules of Court states that:

“Unless otherwise provided in these rules, cost shall be allowed to the prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law.”(Section 1, Rule 142)

In first level courts (e.g., Metropolitan Trial Courts, Municipal Trial Court in Cities, Municipal Trial Court), the costs shall be taxed by the justice of the peace or municipal judge and included the judgment. In superior courts (Regional Trial Courts, Court of Appeals, Supreme Court), costs shall be taxed by the clerk of the corresponding court on five days' written notice given by the prevailing party to the adverse party.

With this notice shall be served a statement of the items of the cost claimed by the prevailing party, verified by his oath or that of his attorney. Objections to the taxation shall be made in writing, specifying the items objected to. Either party may appeal to the court from the clerk's taxation. The costs shall be inserted in the judgment if taxed before its entry, and payment thereof shall be enforced by execution. (Section 8, Rule 142)

What costs may be recovered then? The specific items and rates may be found under Sections 9, 10 & 11, of Rule 142.

May costs of suit be recovered in intra-corporate controversies? Intra-corporate controversies are not mentioned under Rule 143 and Section 2 of Rule 1. Both say that the Rules is inapplicable to cases involving land registration, cadastral and election cases, naturalization and insolvency proceedings, and other cases.

Also, the Rules of Procedure for Intra-Corporate Controversies expressly provides that: “The Rules of Court, in so far as they may be applicable and are not inconsistent with these Rules, are hereby adopted to form an integral part of these Rules.” (Section 2)

But note that while costs of suit may be allowed to the prevailing party in cases concerning intra-corporate controversies, it is not immediately executory as it must be implemented in accordance with Section 8 of Rule 142. (See also Heirs of Divinagracia vs. Ruiz, et. al., GR No. 172508 [2011])