COA orders review of unprofitable TIEZA properties

The Commission on Audit has ordered the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to review the operations of two golf courses and one eco-tourism village that failed to turn a profit for three consecutive years.

The maintenance of Club Intramuros Golf Course (CIGC), Gardens of Malasag Eco-Tourism Village (GMETV), and the Balicasag Island Dive Resort (BIDR) already cost P105 million, part of which was the loss on record of P28.4 million last year, the commission said in its 2017 audit report.

“We recommended that Management conduct a study of each entity’s viability and consider the review and enhance the existing sales and marketing revenue generating capabilities of the different entities in order to reduce its operating losses and eventually become profitable.”

TIEZA must revisit the marketing plans of Club Intramuros, Gardens of Malasag, and Balicasag Island, and put in place measures to prevent incurring further losses, or possibly sell the properties to a private buyer.

“TIEZA, as the implementing arm of the government in tourism infrastructure, should efficiently manage its entities to be able to encourage investors to invest in tourism industry of the country,” state auditors said in the report.

The commission said the properties incurred losses and received P92.5 million in subsidies last year.

The subsidies also covered two properties—Zamboanga Golf Course & Beach Park (ZGCBP) and Banaue Hotel & Youth Hostel—that made a combined revenue of P13 million.

COA said the properties should not be subsidized since these were developed to help fund tourism infrastructure projects.

Discounts, poor marketing

Balicasag Island failed to meet its target income last year and lost P2.4 million due to inefficient marketing strategies, according to COA.

The management of Club Intramuros also gave discounts to its patrons despite incurring operating losses, the commission said.

“Due to management’s failure to consider the current operation and financial standing of CIGC and to come up with the final guidelines on the granting of discounts and free of charge privileges to golf players, CIGC continuous to suffer losses from its operations for a number of years now,” it said.

It flagged the management of GMETV for lack of monitoring of the unfinished construction of eight cottages that were planned in 2015.

TIEZA has informed COA that it intends to privatize by entering  into joint venture agreements. Its chief operating officer Pocholo Paragas is now reviewing the guidelines regarding this option.

TIEZA also said its board of directors allotted P357.6 million to rehabilitate its business entities, and touted how the respective expenses have been reduced.

Travel tax

In the same audit report, COA flagged the inaccurate report of TIEZA on its travel tax collections due to inaccessible records from local airlines.

TIEZA has yet to collect P92.15 million from airlines, noting that P78 million of the outstanding balance is due from flag-carrier Philippine Airlines. The rest are receivable from other airlines.

COA blamed the advent of online ticketing for inaccurate tax collection records.

“The accuracy and completeness of travel tax collections remitted by carriers on tickets purchased abroad through online ticketing cannot be verified since records are not submitted by such carriers,” it said.

The commission encouraged TIEZA to file appropriate charges against erring airlines.

TIEZA said it has collected P4.977 million of its receivables with the unsettled balance endorsed to its legal department. —VDS, GMA News