Chevron defends Batangas lease, says contract ‘beneficial’ for gov’t

Chevron Philippines Inc. (CPI) on Wednesday defended its lease agreement for a state-owned property in Batangas as "beneficial," but maintained that its lines are open to discuss the matter with the government.

CPI said its contract with Batangas Land Co. Inc. (BLCI) -- subsidiary of state-owned National Development Co. (NDC) -- was above board, and was in line with Philippine regulations.

"The Chevron Philippines (CPI) lease contract with BLCI on the Batangas property was entered into in compliance with all Philippine laws and regulations, and has been beneficial to both the government and CPI," it said in a statement sent via mobile message.

The land in San Pascual, Batangas forms the hub of Chevron's transportation and supply operations in the Philippines.

Chevron's statement came after the Department of Finance (DOF) said it found the contract "onerous" as CPI has been paying the government less than a peso per square meter for a property that should fetch at least P17.90 per square meter monthly.

Finance Secretary Carlos Dominguez III, who also sits as an NDC Board Member, described the lease deal as "another government contract with onerous provisions."

The DOF said the lease contract with BLCI allowed Chevron to pay a monthly rental fee of only 74 centavos per square meter, significantly lower "minuscule" to the current fair market rental value of P17.90 per square meter in the area.

Despite this, Chevron said it remains committed to the Philippines and will continue to communicate with the administration.

"As one of the pioneer energy companies in the Philippines which has been operating here for over a hundred years, our commitment to the Philippine market remains strong," it said.

"We will maintain open communication with the Government, an important and valued partner, on this matter," it elaborated. — RSJ, GMA News