Business interests: Jejomar Binay, Rodrigo Duterte

GMA News Research looked into the business interests of the presidential candidates and their immediate family based on the candidates’ own declarations in their Statements of Assets, Liabilities and Networth (SALN) and the businesses they registered at the Securities and Exchange Commission (SEC).

Official records show that businesses of the members of the families of two presidential candidates transacted with the city government headed at that time by the candidate.

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Vice President Jejomar Binay and Davao City mayor Rodrigo Duterte, both with more than two decades of local government rule, have apparently approved transactions with businesses owned by family.

“May conflict of interest pag titingnan natin na bakit nila bibigyan yung kamag-anak nila,” said Dean Maria Fe Mendoza of the  University of the Philippines National College of Public Administration and Governance.

“Kasi baka naman may... legitimate application. And yung pagkuha ng mayor's permit, may proseso siya. Ngayon, ang mayor ay noted na lang,” Dean Mendoza added.

While the authority to issue the permit lies on the local chief executive, Mendoza puts an emphasis on the process. “Sa business permit, kailangan mo ang barangay clearance, kailangan mo ang fire (safety inspection certificate), kailangan mo ng sanitary (permit)... So maraming mga layers na pagdaraanan... ,” Mendoza said.

The dean, however, did not dismiss the possibility that being related to the mayor may have an effect on the process.

Said Mendoza, “Maaaring mangyari yon lalo na sa kultura natin na. ‘Ay si mayor pala, yung asawa pala o yung anak’. So parang meron kang hiya kasi culturally, parang you look up to the mayor as the head of the local government unit. So talagang baka may hiya factor. ...  you just gave in and gave the (barangay) clearance right away. ”

Duterte businesses

In Davao City, at least six companies registered with the SEC under the names of Duterte’s children—Sebastian, Davao City Vice Mayor Paolo and former mayor Sara -- have secured business permits for this year from the Davao City Hall.

Davao City Mayor Duterte has been the mayor of the City for 22 years, from 1988 to 1998, in 2001 to 2010 and from 2013 to present.

All the six companies of the Duterte siblings are engaged in the food business. The declared primary purposes in their respective Articles of Incorporations were to “establish and maintain restaurants, coffee shops”, among others and to “make, cook, arrange, serve and cater food.”

According to the 2014 GIS of City Hall King Chow Foods Corp, Sara is a board member of the company. The former Davao City mayor also owns 20 percent of City Hall King Chow, which translates to P250,000-worth of paid shares.

Sara is also among the board members and stockholders of Davao Emerging Taipans Corp, based on its 2014 declaration. She owns 10% of the company with 3,750 shares and amount paid at P375,000.

Davao Emerging Taipans Corp was registered with the SEC on May 19, 2004, while City Hall King Chow Foods Corp was incorporated in the SEC on May 9, 2007. Sara was Davao City’s vice mayor from 2007 up to 2010, and was its mayor from 2010 to 2013.

Brothers Paolo and Sebastian are business partners in at least two Davao City-based companies.

They are both board members of Grand M.D. Business Development Corp, according to records of the company in 2015. Each also owns 5 percent of the business with 125 shares each. The total amount subscribe to by Paolo and Sebastian is P25,000. Grand M.D. Business Development Corp was incorporated on September 26, 2007.

A few weeks later, Grand King Foods Corp was also registered with the SEC on October 11, 2007. Both companies are engaged in operations and maintenance of restaurants.

The two companies, however, only obtained their first permit from the city in 2011. 

Like that of Grand M. D., Paolo and Sebastian are stockholders and board members of Grand King Foods Corp, based on its 2015 GIS. They also each own 5 percent of the company, amounting to a total of P25,000 amount subscribed.

The mayor’s youngest son, Sebastian is a board member of two companies, the SPMC Chow Foods Corp. and Timesquare Chow Foods Corp. Both are engaged in operations related to food.

According to the companies’ respective papers, Sebastian owns 15 percent of SPMC and 20 percent of Timesquare Chow. These translate to P 37,500 amount subscribed for each of the companies.

We tried the contact details declared in their SEC disclosures and found out that at least one of these companies was operating a popular fast food chain.

The six companies have a total of  P73.59 million-worth of assets as of 2014.

GMA News Research was also able to trace the names of the Dutertes in 13 other companies registered with the SEC, including those based outside Davao City. These include a law firm, and companies providing freight services, general advertisement, transportation, and real estate services.

Mayor Duterte has declared in his SALN his business interest in Honda Cars General Santos Inc. Based on papers filed at the SEC in 2104, Duterte holds a 3 percent ownership of the company.

Samuel Uy, the businessman friend of the mayor, holds a 7 percent ownership of Honda Cars General Santos. The mayor has declared in his SALN that he owes Uy P1 million.

Reached for comment about the Davao City businesses, Duterte said,“Ma'am kailangan ang tao sa mundong ito mabuhay. Just because they are my children does not, papaano ito kasi dahil anak ko sila hindi na sila mabuhay? Eh kung ako magbibigay ng pera nyan, kung ako magbibigay ng pera nyan ang salary ko hindi tama, e di ako magbibigay mag graft and corruption ako. They are of age yung isa mayor na yung isa vice mayor and they have a family to support.”

Binay businesses

Vice President Jejomar Binay was mayor of Makati for 21 years before he won the second highest post of the land in 2010.

In those more than two decades of Jejomar Binay’s almost unbroken reign in Makati, at least 14 entities listed under the names of Binay’s immediate family operated and applied for business permits at the Makati City Hall.

The owners of these various businesses include the vice president’s wife Elenita, son former Makati Mayor Jejomar Erwin “Junjun”, and daughters Senator Nancy and House Representative Abigail.

In a reply to GMA News Research, the vice president’s legal counsel Claro Certeza said that there is no conflict of interest in the case where the relatives of the mayor, or even the mayor himself, operates a business in his or her respective city or municipality.

“The Department of Interior and Local Government (DILG) has consistently issued opinions holding that no conflict of interest exist where Mayor issues a Mayor’s Permit to his own business,” Certeza stated.

He cited DILG Legal Opinion No 30 series of 2013 which says, “While it is true that the City Mayor issues licenses and permits and has the power to revoke the same for any violations upon which said licenses or permit have been issues pursuant to a law or ordinance, the issuance thereof depends on whether or not all the requirements set forth by law or ordinance for its issuance are met/submitted. And once all such requirements are met, approval thereof by the mayor becomes purely ministerial, not discretionary."

GMA News Research checked the cited legal opinion. It was issued as a reply to the counsel of an incumbent mayor asking for the agency’s opinion as to whether the mayor should divest her shares from a company, seeking a mayor’s permit, where she is a major shareholder.

Most of the Binay businesses which obtained business permits in the Makati are branches and expansions. Of the 14 different Binay businesses that have transacted with the Makati City government when the Vive President was still its chief, only six have applied for permits this year.

Jejomar Erwin Binay stepped down as Makati City mayor in 2015; then Vice Mayor Kid Peña now sits as the local chief executive.

Jajan Marketing, where Nancy is sole proprietor, is registered with the Department of Trade and Industry. It was declared in the senator’s 2014 SALN. It applied for permits for four different locations in various Makati City malls.

Its papers at the Makati City Hall described the business as ‘non-essential retailer’ and ‘ice cream/candies’. Only two of these business locations have renewed for 2016.

Elenita’s flower shop Blooms and Bouquet is registered with the DTI. The shop applied for permits for two locations at Greenbelt and  JP Rizal Street.

MAS Binay Enterprise, declared in Abigail’s SALN, also secured business permits for this year as “non-essential retailers.”

The law firm Subido Pagente Certeza Mendoza and Binay acquired business permits for the years 2004 to 2016. Abigail is an incorporator, and is currently on leave from the firm.

Accountant Eric J. Magcale, a member of Philippine Institute of Certified Public Accountants (PICPA), explained the difference between DTI-registered businesses and SEC-registered corporations.

“Mas may direct personal link kasi sayo pagka sole proprietorship registered under DTI,” Magcale said. “So traceable directly sayo. Pagka corporation na yan or partnership na yan, hindi na sya directly traceable sayo because you only own your stake on the corporation or in the partnership.”

Magcale added that it’s easier to monitor the financial disclosures of SEC-registered corporations because they are accessible to the public.

The Binays have businesses on real estate, veterinary services, food, and cosmetology services that transacted with Makati City hall when the VP was still mayor.

Real Estate developer Hermitage and Manor Realty and Management Corp secured business permits from 2003 to 2006. The Binay siblings – Abigail, Nancy and Junjun—are officers and stockholders of the company based on the 2010 SEC records of the company.

The Millenium Food Chains Corp, which operates restaurants, applied for permits from the city from 2003 up to Binay’s last term as mayor in 2010. Abigail and Junjun are board members and stockholders based on the company’s 2015 SEC records.

Makati City gave business permits to Petsters Company in 2004 and 2005. Abigail is an incorporator of the pet shop.

Spouses Abigail and Luis Campos are the incorporators of Xnails, Inc, which secured a business permit from Makati in 2007.

A&T Stores Specialists, where Junjun and Abigail are incorporators, had Makati permits from 2003 to 2004. Incorporated in 2002, this company’s status now at the SEC is marked “revoked.”

The Binays including the VP’s wife, his kids and their spouses’ have business interests in at least 26 companies registered with in the SEC or DTI, including those based outside of Makati City.

These businesses are engaged in construction (Aquastar Consolidated Environmental Services (ACES) Inc), poultry and livestock (Dalisay Farm Corp), food (L&N Food Corp, Manas & Campos Corp, Purple Ginger Inc.), veterinary services (Stony Road Horse Farm Inc.), real estate (Dasmariñas Realty Corp, J.A. Property Holdings Corp, Lakan Tagkan Real Estate Corp, Tetrarchy Inc), services (St. Andrews A/C Services Inc.), trading of various items (First Responder Safety Solutions, Mistico Inc, Mydonose International Inc, Seahawk Retail Ventures, Inc, and Balagan Sporting Equipment).

Nancy and Junjun have shares of stock in two separate holding companies. Nancy owns a little less than 100 percent of Supremecapital Corp. She declared this in her 2014 SALN.

Junjun, on the other hand, declared his business interest in Bravehouse Holdings in his 2014 SALN.

The 2014 financial statements showed that SupremeCapital and Bravehouse Holdings have P4 million shares each at Alphaland Balesin Island Club Inc., an exclusive, member-only resort in Polilio, Quezon Province. —with reports from Dianne RJ Obdin, GMA News Research, and Tina Panganiban-Perez and Vonne Aquino, GMA News