Letter to Quiros on Phiippine properties in Japan from Francis Yu

To: Mr. Conrado de Quiros
From: Francis S. Yu
Re: Philippine Properties in Japan

Allow me first to introduce myself. My name is Francis Yu, a Filipino
living in Japan since 1984. After finishing B.S. Architecture from the
UP Diliman in 1982, I was able to obtain a scholarship to do my Masters
degree at the University of Tokyo, which was extended eventually for a
Ph.D. in architecture. After school, continuing on to work in Japan
seemed to be the natural (and I must admit, selfish - in the sense that
I did not return to the Philippines) thing to do.

I am able to go back home once or twice a year, and during those short
breaks, I have gotten a lot of pleasure and enlightenment from reading
your columns in the Philippine Inquirer. The manner in which you espouse
your beliefs is witty, fearless and convincing - and even in the few
instances that I do not quite agree, I am always compelled to respect
your views. (This is not empty flattery, I really do mean it.)

I write to you today with vested interests (but of course) - to try to
get you interested in writing about an issue in Japan that concerns
Filipinos but seems to be unable to generate enough attention in the
Philippines: stubborn attempts by the Arroyo government to quietly,
hurriedly, forcibly and deviously dispose of the Philippines properties
in Japan.

We, concerned members of the Filipino community in Japan, could continue
lobbying our senators and congressmen to interfere, as we have and will
continue to do so, but time is not on our side. The government is ready
to sign contracts in the next two weeks, and much noise has to be made
to prevent it from doing so.

Here are some background information for your reference:

1) The Philippines has 5 properties in Japan:
i) Kudanshita, Tokyo property on which stands an historic pre-war
mansion that now serves as the Philippine ambassador's residence;
ii) Roppongi, Tokyo property which used to be a baron's mansion with
what is reputedly the first planetarium in Japan, but is now a new
building partly used as the Philippine embassy;
iii) Shibuya, Tokyo property which used to house the offices of the
Japanese agency that handled WW2 reparations to the Philippines; and
eventually became the old Philippine embassy before its transfer to
Roppongi;
iv) downtown Kobe property located in the central part of this city;
v) another Kobe property located on the outskirts of the city in a plush
residential district. Except for the Kudanshita property which was
acquired by the Laurels during WW2 and eventually passed on to the
Philippine government, these properties were obtained as part of the WW2
reparations from Japan.

2) In 1989, the government under Corazon Aquino announced that it was
selling the Roppongi property to raise money. Protests by the Filipino
community in Japan ensued. The written petitions escalated into street
rallies in Tokyo - which went unpublicized in a Manila too absorbed in
domestic issues, but which received attention in the Japanese press -
leading many scandal-averse Japanese bidders to back out. The bidding
ended in failure. Several sympathetic lawmakers and government officials
pursued the issue, and in 1991, the Philippine Supreme Court ruled that
these properties were national patrimonies and could not be sold without
a national referendum.

3) Meanwhile, the Philippine government explored other means of
profiting from Roppongi without actually selling the property. An
agreement was reached with Mitsui Fudosan, a major Japanese property
developer, to put up a condominium building that would house the
Philippine embassy on the lower two floors and the basement. Details of
the agreement are not clear as the process was not made open. Suffice it
to say that as a result of not consulting the Filipino community, the
new embassy ended up to be a glamorous building that did not solve many
of the problems encountered in the old embassy and did not accommodate
for the needs of the Filipino community - for example: an ambassador's
suite spacious enough to easily dance the foxtrot in, furnished with
French-designed Italian-made sofas; while the consular section - which
serves hundreds of Filipinos daily - is a small hall in the basement
reached through the backdoor, effectively forcing our countrymen to wait
out in the freezing sidewalk in the winter.

4) In August 2003, the Arroyo government discretely published an ad in
the newspapers soliciting bids for the development of the remaining
properties. This "stealth attack" was hugely successful as it was not
until October that the Filipino community here got word of the new
attempt. The bidding schedule was particularly disturbing since it was
timed so that awards could be made by the day prior to the moratorium on
property dealings which kicks in 6 months before the elections - a
blatant attempt that we in Japan see as a desperate effort to quickly
raise funds for the election campaign. A petition was sent to President
Arroyo, signed by members of the Filipino community here; and some
lawmakers were lobbied to make noise as well. Towards the end of
November, no less than Sen. Manuel Villar issued a statement that he had
been informed that the bidding was not pushing through.

5) In February 2004, to the great surprise of people in Tokyo, articles
suddenly start appearing in the Philippine newspapers that the Arroyo
government was prepared to award 50-year leases for the Shibuya and two
Kobe properties in exchange for 948 million pesos (1.78 billion yen)
under a "hybrid build-lease-transfer" scheme. The Kudanshita property
was excluded from the award - we surmise in part to pacify the
ambassador, who lives there, who had been against the disposal of the
properties. The awards are to be given to two companies: Urban
Corporation, a relatively young property developer based in Hiroshima;
and a certain Berg Corporation, which is not listed anywhere in Japan.
Information on the other bidders, prices submitted, and the details of
the schemes to be undertaken were not announced, for reasons we cannot
understand other than an aversion to transparency. Even senior level
embassy officers in Tokyo were ignorant of the details throughout the
bidding process.

6) Some of our lawmakers have picked up the issue. An argument was made
by Sen. Joker Arroyo that a 50-year lease is tantamount to a sale and is
an attempt to circumvent the law in violation of the spirit of the
Supreme Court ruling. Other points include the lack of transparency and
the unnecessary hurry. To evade the potential political fallout,
Malacanang passes the buck of making the final decision to the DFA.
Undersecretary Franklin Ebdalin announces his recommendation that
Malacanang re-study the matter more carefully, but he is over-ruled by
Secretary Delia Albert, who insists that the awards will be made as
originally announced.

Concerned members of the Filipino community in Japan have again renewed
efforts to prevent what we see are foolish and stubborn attempts by the
Arroyo government to stick the Filipino people with a bad deal. We are
not bull-headedly against the development of the property - indeed, if
the Filipino nation can gain from the productive use of these national
patrimonies, we should actively pursue these means. There are, however,
three conditions that should be met: 1) that the development process be
totally transparent, 2) that the Filipino people get a fair deal -
maximum income possible from the properties, without hefty broker
commissions and shady kickbacks - and the use of the proceeds be clearly
specified; and 3) that the needs of the Filipino community in Japan be
provided for in the new developments.

1) Transparency
Self explanatory as you know better than I do how much shady dealing the
current administration is being accused of.

2) Fair Value
To put the measly 948 million pesos (1.78 billion yen) figure in proper
perspective:
According to land price indexes released annually by Japanese government
agencies, the price of land in the adjacent vicinity of our Shibuya
property ranges from 740,000 yen (National Tax Agency data) to 850,000
yen (Ministry of Land, Infrastructure & Transport data) per square
meter. At 2,489 square meters (using the low figure of 740,000 yen), the
Shibuya property alone is worth at least 1.84 billion yen if sold
outright. In Japan, there is a thing called "shakuchiken" (right to
lease land for a fixed number of years) which is priced separately from
the monthly rent. For a 50-year lease in popular Shibuya, the
shakuchiken is easily worth 50, even 70 or 80 percent of the price of
the land. This means that the Philippines should be getting a minimum of
1.28 billion yen on top of the monthly rents just for Shibuya alone.
Another simulation: what if we just rented out the Shibuya property as a
level parking lot? A quick layout shows that the property can
accommodate at least 100 cars. In Shibuya, monthly rental on parking
spaces range from 35,000 to 50,000 yen per stall. Assuming a
conservative 25,000 yen, 100 cars at 50 years would yield an income of
1.5 billion yen. Note that there would be almost no capital investment
for this except perhaps an automatic bar at the gates. These figures
show clearly that a paltry 1.78 billion yen for all 3 properties is a
very bad deal for the Philippines. It is difficult to think that the
Arroyo administration is naive enough not to have undertaken due
diligence on the value of the properties. The question is, who is
profiting from the big difference in price?

3) Filipino Community Needs
While the Filipino community in Japan - made up mostly of OFWs that
President Arroyo "honors" as modern-day heroes in a desperate attempt to
win their votes - has not taken to occupying the public plazas to the
same extent as in Hong Kong, it experiences an acute lack of spaces for
gatherings. And in contrast to Hong Kong, police authorities in Japan
are not as sympathetic to unauthorized mass gatherings in public areas.
Filipino organizations often use coffee shops (to the annoyance of the
owner and other customers) or rooms for rent for their meetings. For
community or organization parties, expensive halls are either rented, or
the churches have to be begged to lend their halls. There is likewise no
space to hold the many social and welfare programs - cultural dance
practices, computer training classes, choir practice, cooking classes,
Nihongo lessons, lectures, etc. - that could otherwise be undertaken.
The embassy, in fact, CHARGES rent for the use of one of their halls by
the federation of organizations whose creation they had, in the first
place, initiated. Aware of the severe limitations of our government’s
funding, the Filipinos in Japan have desisted in asking for a solution
to this problem. It came to our attention, however, that GMA recently
inaugurated a “Bayanihan Center” in Singapore (the inception of which
she has little to do, but has naturally usurped credit for). This is an
old 4-storey school building having 28 rooms which the Singapore
government offered to the Philippine government for 6,500 Singapore
dollars a month - half the actual price (supposedly to improve
RP-Singapore relations in atonement for Flor Contemplacion, I am told).
With contributions from some Singaporean and Philippine institutions and
companies, improvements were made, and the center now includes a
library, kitchen for baking & cooking classes (and even a karaoke
room!), with over 500 OFWs enrolled in skills-training programs. It is
ironic then, that in Japan where our country already has property, the
government has not only done nothing for the OFWs, it is attempting to
rob them of the use of those buildings. If the government wishes to
develop these properties for maximum revenue, it should at least
incorporate facilities for the OFWs in these new developments - after
consulting with them as to what their needs are.

In a sense, the Philippine properties in Japan are the perfect cheese
for an avaricious mice to gobble up. Despite the fall of land prices in
the past decade, land prices remain high in Japan compared to other
countries, making these properties among the most valuable of the few
real estate holdings we have abroad. And unlike the US, UK, Hong Kong,
Singapore and other countries where the lingua franca is English or some
alphabet-based language, and the systems are comparatively Western and
thus familiar, information on Japan is difficult to obtain, much less be
understood by Filipinos - most Filipinos have no image of Japan beyond
Toyota cars, Sony Walkmans, Game Boys and anime. Filipinos in Japan are
also less established than their counterparts in other countries, given
restrictive Japanese immigration policies, and are less likely to voice
out their concerns - thus the low awareness in the Philippines regarding
the situation in Japan. As the more established members of the Filipino
community in Japan, we see it as our duty to protect these properties
from exploitation by rapacious government officials - however, we need
all the help we can get.

For your information, I have attached some articles / messages below.

Francis S. Yu
Architect
Japan

-----------------------------
ATTACHMENTS FOLLOW
-----------------------------
Gov’t bids out Japan property for \1.78 B
By Des Ferriols
Publish Date: [Friday, February 13, 2004]

The government has bid out the development contracts for three of its
remaining properties in Japan for a total of \1.78 billion, a
transaction that is expected to fan controversies if approved by the
Arroyo administration before the May elections.

Sources from the privatization office said all three properties were
successfully bid out last year under a hybrid build-operate-transfer
(BOT) scheme.

According to the sources, the privatization of the properties would give
the government at least \356 million when the agreement is signed and
another \384 million after three months. The remaining \1.08 billion
will be paid over a period of three years.

The properties include one four-storey building space in Tokyo with a
total floor area of 2,489 sq.m. and two other properties in Kobe with
3,014 sq.m. and 764 sq.m., respectively.

The sale of the assets is expected to draw flak from both chambers of
Congress, even if the transaction excludes the lot where the Philippine
embassy and the Ambassador’s Residence are located.

Sources said this is the most coveted of all the country’s remaining
assets in Japan but the sale and disposition were being aggressively
opposed by former foreign affairs secretary Domingo Siazon, who is now
the Philippine ambassador to Japan.

"They live there and they don’t want to be booted out so, naturally,
they don’t want the government to sell the property," said a source.
"Their argument is that it is historical because Yoko Ono once stayed
there."

The source said the transaction for the sale of the properties is now
pending approval in Malacañang. The Philippines has until March to
decide and, if it doesn’t, the bids will lapse and the disposition will
be deemed a failure.

A total of 11 firms have submitted bids for all three properties.

"All three properties will be leased for 50 years under a variation of
the BOT scheme," the source said, without naming the companies. "The
properties are leased for an initial period of 25 years which would be
renewable for another 25 years."

The 50-year tenure is the maximum allowable by Philippine laws but
sources said the properties had to be leased that long to get the
maximum price.

They said proceeds of the bidding could be used to pay off some of the
country’s yen-denominated obligations.

-----------------------------
From Tribune:
Won't shelve plan to lease properties in Japan DFA
By Michaela P. del Callar
Wednesday, 03 03, 2004

Foreign Affairs officials are apparently losing their coordination as
evidenced by the denial of its chief, Delia Albert, on the statement
made earlier by one of her officials, Undersecretary for administration
Franklin Ebdalin, that the department will issue a recommendation to
Malacanang to temporarily shelve its plan to lease three idle government
properties in Japan until after the May 10 elections.

Albert denied the existence of such a recommendation.

Ebdalin, however, was with Albert when he made the statement before
members of the media.

When asked about the issue on the Philippine properties in Japan, Albert
referred the question to Ebdalin during which the Foreign Affairs
secretary made no move to correct Ebdalin on the spot.

Heeding the Senate's call, the Department of Foreign Affairs (DFA) drew
the recommendation in the light of speculations that the lease of the
properties is a "midnight deal," Ebdalin was quoted as saying during the
press briefing.

According to Albert, however, the recommendation of a Finance
department-led inter-agency team in charge of government properties in
Tokyo, of which the DFA is a member, "still stands."

The recommendation, according to the secretary, "is to enter into lease
agreements that will utilize and preserve the properties in a manner
that would benefit the Philippines and in a manner that would preserve
the ownership of the Philippines."

"The department stands by that recommendation," she stressed.

Albert is currently in Vietnam attending the Asean Ministerial Retreat,
while Ebdalin is on an official visit to China.

Reliable sources said the DFA had issued the denial on pressure from
Malacanang.

Without naming names, the sources said, Palace officials were "furious"
over the news report that came out in the Tribune and another
broadsheet.

"The fact is that I have not made any such recommendation to the
President. I have been closely coordinating this matter with Secretary
Juanita Amatong of the Department of Finance, and the last time I saw
her, which was just before I left for my official visit to Vietnam, our
common position was to proceed with the lease," Albert said.

"We continue to believe that our decision to maximize the use of our
properties will redound to the benefit of the Philippines. We stand by
this decision as fully complying with existing laws and regulations,"
she added.

-----------------------------
Japan properties on lease, not for sale, clarifies DFA
03/11 11:20:48 AM

The Department of Foreign Affairs (DFA) denied reports Tuesday that
there was disagreement within the government agency on the disposition
certain government properties in Japan through a lease arrangement.

DFA secretary Delia Albert said that contrary to claims, the department
is united in moves to allow the government "to maintain and develop our
properties while at the same time making these properties work to the
benefit of the government, through lease arrangements."

Albert added that Undersecretary Franklin M. Ebdalin and Philippine
ambassador to Japan Domingo L. Siazon share her position to maximize
benefits from the government properties in Japan.

According to Ebdalin, "the government's decision to fully utilize
government properties abroad, including those in Japan, is not an ad-hoc
decision meant to address a short-term need."

"Rather, it involves a process characterized by sound deliberation and
well-researched options contributed by the members of the inter-agency
committee," he pointed out.

Albert added, "I would like to emphasize that in all our actions in
connection with these properties, we will retain ownership. Selling
these properties was never a consideration."

-----------------------------
Senate geared to block planned sale of gov't assets in Tokyo Tuesday,
02/17/2004

Malacañang is up against its own allies in the Senate as more
administration lawmakers in the upper chamber have vowed to block the
reported planned selling of government properties in Tokyo saying
Congress will not hesitate to lift a finger if the executive department
will persist on the plan.

Sen. Joker Arroyo issued the stern warning as he accused the Palace of
circumventing the Supreme Court's (SC) standing injunction against the
disposition of the country's properties abroad by embarking on long-term
lease, instead of outright sale.

"It is an axiom of the law that what one cannot do directly, he cannot
do indirectly. That is exactly what the government is doing," he said in
reference to the disclosure over the weekend made by colleague, Sen.
Manuel Villar Jr. said, on the alleged bidding of Philippine properties
in Japan totaling to P948 million.

He pointed out the high tribunal, as early as 1990, ruled in Laurel vs
Garcia and Ojeda vs Garcia cases that the Tokyo properties are part of
the public domain and as such are "outside of the commerce of man."

"It cannot be alienated (as) property belonging to the State is intended
for some public purpose," the senator, quoting the SC ruling said.

The executive department said the properties are in the state of
disrepair and therefore must be disposed of, but the high court even
then had decreed that "even the failure by the government to repair the
building in Roponggi is not abandonment since there simply was shortage
of funds...obviously any property outside the commerce of man cannot be
tapped as a source of funds," he said.

"The SC, in clear and unequivocal language, declared that it is not for
the President to convey valuable property of the government on his or
her own sole will. Any such conveyance must be authorized and approved
by a law enacted by the Congress. It requires executive and legislative
concurrence," Sen. Arroyo pointed out.

"Thus, the executive must get congressional concurrence to negotiate the
disposition of the properties," he added.

Based on the facts laying before them, Sen. Arroyo could on only surmise
what he described as an obvious intention by the Palace to go around the
SC injunction by negotiating a 50-year lease instead of an outright
sale.

"A lease that long is pretty much the same as a sale. Acts of dominion
and ownership will be exercised by the lessee for a period that would
last a generation.

"The executive must cease and desist from embarking on a long-term lease
of 50 years because if it persists in doing so, it would violate the
law," he emphasized.

It is for these concerns that Sen. Arroyo threw support to Villar's move
to inquire on the matter.

His colleague's plan of action to convene the foreign relations
committee, is most welcome and timely, he said.

Sen. Arroyo noted that in 1989, then Sen. Leticia Shahani, chairman of
the same panel, conducted a probe on the following a disclosure of the
similar case, also concerning Tokyo properties, because it raised
serious policy considerations.

"The present Senate can do no less if the executive persists," he said.

-----------------------------
2004.3.05
PRESS STATEMENT
Filipinos in Japan urge Philippine government: Use your math!

Filipinos in Japan condemned recent attempts by the Philippine
government to once again dispose of the Philippine properties in Japan.
The properties are protected by a ruling from the Philippine Supreme
Court; but the government, through the Department of Foreign Affairs, is
on the verge of signing contracts for these properties.

Filipinos in Japan strongly criticized Foreign Affairs Secretary Delia
Albert for being blind on forcibly unloading the properties for fifty
years, under the guise of a "hybrid" build-operate-transfer scheme.
According to Nestor Puno, Chairman of Migrante Party List Japan chapter,
“Albert is acting like a dictator at the DFA by brushing aside the
recommendation of Foreign Undersecretary Franklin Ebdalin, who urged
Malacañang Palace to defer the awarding of 50-year lease contracts for
three properties in Tokyo and Kobe to two contractors: Berg Corporation,
allegedly Japanese but not listed in the phone book, and the Urban
Corporation with headquarters in Hiroshima.”

The contract amount of 948 million pesos (1.8 billion yen) for the three
properties, one in Tokyo and two in Kobe, is undervalued, according a
longtime resident Filipino architect who has been involved in many major
property developments in Japan.

"Am I to believe that our government officials so naive and ignorant as
to not realize that the properties are being highly undervalued?" was
the reaction of Filipino architect, who has requested anonymity.
According to him, "based on figures released by the Japanese government,
the price of the Tokyo property alone is at least 1.84 billion yen, at a
conservative 740,000 yen per square meter, if sold outright. In a lease
agreement on property as prime as Shibuya, the rights to a 50-year lease
is easily 50%, even up to 70% of the land value. This means a lump sum
of at least 1 billion yen, in addition to the monthly rent the
Philippines should be getting, for the Shibuya property alone. With
these figures, it is easy to see that a paltry 1.8 billion yen for all
three properties makes for a VERY BAD deal for our country", the
architect explained. "Just renting the land out as a level parking lot
for the next 50 years alone will get you 1.8 billion yen!" he further
elaborated.

"We are urging Foreign undersecretary Franklin Ebdalin to stand even on
his personal capacity on his statement. This is a just cause for
Filipinos, especially those in Japan, who will be vigilant against
public officials who don't use mathematics for our country's interest,"
the Migrante Party List Japan chairman stressed.

In 1989, Filipino residents in Japan conducted street demonstrations in
Tokyo to protest the attempted sale of Philippine properties in Japan,
particularly the now famous Roppongi property. The bidding was averted
when one of the two remaining bidders failed to enclose the required
check in his bid. In 1991, the Supreme Court declared the properties as
national patrimonies that could not be disposed of without a national
referendum, as these were obtained from Japan as part of WW2
reparations.

-----------------------------
This is our cause, our fight!
Butch Talorete

The bidding of Philippine properties in Japan is indeed a very and
important issue because it reflects on how much the current and corrupt
GMA administration values the welfare of Filipinos in Japan. I think it
is about time that ALL ENLIGHTENED FILIPINOS here go ballistic over this
blatant and shameful attempt to rob US of our very own patrimony.

The problem with this government is that MASYADONG MINAMALIIT TAYONG MGA
PILIPINO DITO SA JAPAN. We go to our own embassy and we have to pass
through the back door, and then we pack ourselves into such a cramped
waiting area while the ambassador's office is 130 sq. m. And now that we
are hoping to lobby for the establishment of a Philippine Center in
Tokyo, here comes this bidding that will eventually deprive us
Japan-based Filipinos, for the next F-I-F-T-Y (50) years, the last
remaining properties that we can call our own and which are, mind you,
WAR REPARATIONS.

I wonder what's so special about Filipinos in other countries who have
their own Philippine Centers. Do they sweat more and work harder just to
send their much-valued earnings back home? Are they more beautiful or
more handsome or more intelligent or richer than Japan-based Pinoys? Are
we less Filipino than them that's why we don't have a Philippine Center
and they do? And now that we have these properties which we can possibly
turn into one, this Arroyo administration wants to take it AWAY FROM US!

Filipinos in Japan have all the reasons to bind together and fight
against this move to lease these properties for the NEXT 50 YEARS. Let's
not wait for the cue from anyone and esp. not from the Philippine
Embassy, although we are we glad that the ambassador himself is against
this. Let us always remember that embassy officials come and go, and who
knows, we will most probably have a new ambassador this year with the
change in administration.

But guess who stays and who is the only constant here in Japan? That's
YOU AND ME, the striving and sweating OFW, the loving Filipino spouse of
a Japanese, the hardworking Filipino graduate student, the talented
Filipino entertainer, the Filipino NGO or religious servant, the
ordinary Filipino on the lonely albeit brightly lit Japanese street.
Yes, that's you!

This is our cause and that of future Japan-based Filipinos.

IF WE DO NOT FIGHT FOR IT, WE WHO ARE HERE, THEN WHO DO YOU THINK WILL?
AND IF WE DON'T DO IT NOW, THEN IT WILL BE TOO LATE. And rest assured,
someone will soon be laughing on his way to the bank, AT THE EXPENSE OF
FILIPINOS IN JAPAN --- AT OUR EXPENSE!
-----------------------------

-----Original Message----- From: Butch N. Talorete Subject: IF...

If we see someone being robbed and we look away, If we see someone being
raped and we pretend not to see, If we witness a murder and we feign
ignorance, THEN we are an accessory to the crime.

Philippine properties in Japan are about to be plundered for the next 50
years, and if we pretend that it is not happening, then we are both an
accessory and a VICTIM of the crime.

The bidding approval by Malacanang will be made soon, if not next month,
and if we do not stop it now, then the next generation will ask: "What
did the Filipinos in Japan do then when they could have had the power to
stop it?"

If this bidding is approved, there is only one answer: "They just stood
back and pretended it wasn't happening. They simply didn't care."

LET US NOT BE A PARTY TO THIS CRIME.