Bureau of Local Government Finance Opinion

March 5, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the Provincial Treasurer, Calapan, Oriental Mindoro, her herein letter dated December 12, 1997, relative to the request of Mr. Buenaventura Tan, Vice President and General Manager of Filipinas Mills, Inc. (FMI), regarding the tax liabilities of the real properties owned by the corporation located in the municipality of Socorro, that province. It appears that real property tax delinquencies covering the period 1988-1997 in the total amount of P60,074.75 have been assessed against FMI, as stated in the subject letter of that Office. Under the 1st Indorsement dated November 20, 1997 of this Bureau, it was mentioned that said properties were mortgaged to the Development Bank of the Philippines (DBP) and were foreclosed due to failure to pay the loan on the stipulated date. The same were later transferred to the Asset Privatization Trust, (APT). However, on October 29, 1997, the same properties were redeemed by the owner after complying with the requirements of the Committee on Privatization under the provisions of RA 7661. In this connection, it is informed in her letter dated December 22, 1997, copy enclosed, that the Municipal Treasurer of Alicia, Isabela, expressed the view that the properties of FMI located in said municipality are exempt from real property taxes for the years 1987 to 1997 in accordance with the Trust Agreement between the DBP and the APT. This is also reflected in the Certification dated January 16, 1998 of the Provincial Treasurer of Nueva Ecija, copy also enclosed. ECcaDT In the light of the foregoing, this Bureau supports the opinion expressed by the Municipal Treasurer of Alicia and the aforementioned Certification of the Provincial Treasurer of Nueva Ecija that the assets of Filipinas Mills Inc. (FMI) located in Bongabon, Nueva Ecija, are exempted from the payment of taxes for the period from CY 1987 to CY 1997. Inasmuch as the properties of FMI in that province are similarly situated with the aforesaid properties of said firm located in Isabela, Nueva Ecija and other places specifically enumerated in the 15th (whereas) of the attached Deed of Reconveyance, dated October 29, 1997. It follows that taxes on all properties of FMI covered in the Trust Agreement of the DBP and the APT shall become due and payable only on the following year, which is the current year, 1998. Be guided accordingly. (SGD.) LORINDA M. CARLOS Executive Director