Philippines says Chevron unit underpaid rent for oil terminal lot

MANILA, Jan 21 (Reuters) - The Philippines said on Tuesday a
lease contract between a unit of Chevron Corp CVX.N and a
state-run firm was "grossly disadvantageous" to the government,
after a review showed the energy company had been paying a
"minuscule" rent.
President Rodrigo Duterte ordered a review of all government
contracts last year, in a bid to ensure such deals with firms
and other countries were fair and favourable to the public.
Finance Secretary Carlos Dominguez said Chevron Philippines
Inc had been paying the state-run firm only a fraction of the
fair market rent for an industrial lot hosting the energy
company's oil import terminal.
The lease deal is "another government contract with onerous
provisions," Dominguez said in a statement.
He added that the government's determination came after it
compared the lease terms with fair market value of the
industrial lot in Batangas, south of the capital, Manila.
Government figures showed that since 2010, Chevron
Philippines has been paying only 4% of an annual rent that would
amount to 257.76 million pesos ($5 million) if it were based on
fair market prices.
"We have to implement a totally transparent method of
getting the best deal for the rental of all government
property," Dominguez added, but stopped short of saying what
action the government would take to recover lost revenue.
Chevron Philippines, which has nearly 700 service stations
in the country, did not immediately comment.
Among the contracts reviewed after Duterte's order were
concession deals signed with the Philippines' two largest firms,
which the president later called "onerous and disadvantageous"
for ratepayers.
Duterte has threatened to take over the capital's water
distribution services if the firms Maynilad and Manila Water
refuse to accept the terms of new contracts to be offered to
them. He also warned of scrutiny for a railway operations deal
signed in 2014 under the previous president.