Philippines to review Landing's casino lease after Duterte orders halt

Shin Hwa World

10/08/2018 09:00

By Neil Jerome Morales
    MANILA, Aug 10 (Reuters) - The Philippine justice minister
has ordered a review of a lease agreement for a $1.5 billion
casino project by Landing International Development  0582.HK 
after President Rodrigo Duterte abruptly halted it, saying it
was unfavourable to the government.
    Just as Hong Kong's Landing broke ground on Tuesday on the
integrated casino-resort at Manila's Entertainment City, Duterte
sacked the board of the Nayong Pilipino Foundation which
administers the land and who had agreed the terms of Landing's
lease, which tied the government to a lengthy contract that
collected rent at far below market value.  urn:newsml:reuters.com:*:nL4N1UY2QA
    Justice Secretary Menardo Guevarra said the deal between
state-owned Nayong Pilipino and Landing would be investigated,
but stressed that it did not mean the project was dead.
    "The removal of all the members of the Nayong Pilipino
board, by itself alone, does not affect the implementation of
the project," he told reporters on Thursday.
    However, he said it could be affected by the re-evaluation
of the deal and the appointment of a new Nayong Pilipino board. 
    Landing said on Tuesday the casino would go ahead and its
lease contract remained valid, unless nullified by a court. 
Landing said on Friday that it had no further comment.   
    The review is the latest setback for a gaming sector whose
fast growth has until recently been warmly welcomed by the
Philippines. It now finds itself increasingly at the mercy of a
powerful president who dislikes gambling, even though it
attracts tourists, creates jobs and brings in revenue. 
    Earlier this year Duterte halted the licensing of new
integrated resorts to prevent overcrowding. On Wednesday he
reiterated that he hated gambling and would not allow new
casinos to set up beyond those already approved.  urn:newsml:reuters.com:*:nL4N1UZ3VX
    The national gaming regulator said on Friday it would stick
by industry policies on licensing and leases but would respect
any order issued by the president.
    A distant relative of the president who was a member of the
Nayong Pilipino board Duterte sacked identified herself on
Friday as the whistle-blower who reported the irregularities
with the lease, which she said would see rent collected at more
than two-thirds below the market value.
    "There was no bidding, it did not undergo proper process.
They (board members) did not publicise or put it to challenge of
other investors for comparison," Maria Fema Duterte, who married
into the Duterte family, told news channel ANC. 
    Former Nayong Pilipino officials could not be for comment.
Former chairman Patricia Ocampo said on Tuesday said the
contract was "above-board" and "highly advantageous to the
government and to the Filipino people".

 (Editing by Martin Petty and Eric Meijer)
 ((neiljerome.morales@thomsonreuters.com; +632 8418914; Reuters
Messaging: neiljerome.morales.thomsonreuters.com@reuters.net))