IBC-13 airs side on joint venture

The Philippine Star 9 Jun 2016

Dear Editor,

This is in reference to an item in the June 3, 2016 column of Victor C. Agustin, titled “IBC-13 building fund waylaid,” which appeared on page B-5 of The Philippine STAR. Please allow us to inform the public of the recent and relevant developments pertaining to the joint venture agreement (JVA) between Intercontinental Broadcasting Corp. (IBC-13) and R-II Builders, as follows:

Firstly, the Office of the Ombudsman in its April 10, 2015 final resolution resolved among others, that the JVA was proved to be advantageous to the government with its intention of alleviating the financial distress of IBC-13 employees and that the JVA between IBC-13 and R-II is presumed valid.

Subsequently, the parties took positive efforts to amend the JVA in view of the difficulty of R-II to earlier implement its terms and conditions while the above-mentioned case was still pending before the Office of the Ombudsman. Also in the meantime, the active participation of the PCGG, the OGCC and the Office of the President in the privatization efforts of IBC-13 eventually led to the final approval of President Benigno C. Aquino III to proceed with privatization of IBC13 last December 2015. Part and parcel of the privatization efforts were the discussion on the present JVA with R-II and on how to best proceed with the JVA given the surrounding circumstances.

Finally, the parties agreed to amend the JVA where part of the proposed amendment refers to the revised payment schedule of the all revenues owing to IBC-13, integrating therein the four hundred fifty million pesos (P450,000,000) worth of development now scheduled to be paid in cash. This amendment does not materially affect the substance of the competitive selection, as IBC-13’s guaranteed share in revenues still total seven hundred twenty eight million pesos ( P728,000,000), as originally stipulated in the JV agreement.

The Office of the Government Corporate Counsel in its 12 May 2016 Counsel’s Opinion has upheld the validity of the Amended JVA and held that the proposed amendment to the JVA is not only in keeping with the present privatization efforts for IBC-13 but also helps sustain IBC-13 amidst its present financial difficulties.

The present IBC-13 management has taken definitive actions to settle all outstanding obligations with its creditors including mandatory contributions of its employees to the Social Security System, Philippine Health Corp. and Bureau of Internal Revenue.

The IBC-13 management is also preparing its response to the observations of the Commission on Audit (COA) on the network’s operations. Not having its own budget from the National Government it has to generate its own sources of revenues for its business upkeep. For the past six years, we have been judicious in the management of our operating funds and have always complied with COA auditing rules and regulations.

We hope you can provide us an opportunity to air our side on the issue in the spirit of fair and balanced commentary in order that the “Truth shall prevail.”

Thank you and best regards. Truly yours, (Sgd.) LITO O. CRUZ President and CEO