By Denise A. Valdez, Reporter

AYALA LAND, Inc. (ALI) said it is open for a probe of its contract with the University of the Philippines (UP) for the UP-Ayala Land Technohub project following allegations of underpayment by Malacañang.

In a statement late Monday, the property arm of the Ayala group said it “(welcomes) a transparent review and assessment of our partnership with UP” as it “(believes) this development has been fruitful and beneficial for UP, ALI and the community.”

Contrary to figures cited by Presidential Spokesperson Salvador S. Panelo that ALI is paying less than P20 per square meter (sq. m.) for its 25-year contract with UP, the company said UP will be getting P171 per sq. m. per month for the partnership.

The value comes from ALI’s P4.23-billion lease payment covering 25 years — P1.1 billion from 2008-2018 and P3.13 billion from 2019-2033 — and the P6 billion construction cost for the 16 commercial buildings within the complex. This is equivalent to a total of P10.23 billion payment from ALI to UP for the partnership.

Divided by the 20 hectares (200,000 sq. m.) that ALI said is “developable” within the 37-hectare Quezon City property where Technohub stands, and the 25 years (300 months) covered by the contract, the total payment is P171 per sq. m. per month.

“After 2033, UP as owner, will receive 100% of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership,” ALI said.

“Over the 25-year term of the lease, UP will receive the following: 1) lease payments and 2) buildings. This totals P171/sqm/month,” it added.

Despite the clarification, shares in ALI and its parent Ayala Corp. (AC) at the stock exchange continued slumping on Tuesday. Shares in ALI lost one centavo or 2.47% to close at P39.50 each, while shares in AC gave up 35 centavos or 4.67% to P715 each.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said investors are worried other contracts between Ayala-led firms and the government will also be scrutinized. “If any more are found to be ‘onerous’, the company’s income could be threatened,” he said in a text message Tuesday.

AC’s water arm Manila Water Co., Inc. is also alleged by the government of having an onerous contract. A new contract is currently being drafted by the government.

“How long this will last is anybody’s guess at this point, unfortunately. You can bet though that all the business groups that have government contracts are now reviewing these carefully,” Mr. Lisbona added.

But for Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan, since much of the decline is brought by negative sentiment, he believes its impact on AC and ALI shares are short-lived.

“I think that would be temporary. Kasi kung makikita mo, Technohub, isa lang naman yan sa maraming projects ng Ayala Land [I think that would be temporary. Technohub is just one of the many projects of ALI],” he said in a phone call Tuesday.

Kung magkaroon man ng clarity on a compromise parang sa water… yun yung underlying catalyst for Ayala Land [If there will be clarity on a compromise like what was done for water concessionaires… that is an underlying catalyst for ALI],” he added.

Meanwhile, Presidential Legal Adviser Salvador S. Panelo said he would recommend the investigation of the contract between UP and ALI, adding that the deal is “onerous.”

In a television interview, he said he would be making the recommendation to President Rodrigo R. Duterte after ALI disclosed on Monday that UP will be receiving P10.23 billion by 2033 or 25 years after the company leased the property in 2008.

“I will recommend to the President pag-aralan natin ito mukhang kawawa na naman ang gobyerno dito (We need to study this because it appears that the goverment is again the aggrieved party in this),” he said.

“For 25 years I think they will be getting about P48 billion, while UP will be getting (P10.23 billion) according to them and you must remember that 25 years in a building, I think that should be demolished already. By that time, it is not that worth[y]. It is not that valued anymore,” Mr. Panelo said.

“Definitely lugi ang gobyerno dito (The government is on the losing end here),” he added. — with Gillian M. Cortez