Question & AnswerQ&A (LETTER OF INSTRUCTIONS NO. 276)
NDC is directed to execute a deed of donation with Caltex where Caltex donates its private lands at fair market value, and to enter into a simultaneous stock exchange with Caltex for control over Batangas Land Company (BLC).
The fair market value is to be evidenced by the amount established in 1974 as a basis for real estate tax payment.
The authorized capital stock of BLC must be increased to approximately P35 million; NDC acquires at least 60% of the stock and conveys land acquired under PD No. 680 and Caltex donation; Caltex acquires the remaining stock and conveys land of equal value appraised at fair market value.
BLC shall be 60% owned and controlled by NDC, with at least three members of BLC's Board of Directors coming from NDC's Board of Directors.
The lease term is 25 years, renewable for another 25 years; rent not less than 1.5% of donated value for the first 25 years; annual rental for 50 years not less than 2.5% of donated value, including real estate taxes which Caltex continues to bear.
Revaluation of lands shall be made prior to renewal of the first 25-year period; annual rentals shall be paid based on any higher revaluation not exceeding 25% above the original valuation.
Caltex retains ownership of all improvements on the lands after the fifty-year lease period, provided this ownership does not conflict with existing pertinent law.
It relates to the termination of the Laurel-Langley Agreement and Presidential Decree No. 680 regarding land dispositions.
The rental rates ensure that the National Development Company receives fair compensation tied to the fair market value of the lands, as well as real estate tax obligations continuing to be borne by Caltex, securing government interest in the properties.