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SBMA exec optimistic more court victories after winning in Philip Morris case

SUBIC BAY FREEPORT—Still facing an array of court cases meant to stop the implementation of charges for municipal services given to businesses and residents here, the Subic Bay Metropolitan Authority (SBMA) is nevertheless optimistic it will see these legal impediments fall one by one following a favorable decision from the High Tribunal recently.

SBMA Senior Deputy Administrator for Support Services Ramon O. Agregado said the SBMA is expecting more court victory on the issue of the Common Use Service Area (CUSA) fee. The Cusa fee was opposed by some businessmen and residents here since it was imposed nine years ago.

“We’re very happy that ultimately the Supreme Court [SC] decided in SBMA’s favor and sustained the validity of the Cusa fee,” Agregado, who heads the agency’s legal team, said.

“Once the SC’s decision becomes final, we will invoke [that] decision in all of the other cases involving other locators who filed cases against the CUSA fee,” he added.

The landmark decision SBMA is counting on had dismissed the petition filed by Philip Morris Philippines Manufacturing Inc. in 2013 to stop the imposition of CUSA.

The tobacco giant is a registered business locator here and operates a P1-billion tobacco leaf regional warehouse here, which handles imported tobacco leaves from foreign suppliers for eventual shipment and processing in cigarette manufacturing plants in the Philippines, Malaysia and Indonesia.

When the SBMA imposed the CUSA fee in October 2012 to defray the cost of municipal services like law enforcement, fire-fighting, street lighting, and street cleaning, Philip Morris sued claiming among others that the fee was in fact a property tax.

The SC’s First Division, however, recently issued a 19-page resolution denying the Philip Morris petition to seek the reversal of the decision issued by the Court of Appeals (CA), which affirmed the December 2, 2015. ruling of the Regional Trial Court (RTC) of Olongapo City dismissing the firm’s plea to stop the CUSA.

In upholding the CA, the SC affirmed the constitutionality of the imposition of CUSA fee by the SBMA, adding that Republic Act 7227, which created the SBMA, “granted it authority to impose reasonable fees and charges for the provision of the municipal services covered by the CUSA Fee.”

Agregado said the SBMA is now waiting for the SC to affirm its decision and make it final and executory.

“Procedurally, Philip Morris can still file a motion for reconsideration. But we feel very confident that, ultimately, the Supreme Court will affirm its decision, which was very comprehensive,” Agregado said.

The decision, he added, “covered all of the issues raised by Philip Morris.” Agregado said that aside from the Philip Morris’s complaint, the SBMA still faces “about 11 to 12 cases filed by other locators against the CUSA fee.” Some of these, he said, have already passed the RTC and are already in the CA.

He recalled that the SBMA had shouldered expenses for municipal services, except garbage collection, ever since 1992 “until it came to a point that the expenses were already so heavy and so significant that they were draining SBMA’s resources.”

When the CUSA was imposed in 2012, and some business locators and residents objected and filed court cases, the SBMA continued to provide these services just the same, Agregado explained.

“Once the SC affirms with finality the SBMA’s right to impose CUSA fee, we will have to collect arrears from those who have not paid CUSA,” he added.

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