CDC scorned for reneging on even small payments to locators, ordered by small claims court to pay up or else

Poor ethics, unprofessional business practices plague Philippines Clark Freeport Administration under CDC President CEO Benigno Ricafort who still refuses to leave that post despite the change of the country’s president.

Philippines government owned corporation Clark Development Corp continues to exhibit poor business practices and low ethical standards as businesses grow increasingly wary of investing Clark Freeport Zone.

One of the major concerns for businesses operating in the Philippines is the integrity of the contracts that they enter into with a government agency. Investors are wary of the prospect that the government corporations frequently renege on promises and show little respect for contracts and the obligations they carry for both parties.

Clark Freeport Zone just 70 minutes from Manila is administered by Clark Development Corp or CDC which is directly under the Office of the President. For years, complaints and grievances from stakeholders and would-be investors fell on deaf ears. Foreign investors feel that CDC is more interested to sign new contracts than to honor existing ones. It appears that the modus operandi of CDC has been to sign contracts to lure foreign investment into the Philippines but once the money is here, CDC would refuse to honor their obligations.

This kind of unethical business practices has been rampant in Clark. Here is a recent example that baffles the investors and brings sarcastic laughter to the bars of Angeles City and Clark Philippines.

On 26 January 2011, the Honorable Judge Ma. Magdalena A. Balderama of the Municipal Trial Court of Clarkfield Pampanga rendered a decision directing Clark Development Corporation (CDC) to pay a prominent locator – business located inside Clark Freeport Zone. (For details please refer to Small Claim Case for Collection of Sum of Money plus Damages entitled “Y-I Leisure Clark Inc. versus Clark Development Corporation” with Case No: 10-02.)

The sum of money involved was a paltry php37,500 or about US$850. The locator simply got fed up with CDC’s habitual refusal to honor its part of any bargain, decided to take CDC to court and won the case. Evidently, CDC ignored instruction from the judge to pay up the next day after the decision. An order of execution has to be issued to finally compel CDC to pay.

As it turns out, this was not any isolated incident of how CDC does business. There are many court cases filed by locators to compel CDC to honor its obligations. It appears that CDC President/CEO Benigno Ricafort habitually refuses to honor selective contracts.

This sort of behaviors from senior and top officers of a government-owned corporation is extremely rare outside of the Philippines. It has attracted the attention of fellow foreign investors and some local businessmen with a vested interest in Clark. Some appear to be quite amazed at how difficult it is to deal with Clark Development Corporation. Many wonder if this isn’t a typical example of what it is like to do business with a government-owned corporation in the Philippines.

Despite many letters of complaints, the Office of the President continues to allow the abuses and harassments of foreign investors by Clark Development Corporation to proceed unchecked. Letters of grievances were ignored and nothing is done to rectify the rampant graft and corruption despite President Aquino’s bold statement to clean up the government.