ANNOUNCEMENT MEMORANDUM

Republic of the Philippines
OFFICE OF THE MAYOR
City Of Manila

Press Statement

There is every legal ground why City Hall took over the 22,000 square meter Vitas slaughterhouse from Dealco Farms Inc., which we leased out to the company in October, 1999 for a period of 25 years.

Our contract with Dealco gave it "the right to rehabilitate, modernize, and operate," none of which lived up to as these require massive investments that Dealco did not want to spend in. All it did was rake in profits from the use of facilities, regardless of the consequent sorry state that the facilities eventually got into.

Dealco, in its lease contract with City Hall, committed to undertake rehabilitation and modernization of said abattoir which it did not do. Instead, Dealco allowed the facilities to deteriorate to make it appear that it had been losing money from running the slaughterhouse these past eight years. If it had been bleeding from its operations, why did it not back out and ask City Hall to terminate the contract?

To bolster its claim that it had been losing, Dealco subleased the facilities to Meatworld International, Inc., which board includes councilor  Dennis Alcoreza, without prior notice and clearance from City Hall, as Dealco committed in its contract with us.

Dealco under-reported its income vis a vis its payment of 1 percent city share from the facility. But when it subleased the facility to Meatworld, the latter reported to the Securities and Exchange Commission gross sales of P1.158 billion in 2006 and almost P1.312 billion in 2007.

Dealco allowed Meatworld --again without prior notice to City Hall -- to put up a sports and recreation center on the second floor of the building as borne by the June 23, 2008 letter of the Bureau of Permits, in utter violation of the contract.

Previous inspections by the City Veterinary Inspection Board and later by the National Meat Inspection Commission (NMIC) -- the regulator of abattoirs and animal holding centers int he country-- showed the facility in the most repugnant state of degradation and lacking in sanitation and hygiene with the stench of animal manure scattered all over the place, flies swarming inside and outside the slaughterhouse thereby endangering the health of surrounding communities.

Dealco also did not use and upgrade the wastewater facility that City Hall put in place in the slaughterhouse, opting instead for the easier way of dumping the wastewater into the Manila Bay, thereby aggravating the ecological risks to marine life in the area and ultimately threatening to pollute the waterways of the community.

On January 28, 2008, NMIC OIC Atty. Jane C, Bacayo, (a veterinary doctor and masters in public administration) issued a "close out audit" report at Dealco Farms which showed "serious non conformances to GMP/SSOP (good manufacturing processes, sanitation and safety operating procedures) guidelines that should be rectified with 24 hours to 7 days because of food safety concerns." She stressed that this was the second audit with identified serious findings and recommended the downgrading of the facilities. Clearly, both Dealco and its sub-lessee, Meatworld, are guilty of negligence and abandon of public health and safety and utter violation of the contract with the City of Manila.

On June 23, 2008 Bureau of Permits Director Nelson Alivio wrote about the inspection undertaken jointly by the Department of Science and Technology, the City Legal Office and the Manila Health Department which showed :

1. The slaughterhouse is being occupied by 2 companies, Dealco and Meatworld.

2. Dealco, which entered into a contract with the City Hall, operates the slaughter house at night.

3. Dealco has a small office at the ground floor ear the solid waste water treatment station but is closed during the day.

4. Dealco is provided with a Mayor's Permit to operate of the business to manufacture of processed food products, dealer of meat , wholesale of livestock and delivery vehicle.

5. It operated the said slaughterhouse without necessary Mayor's Permit and Business License, Adjustment of garbage fees from P468.75 to P1.875 quarterly plus 25% for multiple business 

6. Meatworld occupied the second floor and engaged in buying livestock and have it slaughtered by Dealco. It has a Mayor's Permit to Operate the business of retail of meat, importer of meat products and wholesale of meat, Its 45 people has no occupation permit, health and physical certificate.

7.Meatworld also operated a sports and recreation center for members only without Mayor's permit and adjustment of garbage fee from P150 to P1.275 per quarter plus 25% for multi business for the past three years.

THE CONTRACT AND ITS AMENDMENT 

The contract between the City Hall and Dealco was executed pursuant to the City Council Resolution No. 87 of Nov. 5 1998, which required the City Hall to submit it for the council's concurrences. The City ratified said contract on March 14, 2000subject to addendum/amendments like:

1. Dealco shall undertake rehabilitation and modernization at the VIB abattoir within 48 months from receipt of notice to proceed provided that within 90 days from the ratification of contract lessee (Dealco) shall submit to the City Hall the master plan for the project and within a month of the approval of the said plan, Dealco shall commence the rehabilitation and modernization and within 18 months, lessee shall have accomplished not less than P30.951 million of rehabilitation and modernization, P5 million of which shall be devoted for the improvement of the facilities by the VIB such as Laboratory equipment and vehicles.

2. As consideration of the lease, Dealco shall pay City Hall a fixed monthly rental of P300,000.00 payable on the 30th of each month to commence on the date of the actual operation subject to readjustment at the rate of 5% thereafter starting on the 6th year until the 25th year.

3. Dealco may with the consent of the lessor, sublease any part of the leased premises subject to the same terms and conditions of the contract.

MEATWORLD EXAMINED 

An independent audit report of Meatworld International Inc. by Butcon & Associate, CPA's on the balance sheets as of Dec 31, 2007 and 2006 showed that from gross sales of P1,311,318,062 in 2007 the company earned a net income of P10.56 million. for 2006 it had the total sales of P 1,158,069,470and a net income of P4.03 million.

It was incorporated on October 3,1996 (with SEC registration No. D1996-00472).It's Board of Directors includes: Francisco J. Buencamino with 18% of the P3 million in subscribed and paid up capital; Maria Cecilia Pangilinan, corporate secretary with 27% (P4.5 million); Julieta Espinosa Dominador Batac, treasurer with 13% (P2.193 million); Dennis B. Alcoreza President with !% (P243,750) and Jacinto Sta. Ana with% (P4.5 million).

A Major item in its assets is inventories which in 2007 was the P20,712,773 versus P18,662,698. This comprised of Imported primal cuts (P6.57 million worth in 2007 and P3.592 million in 2006; finished goods ; trading live cattle and carabaos; cut-up cattle hogs and carabaos and others.

CITY TREASURER'S REPORT 

City Treasurer Erlinda O. Marteja Issued Letter of Authority for Reynaldo Sabido (supervisor) and Oscar John Sangalang to examine the books of accounts and other pertinent records of Dealco to "verify, assess and collect the true amount of tax or taxes, fees and charges due from Dealco for the unexamined years to Dec 31,2007". 

The duo reported that Dealco had gross incomes of P8.22 million in 2002; P12.04 million in 2003:P13.315 ,million in 2004; P 16.603  million in 2006 and P19.224 million in 2007 the 1% city share from such incomes should have amounted to P845,986.77 from 2002 to 2007

As per audited financial statement, Dealco was found to have earned a gross income of P1.087 billion in 2002;P1.293 billion in 2003: P1.045 billion in 2004 and P885.93 million in 2005: P 121.466 million in 2006 and P 184,106 million in 2007. The City's 1%  share from the gross incomes should have been P46,153 million.

Marteja later issued to Dealco a Letter of Assessment ( dated May 22,2008 )asking Dealco to pay P 4.640,169.25 representing adjustment on business tax including surcharge and interest for the taxable year ending in 2008.

AN APPEAL FOR FAIRNESS 

Going by the facts of the case, The City Of Manila did not go overboard to conducting the takeover of the Vitas Facilities and imposing its new management.

If the City is being portrayed as arrogant and fascistic by the Alcorezas, even dragging The City Council into this foray, we must remind everyone that NO ONE IS ABOVE THE LAW, NOT EVEN LAW MAKERS.

This is actually the third and final attempt to take over and save the abattoir from the continued decline and degradation, owing to mismanagement by a few vested interest groups, and City Hall is only doing so in the name of protecting public health and safety and to promote only what is just and fair to everyone, not just to a few.

The Alcorezas have earned from the slaughterhouse far too much already, But it has not given back what it committed to do, to the facility and modernization it deserved and to the public taxes due to the city government, which needs to plow back to the people in terms of public services.

That we are being projected as "Inhuman by bodily carrying Alcoreza and his sympathizers like a pig " out of the premises is just unfortunate but public service is not a matter of popularity but a matter of spreading law and order at all times. on hind thought they challenged the police to do so, which they did.

This Case, though a big emotional and publicity backlash to the City's leadership, will not deter us from doing what is right and fair for the majority even if we continue to reap public ridicule for it.

Again, NO ONE IS ABOVE THE LAW, NOT EVEN LAW MAKERS.