POSTSCRIPT / June 3, 2007 / Sunday


Philippine STAR Columnist

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Dominicans in trouble over new UST hospital

STORM BLOWING: A legal typhoon continues to batter the pontifical University of Santo Tomas, the howler’s tailwinds threatening to shake the rafters of the Dominican Order in Rome, if not the Vatican itself.

The collateral damage could affect three big banks that had contributed to a syndicated P3-billion loan to build a new 19-storey medical care complex on the España campus. The loan was granted the UST Hospital Inc. despite its having no substantial assets.

The old hospital is being torn down to clear the site for the proposed USTHI medical center, but work stopped when the release of the loan was suspended as a result of the controversy.

Complicating matters, the bulk of the 450 or so medical consultants (specialists) of the hospital have been terminated summarily. An ongoing selective recruitment to replace them is being questioned.

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HOSPITAL PLAN: The eye of the storm started to form in 2005 when the USTHI was organized and registered apart and independently of the UST, which is another corporation registered by the Dominican Order in 1908.

The USTHI was incorporated by nine Dominican priests, two doctors and a lawyer. Each of the priests, except one, paid-up P100,000 for his shares. When the project was criticized, two of the priests on the board were removed.

Nowhere in the incorporation papers is it said that the new USTHI is for religious or educational purposes like the original non-stock, non-profit UST corporation. The avowed objective of the USTHI is service.

The plot deepened when some assets and equipment of the old UST hospital were transferred or leased to the USTHI apparently in preparation for the latter to take over operations.

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WHO’S OWNER?: As it has been established that the UST and the USTHI are two distinct and separate juridical entities, several questions were raised by some priests and other affected stakeholders.

The paid-up contribution of the priests is presumed to have come from their personal funds, not from either UST or the Dominican Order. How can this be when they were supposed to be penniless, having been bound by a vow of poverty?

Will the USTHI, assuming it will be able to operate, be extended the same tax exemption being enjoyed by the UST under the law?

What is the legal basis of the transfer to the USTHI of assets and equipment of the old UST Hospital and the Faculty of Medicine? Also, may donations of medical alumni, which are substantial, be transferred to the USTHI without the donors’ consent?

Since the priest-incorporators are members of the UST/Dominican Order and at the same time of the USTHI, will the asset transfer make them both donors and donees? Is this not conflict of interest?

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DONATED SITE: Will the lease to the USTHI of six hectares — for profitable services outside UST operations — violate the deed wherein Francesca Bustamante Bayot, the original owner, donated 22 hectares of her 200-hectare Sulucan subdivision to the Dominicans?

The 396-year-old university originally occupied a cramped area in Intramuros, Manila, until it moved in 1927 to the capacious España campus.

The deed of donation restricts the use of the land exclusively for educational, religious and charitable purposes. (The same non-profit activities, incidentally, are the bases for UST being tax-exempt.)

If there is a violation of the condition, it could result in the entire UST campus reverting to the estate of the donor as stipulated in the deed of donation.

(At the current P250,000/sqm commercial valuation of the UST campus, its 220,000-sqm area can fetch a price of P55 TRILLION! That is just the land. All improvements on it, such as the buildings, will also go to the original owner.)

Meantime, can the hounds of the Bureau of Internal Revenue be far behind?

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NO ASSETS: What happens to the banks that had lent P3 billion to the USTHI whose paid-up capital is only P1.2 million? Their top executives may have to explain to their stockholders or to the Ombudsman if charges are filed.

Those who contributed to the 10-year syndicated term loan were the Development Bank of the Philippines, P1.5 billion; Land Bank of the Philippines, P1 billion; Philtrust Bank, P300 million; and DBP Trust Services, P200 million.

The loan will finance the construction and the acquisition of equipment for an integrated medical care complex, including a new 19-storey medical arts building and a seven-storey hospital services podium.

Since the borrower (USTHI) has no valuable assets to its name except the used equipment transferred to it by UST, bank officials may have to explain why they approved such an exposure.

If the UST, an entirely separate entity, guaranteed the loan, in what form was the guarantee that was satisfactory to the banks? What agreement exists between UST and the USTHI governing any such guarantee?

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GO, RUFUS!: I agree with the suggestion of Senate Minority Leader Aquilino “Nene” Pimentel that congressman-elect Rufus Rodriguez of Cagayan de Oro be nominated by the House minority as its challenger to Speaker Jose de Venecia Jr. when the 14th Congress opens in July.

Should Rodriguez lose because he does not have the numbers, he can then claim the post of House minority leader, Pimentel said.

Given a chance, Rufus has the qualities to be a great leader not only for Mindanao but also for the Philippines. He has served with distinction as dean of the college of law of San Sebastian University and immigration commissioner under the Estrada administration.

May ulo na, may puso pa!

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(First published in the Philippine STAR of June 3, 2007)

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