ECC ordered to rent out huge office space in its building now occupied for free by employers group

Published July 17, 2020, 8:13 PM

by Ben Rosario

For about 24 years now, the Employers’ Confederation of the Philippines, the country’s biggest organization of employers, has occupied free of any rental charge half of the whole floor of a building owned by government.

The Commission on Audit demanded an end to this deal as it ordered the Employees Compensation Commission (ECC), the building owner, to start to offer the space to tenants who will pay for rent for the huge space now occupied by the employers group. 

In a recently-released 2019 annual audit report for ECC, COA reminded the ECC that it should comply with Presidential Decree No. 1445 stating that government funds or property should be spent or used solely for public purposes.

“Occupancy for free of half of the floor of ECC building by the Employers” Confederation of the Philippines (ECOP), a private organization, since 1996, resulted in lost opportunity for ECC to earn income from rent,” the COA said.

ECOP started benefiting from the free office space when the ECC Board passed Resolution 96-06-0291 in 1996.

The resolution granted the employers’ group ‘free use of office space” covering half of the whole third floor of the ECC building located at 355 GilPuyat Avenue, Makati City.

The resolution was approved reportedly upon the order of then President Fidel V Ramos.

In granting the free use of office space, the 1996 ECC board also noted that ECOP “is one of the biggest employer organizations in the country and a program partner of the ECC in the implementation of the Employees Compensation Program.”

But while ECOP did not pay any rent, several government offices located in the ECC building are made to pay for the use of spaces they occupy, the report said.

“It is worth mentioning that government agencies such as the Social Security System and the DOLE-NCR, among others, are tenants of the ECC who are dutifully paying monthly rental fees,” COA stressed.

The audit agency added: “Consequently, ECC has lost the opportunity to earn income from rent.”

The audit agency called for strict compliance to PD 1445, saying that ECC must “terminate the agreement” with ECOP.

Auditors also recommended that the space occupied by ECOP be offered to other tenants after conducting a public bidding.