MANILA, Philippines - The government, through the Bureau of Customs (BOC), has settled its obligations to Swiss inspection firm Societe General de Surveillance (SGS) amounting to P3.2 billion, completing the compromise amount of P6.2 billion, the Department of Finance (DOF) reported yesterday.
The P3.2 billion, taken from the BOC’s 2009 budget, represents the second and final installment of the government with SGS.
The BOC has already settled P3 billion to SGS in 2008 for its unpaid obligations.
The government agreed to pay SGS P6.2 billion as a compromise amount after it did not renew its contract with the Swiss inspection firm in 2002. SGS said the government ended its contract without settlings its arrears of 202.4 million Swiss francs plus accrued interests and receivables.
SGS filed an arbitration in the International Centre for Settlement of Investment Disputes wherein the Swiss firm got a favorable decision and the government was ordered to pay its obligations.
The second and last payment of P3.2 billion was reflected in the BOC’s proposed budget for 2010, which showed a decrease of 58 percent to P1.910 billion from P4.590 billion in 2009.
BOC Commissioner Napoleon Morales, said the P6.2-billion payment to SGS was reasonable since the actual amount initially being asked by the Swiss cargo inspection firm was P8 billion. “We were able to get a discount,” he said.