Malacañang is finalizing an executive order (EO) authorizing the Development Bank of the Philippines (DBP) to enter into a lease purchase agreement with the Department of Foreign Affairs (DFA) for the acquisition of real estate properties abroad as sites for Philippine embassies and consulates, a move that would save on rental cost going forward.

“This is part of the ongoing program of the DFA under Sec. Alberto Romulo to acquire chanceries and ambassador residences and upgrade existing ones,” DFA spokesman J. Eduardo Malaya told the Manila Bulletin.

DBP President Reynaldo G. David, in a separate interview, disclosed that the Palace is in the final stage of drawing the EO that “will authorize” the bank to “undertake the acquisition of the residences of the ambassadors and chanceries” for and on behalf of DFA.

This transaction known as lease purchase agreement is allowed under the build-operate-transfer (BOT) law as amended.

Under this scheme, DBP will be financing the purchase and the construction of the embassies, consulates and chanceries for DFA. The lease agreement will be for 15 years after which DFA will have the option to purchase the asset.

David explained this arrangement is cost-effective, moving forward, considering that of using its (DFA’s) budgetary funds for rental, it will, instead, be used for monthly amortization.

It, too, is in consideration that rental cost continues to escalate on an annual basis.

“Instead of renting, the DFA will be owner of the property,” said David.

It is the same process that DFA undertook for its new Office of Consular Affairs building in ASEANA Business Park in Parañaque City. DBP financed the construction of the four-storey building worth P450 million.

According to Malaya, some Philippine embassies and consular offices abroad are still renting spaces in a bid to assist overseas Filipino workers (OFWs) and Filipino migrants.

“We rent a majority of our embassy premises. For instance, in Europe, we own the embassy premises only in Madrid, Spain; Paris, France; Rome, Italy; London, United Kingdom; and Bucharest, Romania. The DFA rents the rest,” Malaya earlier disclosed.

The embassy in Brussels, Belgium had also been renovated.

He added that “those in Jakarta, Indonesia; Singapore; and Wellington, New Zealand are expected to start shortly.”

“Three foreigners out of 10 often have their first interactions with our country and people through our embassies. It is best to have the most presentable embassies and consulates our country can afford. Our embassies and consulates are windows of our world, as well as the world’s windows to our country,” Malaya said.

Currently, the DFA is having the permanent Philippine Embassy in Brunei Darussalam constructed, estimated at $2.5 million.

Malaya said Phase 1 involves construction of the new chancery building, which will take about a year while Phase 2 will involve the establishment of a multi-purpose building and parking area.

The new Embassy, which will service some 22,000 Filipinos in the oil-rich nation, will be located at the Diplomatic Enclave in Jalan Kebangsaan.