FILE PHOTO: Philippine President Rodrigo Duterte delivers his State of the Nation address at the House of Representatives in Quezon city, Metro Manila, Philippines July 23, 2018. /Czar Dancel

MANILA (Reuters) - Philippines President Rodrigo Duterte will cancel Landing International Development Ltd’s $1.5 billion integrated casino project in the capital, his spokesman said minutes after the Hong Kong-listed firm broke ground on Tuesday.

Presidential spokesman Harry Roque said the lease contract that Landing signed with a state-owned foundation in March has significantly put the government at a disadvantage because the rental payment was “unconscionable”.

“Sorry to burst your bubble, people, but the president said that is grossly disadvantageous to the government,” Roque told a media briefing, a few minutes after Landing broke ground for the fifth casino project at the 100-hectare Entertainment City strip located south of the capital Manila.

This is the second casino project under fire from Duterte’s government. In April, it shelved a plan by Macau’s Galaxy Entertainment Group to build a $500 million integrated casino-resort on the holiday island of Boracay, just a month after the gaming regulator approved the project. The government cited environmental concerns for the move.

The Philippine Amusement and Gaming Corp, a government-owned and controlled firm under the Office of the President, granted Landing the license in July to build the casino.

The integrated resort project is “still pushing through and its lease contract with Nayong Pilipino Foundation is still valid and effective,” Landing said in a statement.

“Unless the lease contract is canceled or nullified on solid legal grounds by the courts, Landing has reason to believe that it is a valid leaseholder and can legally proceed with its project,” it added.

The project, which will include hotels, a convention center, water parks and gambling areas composed of 155 tables and 239 slot machines and electronic table games, was slated to start commercial operations in 2022.

Landing’s shares closed up 3.6 percent on Tuesday, outpacing the broader index that rose 1.5 percent.