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Sale of FTI, PNOC unit set


[ manilastandardtoday.com ] June 18, 2009

By Eileen A. Mencias

THE government is keeping its privatization target of P30 billion this year although the Finance Department is concerned that market conditions may affect the sale of its two major offerings.

“It’s not easy to sell our two major items,” said Finance Secretary Margarito Teves, referring to the government’s 40-percent stake in the PNOC Exploration Corp. and a 103-hectare portion of the Food Terminal Inc. property in Taguig City.

“It’s really the overall condition that’s preventing us from accelerating the sale of our other assets,” Teves said, adding that the government hoped to sell both assets by Sept. 30. He said the government was also looking at the possibility of extracting more dividends from PNOC Exploration if the market became too soft for a successful sale.

“We’re still looking at it in terms of market conditions... This is something we need to review on a week-to-week basis,” he said.

The government hopes to raise at least P11 billion from its PNOC Exploration shares and P10 billion from the FTI property.

Teves said the government had other assets, like the New Bilibid Prison in Muntinlupa City, that it could sell to meet the P30-billion target, but these would have to go go through the usual approval process and follow bidding procedures.

Finance Undersecretary Crisanta Legaspi earlier said the Privatization Management Office would issue in July the terms of reference for the auction of the FTI property.

Of the 103 hectares up for sale, 79 hectares are ready for development while 24 hectares are covered by long-term leases from the Philippine Economic Zone Authority. Legaspi said the process would involve a block sale to give the developer flexibility in the property.

The remaining 17 hectares is not covered by privatization and are owned by the National Food Authority.

The Government Service Insurance System had earlier expressed interest in the property, with GSIS president and general manager Winston Garcia saying the pension fund was willing to pay P7 billion.

Teves, however, said the Cabinet preferred to sell it through competitive bidding instead of negotiations.

The Finance Department generated P31.3 billion from from the sale of government’s shares in Manila Electric Co. and Petron Corp. It raised P92 billion from privatization in 2007.

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