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3 prime properties lined up for privatization next year


[ ] August 2, 2009

Everything must go.

The government will try to sell three major prime properties in Metro Manila next year to meet its privatization goal of P12.5 billion, which includes the disposal of the sprawling National Bilibid Prisons (NBP) in Muntinlupa City.

Finance Secretary Margarito Teves disclosed over the weekend that aside from the 551-hectare NBP property, the government will also sell its 18.4-hectare property in Ortigas in Pasig City and the 100-hectare Welfareville Compound in Mandaluyong City. Teves said proceeds from the sale would help plug the government’s programmed deficit of P233.4 billion or 2.8 percent of gross domestic product (GDP) for 2010 instead of the earlier projected P208.4 billion shortfall equivalent to 2.5 percent of GDP.

The NBP property had been a perennial "candidate" for privatization over the years by previous governments and could fetch a price tag of P10 billion to P11 billion.

The property houses the main prison system of the country and is under the Department of Justice (DOJ).

During the term of President Corazon Aquino, a portion of the property, about 104.22 hectares, was carved out from the NBP for the housing needs of DOJ employees and other agencies now known as the Katarungan Village.

It was not immediately clear if the government will find a new place for the prison population once the NBP property is privatized.

The Ortigas lot, popularly known as the "Payanig sa Pasig" property, is a surrendered "sequestered" asset from a former Marcos crony, and is estimated to fetch a price of P14.8 billion based on prevailing market value of P80,000 per square meter.

The Payanig sa Pasig property borders Ortigas, Doña Julia Vargas and Meralco Avenues at the heart of the Ortigas central business district in Pasig.

At present, a big portion of property is occupied by Metrowalk, an upscale shopping, dining and recreation center and also being leased out to MC Home Depot and Ortigas Home Depot.

The lot is under the jurisdiction of the Presidential Commission on Good Government (PCGG), which has been the subject of a legal dispute as the Marcos family tries to wrest control of the prime real estate.

Ilocos Norte Rep. Ferdinand "Bongbong" Marcos Jr. has claimed his father bought the Pasig property for P6.4 million at P40 per square meters from Ortigas and Company Limited Partnership on May 31, 1968.

Francisco Ortigas Jr., president of Ortigas and Co., has claimed President Marcos coerced them into giving up their rights over the property for a losing price.

The Sandiganbayan and the Supreme Court have so far dismissed the Marcos petition in 1998 and 2003, respectively.

The Welfareville Compound is located in Barangay Addition Hills in Mandaluyong City.

The compound is under the administration of the Department of Social Welfare and Development (DSWD) and has been colonized by squatters since 1986.

The DSWD has tried also to dispose the property and even asked permission from the Department of Budget and Management (DBM) to apply the proceeds for its own programs and projects but it was vetoed by President Arroyo herself under the 2009 budget.

From the estimated prices of the three prime real estate assets, the government will just have to dispose one property and the proceeds would be enough to cover the P12.5 billion privatization target for next year.

The government has set a national budget of P1.54 trillion and a revenue income of P1.195 trillion next year with non-tax revenues totaling P139.9 billion in 2010.

The privatization target of P12.5 billion was P10 billion higher than the original target of P2.5 billion and P17.5 billion higher than the current year privatization goal of P30 billion.

The Development Budget Coordination Committee (DBCC) has to tweak its privatization target for next year after revising its programmed deficit to P233.4 billion from the initial P208.4 billion.

The DBCC also expects the GDP rebounding to a range of 2.6 percent to 3.6 percent in 2010 from this year’s estimated range of 0.8 percent to 1.8 percent.


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