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Asset sales next year to focus on state-owned properties

Saturday, August 8, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]


Next year’s privatization program will focus on the sale of state-owned properties located within the country, as the government is expected to have sold the big ticket items this year, the Finance department said on Friday.

"For 2010, we will sell real estate assets located within the country. These include properties located in Makati and Baguio. These are not as big as the items to be sold this year," Finance Undersecretary Crisanta S. Legaspi told reporters.

Ms. Legaspi declined to be more specific, saying that the government is still finalizing the items to be placed on the auction block next year.

Finance officials had previously said that the expected privatization revenues for next year will drop to P2.5 billion from P30 billion this year.

Ms. Legaspi said sale of these assets may be done after the 2010 elections.

"Usually, we do it (auction) during the second quarter," she said.

[But] During an election year, investors adopt a wait-and-see attitude so it is hard to sell during the first part of the year," she added.

"Some may also ask us why we are still selling assets during elections. This might lead to suspicions...Timing is important," she added.

For this year, the government aims to sell 103 hectares of the Food Terminal Inc. in Taguig, as well as its 40% stake in the Philippine National Oil Co-Exploration Corp. (PNOC-EC). It also wants to bid out the 50-year lease contract of a state-owned property in Fujimi, Japan.

The FTI is a 120-hectare agro-industrial commercial estate in Taguig City that hosts about 300 firms engaged in various lines of production and services.

The government, meanwhile, owns 99.79% stake in PNOC-EC, which has interest in eight petroleum service contracts — five located off Palawan, and one contract area each in Isabela, southeast Luzon Basin and Mindoro.

The two big-ticket items were supposed to be sold last year, but poor market conditions forced the government to defer the sale to the third quarter of this year.

Asset sale is one of the government’s means to generate revenues and to limit the fiscal deficit, which is expected to reach P250 billion this year. — A. D. B. Romero

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