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Govt to auction off Welfareville compound

Monday, August 24, 2009 [ manilatimes.net ]

By Lailany P. Gomez, Reporter

THE Department of Finance said it is looking at privatizing real-estate assets held by the Project Management Office and the Presidential Commission on Good Government (PCGG) to partly finance next year’s funding requirements.

The government expects to raise P1.335 trillion in revenues next year, or P10 billion more than the original projection of P1.325 trillion.

The additional P10 billion will come from privatization proceeds, Finance Undersecretary Crisanta Legaspi said.

The Finance department is looking at the sale of the National Bilibid Prison, properties in Ortigas and Welfareville in Mandaluyong.

“There are some issues we have to thresh out but we are firming up along the way. Welfareville, I think, [the] total will be larger than P10 billion, but we have to thresh out issue[s] among properties. It’s a rough figure,” Finance Secretary Margarito Teves said.

The department originally planned to raise only P2.5 billion from the sale of state-owned assets next year, but the government’s privatization group raised its goal.

Legaspi earlier said the government would make an inventory of its real-estate assets nationwide to find out which ones could be sold to developers next year.

The Development and Budget Coordinating Committee (DBCC) had recommended a P1.541-trillion budget for 2010 as the government prepares for another economic resiliency package worth at least P200 billion.

The 2010 spending bill is 8 percent higher than this year’s P1.426-trillion appropriation.

The latest assumptions have led to a revised budget deficit of P233.4 billion from P208.4 billion earlier.

Economic managers had said there’s a need to widen the budget deficit so the government could spend more next year and help the economy prepare for a global recovery.

Budget Secretary Rolando Andaya had said the proposed 2010 budget is in line with the goal of reducing the fiscal deficit to 2.8 percent of gross domestic product (GDP) from an estimated 3.2 percent this year.

An indicator of economic performance, GDP is the amount of final goods and services produced in a country, while the deficit-to-GDP ratio is a key measure of how sustainable is the government’s revenue shortfall.

The proposed 2010 budget is premised on the country’s GDP growing by 2.6 percent to 3.6 percent next year.

In June, the DBCC agreed to raise the 2009 budget deficit to P250 billion, or 3.2 percent of GDP from P199.2 billion, or 2.5 percent of GDP following the sharp slowdown of the domestic economy in the first quarter.

It also scaled down the projected GDP growth for 2009 to a range of 0.8 percent to 1.8 percent from the previous range of 3.1 percent to 4.1 percent.

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