By Iris C. Gonzales (The Philippine Star) Updated February 22, 2010 12:00 AM
MANILA, Philippines - Faced with a swelling budget deficit, the government has decided to lower the selling price of the 103-hectare Food Terminals Inc. (FTI) property in Taguig.
The Department of Finance is now willing to sell the agro-industrial lot for roughly P9 to P10 billion from a previous estimate of P13 billion so that it can dispose of the property in the first quarter of the year, Finance Secretary Margarito Teves said Friday night.
“P13 billion is something that might be too difficult at this point in time so we’re looking at somewhere between P9 and P10 billion,” he said.
The Finance chief said the government is currently in talks with two to three parties for a possible negotiated sale of the FTI property.
FTI is a 120-hectare agro-industrial commercial estate in Taguig. It was originally built to be a food processing and consolidation center for agricultural products. It houses more than 300 small-to-medium scale companies engaged in different industries such as manufacturing, garments and electronics.
Of the 120-hectare property, the government is selling 103 hectares because the remaining 17 hectares are owned by the National Food Authority (NFA).
Last year, private property developers snubbed a public bidding for the property, resulting in a failure of bidding.
Four developers including the Ayala Land Inc. and the Gokongweis’ Robinsons Land Corp. earlier expressed interest in vying for the FTI property but none of them submitted bids during last year’s sale.
The government is counting on the FTI sale to boost revenues and plug an estimated record deficit of P293 billion this year. Proceeds from the FTI sale will form part of the P30 billion programmed collections from privatization of state-owned assets this year.
The rest of the big-ticket items in the P30 billion target are the 60 percent stake of the government in Philippine National Oil Company- Exploration Corp. which is expected to translated to P14 billion to P15 billion in revenues and its real estate property in Fujimi, Japan to be leased out for P3 billion.
In 2009, the budget gap swelled to P298.5 billion last year, above the expected P290 billion and also higher than the target for the period of P250 billion because of anemic revenues and additional spending.
This is more than four times the P68.1 billion deficit registered in 2008 or an increase of 338.3 percent.
In December 2009 alone, the budget deficit amounted to P26 billion, significantly higher than the deficit of P1.4 billion posted during the same month of the previous year.