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FTI sale gives government more fiscal space - Purisima

By Iris C. Gonzales (The Philippine Star) Updated August 16, 2012 12:00 AM

MANILA, Philippines - The successful privatization of Food Terminal Inc. (FTI) to property giant Ayala Land Inc. for P24.33 billion gives the government more fiscal space, Finance Secretary Cesar Purisima said yesterday.

With the bigger fiscal space, the government can accelerate spending if it needs to, he said.

At the same time, a bigger fiscal space may also mean that the yearend budget deficit may fall below the programmed ceiling of P279 billion or roughly 2.6 percent of gross domestic product (GDP).

In January to June, the government’s budget gap stood at P34.482 billion. This is still way below the programmed ceiling of P109.341 billion for the period by roughly P79 billion.

In June alone, the deficit hit P11.696 billion, wider than the P7.691 billion posted a year ago.

But more than the improvement in the government’s fiscal position, Purisima said the successful sale of the FTI property bodes well for the Aquino administration’s efforts to attract private sector investment.

“More importantly, it should spur more private sector investments and the continue development of Taguig,” he said.

The government sold 74 hectares of the 103-hectare FTI property in a public bidding on Tuesday.

In a statement, Ayala Land said it would transform the property into another business district.

“Given its proximity to C5, South Luzon Expressway and the Skyway, Ayala Land will transform this property into another business district, where we will bring all our product lines into the development,” Ayala Land said.

It said the property was acquired at a significant discount compared to the land values in Makati and Bonifacio Global City.

“We look forward to leading this urban renewal program which will spur economic activity for the City of Taguig and the rest of the country,” Ayala Land said.

Ayala Land beat two other giant property developers Robinson’s Land Inc. of the Gokongwei group, which offered P14.66 billion and Andrew Tan’s Empire East, with a bid of P11.2 billion.

Ayala will pay P19.465 billion as upfront payment within 60 business days, with the balance to be settled within one year.

The FTI agro-industrial complex is one the largest industrial complexes in Metro Manila and is currently home to more than 300 companies.
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