Target revenue from sale of assets hiked to P17 B

The government has raised its projected revenues from the privatization of several big-ticket government assets this year to P15 billion to P17 billion from P10 billion.

Finance Secretary Alberto Romulo said government has already prioritized the privatization of government’s stakes in power distributor Manila Electric Co., TV network IBC-13, tollway operator Philippine National Construction Corp., several properties of International School and Muslim-bank, Amanah Bank.

Romulo said government expects bigger revenues from the sale of these assets with the renewed enthusiasm expressed by interested investors. "Market conditions appear to have improved and we hope to get better offers this time around," Romulo said.

The previous administration botched several attempts to sell the assets last year as there were no takers. For instance, there were two failed biddings each for PNCC and IBC-13.

Romulo said, however, that there are now at least three groups interested in acquiring government’s stake in PNCC, including the Lopez Group and businessman Jose Alvarez who offered to buy the tollway facilities and properties of the semi-government firm.

The sale of these assets will help in easing government’s huge budget deficit projected at P145 billion this year.

In a related development, the government is awaiting the legal opinion of the Department of Justice (DOJ) on the legitimacy of an executive order which extended the corporate lives of the Asset Privatization Trust (APT) and its attached agency, Committee on Privatization (COP) for government to be able to continue the privatization of state assets.

The APT’s mandate expired November last year but was replaced by the State Privatization Council (SPC) through Executive Order 323 signed by deposed president Joseph Estrada.

Under the EO, proceeds from the privatization program which will be remitted to the national treasury will be broken down as follows: 60 percent to the special account of the agrarian reform fund and 40 percent to the general fund.

For government-owned and controlled corporations (GOCCs), excluding the Government Service Insurance System and Social Security System) the amount remitted to the treasury should be least 50 percent of net proceeds.

The EO also specifies that physical assets remaining at the end of the corporate life of APT will immediately be transferred to the Privatization and Management Office (PMO) under the Department of Finance for appropriate disposition.

The SPC will be chaired by the Secretary of Finance, with Secretaries of Budget and Management, Trade and Industry, and the National Economic and Development Authority as members, while the National Treasurer and the chairman of the Presidential Commission on Good Government will be non-voting members of the council.

Earlier, Romulo said government had asked the DOJ on whether the creation of the SPC through an EO would suffice, or whether this would need legislation. He said the clarification is needed since government wants to ensure that the assets to be privatized will not face legal hitches.