DOF: Relax audit rules in sale of gov’t assets

MANILA, Philippines — The Department of Finance (DOF) has directed the Privatization Management Office (PMO) and Philippine Deposit Insurance Corp. (PDIC) to discuss with the Commission on Audit (COA) ways to relax auditing rules that have slowed down the disposal of idle public assets.

According to the DOF, Finance Secretary Carlos Dominguez wants these agencies to talk about COA Circular 89-296, which he said has hampered, rather than facilitate, efforts of the government to dispose of these idle properties.

The circular states that government assets should be divested either through public auction, negotiated sale, barter, or transfer to other government agencies based on their appraised value.

“I want a meeting organized with the COA, mainly with the representatives from PMO, PDIC, the banks—the two (state) banks we have. The central bank may want to participate,” Dominguez said during a recent DOF executive committee meeting.

 “Tell them that this COA requirement that we sell at market value isn’t working because we just keep on adding to the titles, particularly with the PDIC, and we’re just getting overwhelmed,” he added.

Rather than continuing to impose an “ineffective” set of rules, Dominguez said the government would be better off selling government assets at discounted prices that would attract more buyers who would then be able to redevelop these properties.

“The objective is to ask COA to cooperate with us and propose ways of turning these assets into cash, because cash helps the economy. Selling it even at a discount allows these assets to be redeveloped and used. Right now, it’s just an expense,” he said.

 PMO, an attached agency to the Department of Finance (DOF), said agencies such as PDIC, Land Bank of the Philippines, Development Bank of the Philippines (DBP), and Bangko Sentral ng Pilipinas (BSP) have been unable to sell many of their idle properties due to the COA circular, which was issued 30 years ago.

Citing chief privatization officer Gerard Chan, the DOF said PDIC, alone, has some 23,000 land titles to dispose of.

However, Chan said the PMO is not covered by the 30-year old circular.

He said this was made clear by the state audit agency in a memo issued on Nov. 20, 2017, which states that “COA Circular 89-296 does not apply to foreclosed assets held by PMO and sold in the ordinary course of business” and “the assets/properties held by the PMO pursuant to Proclamation No. 50 and sold in the regular course of its business are not within the purview of COA Circular No. 89-296.”

According to Dominguez, unproductive or idle state assets only add to the state’s financial burden, considering that taxes have to be paid and personnel have to be hired to keep these properties serviceable.