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Business

Government readies sale of mining assets

Czeriza Valencia - The Philippine Star

MANILA, Philippines — The government is preparing to sell mining assets to raise more funds for pandemic-related expenses, Finance Secretary Carlos Dominguez said yesterday.

President Duterte, in a public address Monday night, said the planned disposal of several state-owned assets may push through because of rising pandemic response needs and the threat of a wider contagion caused by new COVID-19 variants.

On top of the list of assets for disposal are large, idle mines initially identified by the Privatization and Management Office (PMO), an agency under the Department of Finance (DOF).

“As we mentioned several months ago, we are preparing to sell assets that are under the PMO. And essentially, those are certain large mines that are under the management of the PMO,” Dominguez said in a briefing late Tuesday.

He said the DOF has been working with the Mines and Geosciences Bureau (MGB) and the Department of Environment and Natural Resources (DENR) for the disposition of several mines including the Nonoc nickel project in Surigao del Norte and the Basay copper mine in Negros Oriental.

“And with the developments in copper prices internationally, the values of those assets have certainly increased. That will be one of the large sources of funds for our future deficit, if at all,” said Dominguez.

He said the amount that can be raised from the disposition of such properties is still being determined.

On Tuesday, economic managers said around P170 billion would be needed to fund supplemental support to areas hit hardest in the pandemic-induced recession.

This would likely be funded by government savings, increasing the dividends remitted by state-run firms, and other revenue-neutral measures.

Given the increased revenue and disbursement program, the deficit program for this year was raised to 9.4 percent of gross domestic product (GDP).

Despite the enormous funding requirement still needed for pandemic response, Dominguez said the government intends to keep borrowings in check.

He said for this year, the country’s debt in proportion to its economic output can still be expected to remain at under the internationally acceptable level of 60 percent.

The country entered 2020 with a historic low debt-to-GDP ratio of 39.6 percent, but this has risen to 54.5 percent due to unplanned spending and a reduction in revenues as lockdowns severely limited business activities.

Senators backed yesterday suggestions to sell government assets to raise funds for the COVID-19 pandemic response but asked Malacañang to make sure that properties which provide steady revenues be retained and ensure that something substantial would be left for future generations of Filipinos.

Senate Minority Leader Franklin Drilon and Sen. Panfilo Lacson in separate statements called for an audit of assets held by government-owned and controlled corporations (GOCCs) to determine which may be privatized or sold without harming public interest.

Drilon said some GOCCs themselves – like the Philippine Amusement and Gaming Corporation (PAGCOR) and Philippine Charity Sweepstakes Office (PCSO) – can be privatized with regular income accruing to government coffers.

“I support the sale of government assets, like the Muntinlupa New Bilibid Prisons, and privatization of PAGCOR and PCSO. We can review the GOCC list, and decide which one should be privatized,” Drilon said.

Lacson said due to the pandemic, there is need to consider extraordinary measures to allow the nation to survive.

“Proper and prudent steps must be taken in consideration of the country’s long-term survival, thus avoiding that future generations of Filipinos will be left with nothing.

He said there are a number of GOCCs with real estate and other assets but continue to receive subsidies from the national government annually “mainly because they are mismanaged - if not being used as cash cows by unscrupulous officials.” – Paolo Romero

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