Recto wants pension funds to buy government stake in SCTEX

MANILA, Philippines — Finance Secretary Ralph Recto wants the two pension funds to buy the government’s share in toll roads to ensure that the state will not be at a loss.

Recto said the government is looking at all government stakes in toll roads, particularly in the Subic-Clark-Tarlac Expressway (SCTEX) where it has a 50-percent share.

However, the administration may not just be looking at the private sector as buyers as pension funds Social Security System (SSS) and the Government Service Insurance System (GSIS) are also being considered.

“Maybe the SSS and GSIS can buy them so the pension funds can earn. I think it’s a good deal,” Recto told reporters.

“I think it’s better off that we sell those shares to raise revenue, non-tax revenue, and much better if the pension funds buy from us so they can also benefit,” he said.

Recto did not say how much the government can get from such a move, but maintains it is “fairly significant.”

“We will be meeting with them (SSS and GSIS) soon (to float the idea). The government will not be at a loss because it’s also SSS and GSIS,” Recto said.

Finance Undersecretary Catherine Fong explained that selling to the pension funds is possible as these assets are still valuable.

“Apart from the fact that government-to-government transactions are faster, we want the pension funds (if they can acquire the assets) to take advantage of the upside. In this way, it benefits the public better,” Fong told The STAR.

SSS president and CEO Rolando Macasaet, for his part, said the SSS is willing to consider brownfield investments or those that already exist.

The SSS is avoiding risks especially as the agency is a pension fund, not a development fund.

“So in the finance part, we don’t want greenfield investments, we want brownfield ones,” Macasaet told reporters.

“So in toll roads, I’m interested in that, because there’s no more risk, they already have the cash flow. It’s existing,” he said.

Maharlika Investment Corp. president and CEO Rafael Consing said the sovereign wealth fund is also interested in investing in toll roads, but did not elaborate if it is eyeing SCTEX.

Last week, the Bases Conversion and Development Authority (BCDA) said Pangilinan-led Metro Pacific Tollways Corp. (MPTC) has proposed to buy out the government’s portion in revenue sharing in SCTEX.

BCDA president and CEO Joshua Bingcang earlier said the agency has received an offer of roughly P20 billion from MPTC for the SCTEX buyout, but the BCDA plans to ask for more to improve its financial standing and benefit state coffers.

The SCTEX stretches for about 95 kilometers starting from Tarlac City to Hermosa, Bataan. It is linked to some of the most important infrastructure in Central Luzon, particularly the Clark International Airport, Clark Freeport Zone and Port of Subic.

The expressway is operated by MPTC through its subsidiary North Luzon Expressway Corp.