Asset sale target just P10B for 2009

MANILA, Philippines - The government expects to earn just P10 billion from asset sales next year, citing, among others, the possibility of discounted offers ahead of a change in administration. "It is relatively small," Finance Secretary Margarito B. Teves told legislators on Tuesday, adding that the main asset up for auction will be the Food Terminal, Inc. (FTI) complex in Taguig. While privatization has raised just P7.48 billion as of August, Mr. Teves said the final tally for 2008 could hit nearly P50 billion via the planned sale of stakes in Petron Corp. and the oil and gas exploration arm of Philippine National Oil Co. (PNOC). "For 2008, we programmed less than P30 billion. We hope to generate more from privatization. Based on our projections, we can get P41 billion from PNOC-EC (Exploration Corp.) and Petron. It will be close to P50 billion against our target of P30 billion." Development Budget Coordination Committee documents state asset sale targets of P10.55 billion in 2009 and P11.06 billion in 2010. Finance Undersecretary Gil S. Beltran Wednesday said this was a "conservative view". "That (FTI) is what we think will be sold but we can move some more [assets] for next year. It depends on the need for funds and price of the assets," he said. "We are moving closer to an election year [in 2010]; we don’t want to be accused of engaging in a fire sale. Usually, as election time comes, investors adopt a wait-and-see attitude as they anticipate the next leader. "We may not get the best price. We don’t want to expose assets to a slowdown in demand." This year’s P30-billion target had originally included the FTI complex. Also up for disposal are property in Fujimi, Japan and a stake in Eastern Telecommunications Philippines, Inc. (ETPI). The sale of FTI this year was deferred due to a weak property market, while the Fujimi plan has hit a roadblock: the Philippine ambassador’s official residence occupies part of the property. The government, meanwhile, has agreed to enter a negotiated sale with Ongpin-led ISM Communications Corp. regarding a 10.2% stake in ETPI after a failed bidding last year. The government raised P90 billion from privatization last year and Mr. Teves said "We were fortunate market conditions were very favorable in contrast to what we are seeing today. — R. A. M. Rubio, BusinessWorld