Gov’t can’t sell big-ticket properties this quarter

The sale of three state assets — estimated to add P30 billion to the effort to trim this year’s budget shortfall — has been pushed back to the second quarter. "[We are] unlikely to meet the first-quarter deadline for PNOC-EC (Philippine National Oil Co.-Exploration Corp.). I think there will also be a delay in the case of FTI (Food Terminal, Inc.) and Fujimi," Finance Secretary Margarito B. Teves told reporters on Wednesday. The government wants to privatize the three assets as it tries to keep its budget deficit at P293-billion this year. It has tried a number of times to auction off all three — the last time at the end of last year — but failed due to poor market conditions and lack of investor interest. Last year’s failure to sell contributed to a record P298.5-billion deficit. In the case of the PNOC-EC, Teves said a new board had to approve the sale terms. The government also wants to sell the PNOC-EC’s 10-percent interest in the Malampaya natural gas project first before its 60-percent stake in the oil, gas and exploration firm. The previous PNOC-EC board, Teves said, had been unable to decide on a financial adviser and how to sell the asset. He also cited pricing problems for the sale of the FTI and the lease of the government’s property in Fujimi, Japan. "It is something we cannot totally control. It is an issue between buyer and seller," he said. Finance Undersecretary Crisanta S. Legaspi said in a telephone interview the government still hoped to raise roughly P30 billion from the sale of the three assets. "P30 billion is the projected remittance to the BTr (Bureau of the Treasury) from the sale," she said. She said the government expects P14 billion from the sale of the PNOC-EC, including the company’s 10-percent interest in Malampaya; P10 billion from the 103-hectare FTI property; and P3 billion from the lease of the Fujimi property. The government has twice failed to auction off the FTI after no bids were submitted and is now looking at a negotiated sale. Officials have said two parties were interested, but did not identify these. The property in Fujimi is part of Tokyo’s World War II reparations to the Philippines and is where the Philippine ambassador to Japan lives. An auction for the right to develop Fujimi failed in December, prompting the government to explore a "negotiated development" for the property. Asked about the prospects of selling the three assets, Legaspi said: "We will try our best to live within the timetable." — Louella D. Desiderio, BusinessWorld