Gov't to issue P6-B privatization bonds

The government has scheduled for April the issuance of privatization certificates worth anywhere from P4 billion to P6 billion.

This was revealed yesterday by Finance Undersecretary Joel Bañares who said the certificates will help the government meet its projected budget deficit of P62.5 billion this year.

The privatization certificates are represent borrowings which are convertible to equity in any of the following government assets. The government's remaining stake in the Manila Electric Corp., the Philippines National Construction Corp. and the Philippine National Oil Co.-Energy Development Corp.

The government still has a 10-percent stake in Meralco, almost 90 percent in PNCC and a 100-percent stake in PNOC-EDC.

The privatization certificates will come in denominations of P25,000. According to Bañares, the yield on the privatization certificates will be slightly lower than the yield on the five-year Treasury bonds. The government is also planning to raise about P18 billion from the privatization of other government assets. These include the Philippine Phosphate and Fertilizer Corporation (Philphos), the Philippine Postal Corp., and television stations RPN-9 and IBC -13.

The government's remaining stake in Philippine National Bank is also up for bidding in April. The privatization of PNB is holding up the release of about $200 million in loans from the World Bank, under the Bank Sector Restructuring Loan (BSRL).

However, the privatization of PNB is being delayed until the completion of an audit by Price Waterhouse Coopers. There have been some rumors that the audit report would be negative, but other sources are more optimistic.