Gov’t mulls options for privatization of Pagcor

The Estrada administration is looking at two possible options in the privatization program of the Philippine Amusement and Gaming Corp. (PAGCOR), one of government’s principal source of revenues for its various projects and programs.

These options are selling the PAGCOR management – but retaining Alice Reyes its present chairman similar to what it did with the privatization of the Metropolitan Waterworks and Sewerage System; or selling it in three different blocks such as Luzon, Visayas and Mindanao with the winner of one block being automatically disqualified from bidding for the other blocks.

These options were disclosed yesterday by Budget Secretary Benjamin Diokno in a breakfast forum where he reiterated the President’s serious intention in selling PAGCOR.

He said the Cabinet, especially the economic managers of the President, was asked to seriously study different options – keeping in mind the best alternative that would earn for the government the most benefits – in pursuing the planned privatization.

He said the value of PAGCOR – based on government’s net earnings from it of P5 billion a year – is about P100 billion, if it were to be sold via the IPO (initial public offering).

He said what seems to be the most logical option is to privatize PAGCOR via the MWSS formula under which the metropolis was divided into two zones, the east and west sectors and sold to two parties which continue to pay the government revenues for running the utility firm.

He said this could undertaken by dividing the country into three regions, for PAGCOR’s case, namely the Luzon and Metro Manila, Visayas and Mindanao regional operations which will be bidded out to different parties. But the winner in one region will automatically be disqualified from bidding for the others.

Asked if the Estrada administration is also thinking of privatizing the Philippine Charity Sweepstakes Office, Diokno said PCSO is out of the question. "If it ain’t broke, then don’t fix it," he replied.

On another subject, Diokno expressed optimism that Congress will pass on third and final reading the P725-billion proposed budget for 2001 before it goes on recess next Friday for the All Saints Day celebration. He said he was confident as well that the budget will be passed this year despite the political disturbances going on in the country.

He said, however, that some changes will be made on the parameters of the budget namely the exchange rate of P42 (as originally proposed) will be changed to P44.50 to $1; the GNP target of 4.5 to 5.5 percent will be scaled down with the GDP or gross domestic product to remain unchanged at four to five percent and inflation adjusted to six percent from five percent.

Diokno also disclosed that the continued fall of the peso will be arrested as soon as possible and that the deterioration in the peso value (against the dollar) is just a temporary aberration brought about by both internal (political turmoil) and external (the strength of the US economy due to the upward adjustment in T-bills) factors and still some possible adjustments in the value of crude oil in the world market.