GMA orders Roxas to proceed with foreclosure of National Steel

NEW YORK – President Arroyo has given the go-signal to Trade and Industry Secretary Manuel Roxas II to proceed with the foreclosure of the mothballed National Steel Corp. (NSC) and prepare it for reopening within the next six months.

Talking to reporters before she left New York last Monday, President Arroyo said Roxas has informed her about the outcome of his talks with the NSC creditor banks, the National Development Co. (NDC) and the Pengurusan Danaharta Nasional Berhad which finally agreed to set a timetable for the foreclosure of NSC.

"Hopefully, we can do it within the first half of the year because the second half of the year, the US market will probably bounce back and our exports will probably bounce back," President Arroyo said.

"So what we’re looking for now are ways to keep up our domestic demand until our foreign markets get back. So I’d like it (NSC foreclosure) be done first half of this year," the President pointed out.

President Arroyo said the government’s foreclosure plans for the NSC would hopefully get off the ground finally. Last year the government’s attempts to settle the issue was sidetracked by other corporate issues such as claims by major creditors and unpaid salaries and other obligations to laid off workers.

"While our exports were going down, we have to look for the domestic demand without increasing our budget deficit," she pointed out.

"Everybody asks me how we grew at 3.7 percent (GNP) with 30-percent decline in exports. So I said it’s our domestic demand," she said.

Since the NSC is run by the state-owned NDC, the mothballed steel firm is still supported financially through the annual budget of the National Government.

On instructions of the President, Roxas flew to Malaysia last month to discuss with top executives of Danaharta the foreclosure plans of the Philippine government involving the state-owned NSC.

"Secretary Roxas went there to talk to Danaharta and tell them of our plans to form an Asset Management Co. (AMC) to take over the assets of NSC and manage them," the President said.

"So he (Roxas) talked with Danaharta and Danaharta agreed. I think the foreclosure route will be taken," President Arroyo added.

"We were hoping that (NSC foreclosure) would be settled last year but it wasn’t. So we just have to do that first half this year," the President pointed out.

"They foreclose and they take over the assets because when you foreclose, you dispose of the assets. Then the AMC can take over," the President pointed out.

President Arroyo said no less than Austria’s largest multinational firm, Voest Alpine, has expressed interest in taking over the NSC.

"Nobody will take it (NSC) although there are bidders. For instance Voest Alpine wants to take over. That’s just one, I mean if they make it available, there may be others but at least there is one," she noted.

President Arroyo said the fate of the NSC is very much a concern of hers because the steel plant, located in Iligan City where she spent her growing up years, has been the major source of livelihood of the people there.

The President said she, in fact, invited Iligan Rep. Alipio Badelles to join her official entourage here in her latest working visits abroad to precisely represent his constituents in selling the NSC to potential buyers abroad.

"The closure of NSC deprived the city of Illigan of some P50-million payroll money that’s supposed to be circulating. But we know that soon, it will be reopened," Badelles replied to the President.

The President, in turn, exhorted Badelles to help her administration steer the passage into law of a Palace-certified bill on the creation of an Asset Management Company to start the ball rolling for the NSC and other similarly-situated state-run companies up for privatization.