VP bucks sale of government stake in Malampaya

Vice President Teofisto Guingona has expressed strong opposition to the government’s plan to "securitize" this year a substantial part of the Malampaya natural gas project to raise at least half a billion dollars in the face of a projected P202-billion deficit.

"Let us not sell our national patrimony "let us not securitize the earnings of Malampaya," the Vice President told a gathering at the University of the Philippines Monday night to mark the 84th birthday of the late historian and nationalist Renato Constantino.

Guingona said were the historian alive today, he would be bristling at the rate in which the national patrimony is being sold to foreigners to benefit foreigners. "Ka Tato [Constatino] would have fought for the retention of our national patrimony," he said in a tribute to the late historian, who had radicalized Philippine historiography through a life-long project to wean away the Filipino consciousness from colonialism and colonial mentality.

He said keeping the government’s stake in the project – which started in mid-2001– is "in our national interest."

Earlier Finance Secretary Jose Isidro Camacho disclosed that the government has received proposals from four investment banks to handle a bond issue to be backed by part of the $10-billion the government is expected to earn from the Malampaya project over the next 20 years.

"The Malampaya securitization is one of the things we want to do this year to offset revenue items that may not come in," said Camacho, adding however that the National Government must first resolve a royalty-sharing dispute with the provincial government of Palawan, as well as determine if the securitization would not violate provisions of the Electricity Power Industry Reform Act.

The Finance official said proposals to securitize Malampaya’s earnings came from ING, Lehman Brothers, Credit Lyonnaise and Morgan Stanley Dean Witter. The Royal-Dutch Shell group and US firm Texaco each has a 45-percent stake in the project while the state-run PNOC Exploration Corp. holds a 10-percent.

PNOC has announced it is selling a majority stake in its 99.78 percent share in its exploration arm but expects the government to retain around 40 percent. Officials have been considering three options for the sale of PNOC-EC’s 10 percent stake in the Malampaya gas project, worth around $ 200 million.

First, the company may hold a secondary offering for its Malampaya shares, or sell its 10 percent stake to current partners – Shell Philippines Exploration and US-based Texaco. It may also create a separate company holding PNOC-EC’s shares in the project, which could be listed on the Philippine Stock Exchange.