The Department of Finance (DOF) reported that proceeds for privatization for the year would reach only P600 million, generated mainly from the sporadic sale of minor assets.
Finance Undersecretary Eric O. Recto told reporters that from January to date, the government has raised P500 million and only P100 million is expected to be generated for the remainder of the year.
The government planned to dispose of a number of major assets, including its remaining holdings in Petron Corp., Philippine National Construction Co. and the Malampaya project.
Recto was specifically courted by Finance Secretary Jose Isidro Camacho to join the DOF to be his point-man in the privatization program in an effort to bridge the budget gap through the sale of state-owned assets.
By mid-2003, however, it had become clear that the Arroyo administration had no intention of getting out of businesses that it had decided to unload. Even the plan to privatize the vast New Bilibid Prisons reservation in Muntinlupa was indefinitely shelved due to the resistance of the Department of Justice (DOJ).
Recto declined to comment on the lack of political will to unload key government assets, but said that as a result of the failure to undertake its earlier commitment, the Arroyo administration would have to contend with drastically-reduced proceeds from privatization.
This month the government plans to bid out the development contract for its properties in Tokyo and Kobe, marking this year’s first major privatization effort of the Arroyo administration which had planned to raise at least P1 billion from the sale of its idle assets.
Earlier, the sale of the government’s Makati property formerly occupied by the International School failed because the indicative price was too high for a property that was classified as institutional.
Also, the government-owned Mile Long property has been besieged with conflicting interests between the current tenants and the government.
Despite some initial opposition, Recto said the bidding for the build-operate-transfer (BOT) contract for the Japan property is now being finalized and the terms of reference are being readied for the prospective bidders.
Recto said at least 13 prospective investor groups have signified interest in bidding for the contract and the bids and awards committee has already invited investors to apply for eligibility both in the Philippines and Japan.
The Arroyo administration made a commitment to World War II veterans last year that government would sell its assets in Japan to finance their retirement benefits that have so far not received budgetary allocations.