Government sources told reporters yesterday that the administration is sitting on the privatization of the property for fear of sparking an outcry similar to the ongoing debate over its other properties in Tokyo and Kobe.
With revenues lagging way behind expenditures, the government’s failure to privatize key assets is bound to force more borrowings this year.
The Senate earlier said it will conduct a probe into the "sale" of three properties located in Kobe and Tokyo.
The assets were not actually sold. Instead they were bid out to private groups that will lease and develop them.
The government had plans to undertake a similar auction for the Tokyo property, currently in use as ambassador’s residence.
Sources told reporters that considering the outcry over the management contracts for the three other properties, it is not likely that the Arroyo administration will even consider privatizing the ambassador’s residence.
"We have packaged the property and it is ready for privatization but there is a lot of opposition to this specific property," said a government source who declined to be identified.
According to the source, the leading oppositor is former Foreign Affairs Secretary Domingo Siason who now serves as Philippine ambassador to Japan.
The source said Siason has been waging a campaign to stop the privatization of the ambassador’s residence, a posh location at the Fujiwi District covering a total area of 5,280 square meters right in the middle of Tokyo.
The property was last estimated to be worth at least $45 million.
According to the source, Siason had written letters to various government agencies including the Senate, citing "historical reasons" for keeping the property as an ambassador’s residence.
In on of the budget hearings, Sen. Aquilino Pimentel asked the executive department to freeze all plans to privatize the property, also for the purported historical reasons.
According to the source, however, the reason for opposing the plan may be more than just the historical value of the property. "It’s a posh location and naturally they don’t want to be kicked out of their nice house," the source said.
The source said the privatization of the Fujiwi has been forwarded to Malacañang for approval and it has not been acted since.