Pricing holds key to privatization of government assets — Recto

Revenue-raising efforts of the government should focus not only on imposing new taxes but also on liquidating certain assets at the right price, Finance Undersecretary Eric O. Recto said yesterday.

"Under the circumstances, every little bit counts," Recto said. There are still several assets that could be sold aside from the most controversial holdings in Petron and Malampaya, he added.

Last year, the government bid out the development contract for its remaining properties in Japan but the award of the contract has been suspended for lack of final presidential approval.

This year alone, the Arroyo administration has to raise at least P100 billion to support its budget after deciding to absorb some P500-billion worth of obligations from the National Power Corp. (Napocor).

According to Recto, it is not enough for government to make a firm decision to privatize certain assets. He said realistic pricing of government assets is also critical to the success of these efforts.

In May, the government was forced to declare a failed bid for two parcels of land in the controversial Mile Long property in Makati that officials hoped would generate at least P360 million.

The lots were the only properties unencumbered by any controversy, forcing the Privatization Management Office to exclude the more disposable portions of the property now occupied by the Prieto family.

Sources from the PMO said no one showed up at the public auction for the two lots – one a 2,798-square meter property along Sen. Gil Puyat avenue corner Tindalo street and the other a 437-square meter land along Amorsolo street corner Dela Rosa street in Makati City.

The PMO set a floor price of P328.7 million for the bigger parcel of land and a floor price of P29.997 million for the other, but neither property attracted any buyer.

Sources said the indicative price might have been "too much" for any buyer.

The failure of the bidding was reminiscent of the controversial Bel-Air property that used to be occupied by International School – an auction also ignored by buyers because the price was too high.