Government to raise P24.5B from privatization program

The National Government (NG) has programmed to raise P24.5 billion from its privatization efforts for this year, a top finance official said yesterday.

Finance Assistant Secretary Gil Beltran said the bulk of this amount or P24 billion has been committed by the Power Sector Assets and Liabilities Management Corp. (PSALM) from the sale of National Power Corp. (Napocor) assets that are expected to be privatized this year.

PSALM is an entity created under the Electric Power Industry Reform Act (EPIRA) to manage the finances and privatization of Napocor.

Another P500 million will come from the other assets to be sold by the NG.

Beltran said these privatization proceeds form part of the revised P203.9-billion consolidated public sector financial position (CPSFP) or 3.8 percent of the country’s gross domestic product (GDP) for this year.

According to Beltran, in case PSALM fails to meet the programmed proceeds from its privatization effort, the entity will have to look for other means to remit such fund.

The finance official did not say where PSALM can get the projected funds. Up to now, PSALM has sold only one big ticket generating asset of Napocor (600 MW Masinloc power plant) and some small hydro power facilities.

PSALM is expecting to sell 70 percent of the generating assets of Napocor by end-2005 and transmission assets by October this year. At present, it has sold only more than 10 percent of the generating assets of Napocor.

The National Government has already assumed the P200-billion debt of Napocor. At present, there are only about P375-billion debt that remain in the Napocor’s books.

Under the revised CPSFP, the monitored government-owned and controlled corporations (GOCCs) will incur a deficit of P42.5 billion, of which P36.34 billion will be accounted for by Napocor.

But Beltran said the revised CPSFP did not include yet the proceeds from some mitigating measures such as expanded value-added tax (EVAT) amounting to P9 billion and the tariff increase of Napocor amounting to P3 billion.

For 2006, the consolidated public sector deficit is expected to improve to P168 billion of which monitored GOCCs will account for P36.1 billion.

From the expected budget deficit of P180 billion this year, the National Government is programmed to incur P160-budget gap in 2006.