Government mulls sale of FTI property in 3 blocks

The National Government is looking at selling the 120-hectare Food Terminals Inc. (FTI) property in Taguig in three blocks, a ranking Finance official said.

Finance Undersecretary Crisanta Legaspi said the first block to be sold will comprise a total of 70 hectares.

She said this area has tenants that have lease contracts set to expire this year, making it practical for the government to dispose of this block first.

“We are going to break it down into three sectors. The first block would have 70 hectares,” Legaspi told reporters.

Another block, consisting of 33 hectares, has occupants with long-term lease contracts that are due in three to seven years. Yet another block has a total of 17 hectares.

Legaspi said the government is eyeing to sell the first block in the third quarter of the year.

The government has yet to determine the price of the initial area to be sold but the whole property was last valued at P15 billion. Legaspi said the government is still determining the present value of the property.

FTI, an agro-industrial commercial estate in Taguig, was originally built to be a food processing and consolidation center for agricultural products. It houses more than 300 small-to-medium scale companies engaged in different industries such as manufacturing, garments and electronics.

Government Service Insurance System (GSIS), the state-owned pension fund for government employees, has expressed interest in acquiring the property as part of its investment strategy.

Legaspi, however, said the government is not keen on selling the property to GSIS for less than P15 billion as what GSIS president and general manager Winston Garcia wants.

Garcia has said that it was not practical for the agency to offer P15 billion for the property because of the long-term lease contracts of the tenants.

The Finance Department has set a target of P30 billion from privatization for 2008 or one third of the P90.6 billion generated last year. Aside from FTI, the P30 billion includes expected revenues from the sale of the government’s stake in power distributor Manila Electric Co. and a real estate property in Fujimi, Japan.

The government has been stepping up efforts to boost state coffers but the privatization of state-owned assets has become the major source of revenues amid shortfalls in tax collections.