Government to raise P20B from sale of assets next year

The government is looking at raising P20 billion from the sale of state-owned assets next year, Finance Secretary Margarito Teves said during the weekend.

The figure is P10 billion lower than the P30-billion privatization target for 2008 and the P90.6 billion generated from the sale of government assets in 2007.

The two big-ticket items to be put on the auction block next year are the 120-hectare Food Terminals Inc. agro-industrial estate in Taguig and the government’s 40-percent stake in PNOC-Exploration Corp. (PNOC-EC).

“So if we have the two – FTI and PNOC-EC, conservatively we are putting it at P20 billion. We like to be conservative at this point,” Teves said.

PNOC-EC is the upstream oil and gas subsidiary of state-owned Philippine National Oil Co. It is also into coal development, production and trading.

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.

“Next year, hopefully, we would have the likes of PNOC-EC and Food Terminal, Inc.

There might be some opportunities that may come along the way but these two are the major ticket items for next year,” Teves said.

The Finance chief said the government’s privatization team is looking at selling PNOC-EC in the first half of the year. Earlier, officials said the government could raise P16 billion from the sale of PNOC-EC.

 Teves, however, said that it was difficult to give an estimate for now.

“I don’t have details yet because market conditions are so volatile,” he said.

The government expects to incur a deficit of P102 billion next year due to the difficult economic tide.

 It has been selling state-owned assets to help raise revenues.

Just last week, the government has entered into an agreement with the Ashmore Group, a London-listed fund manager for the sale of its 40 percent stake in Petron Corp. for P25.7 billion.

 The move would give Ashmore a controlling stake in Petron as it would increase its ownership in the company to roughly 90 percent. The Ashmore Group, which is represented in the country by former Trade Minister Roberto “Bobby” Ongpin already owns 51 percent of the company after it acquired the 40 percent stake of Saudi Arabia-based Aramco Overseas Co. in Petron for $550 million and made a tender offer to other shareholders early this year.

 With the transaction, Teves said the government is on track to meeting its programmed deficit ceiling of P75 billion for 2008.