Department of Finance set to sell government stake in PNOC-EC

MANILA, Philippines – The Department of Finance (DOF) is determined to sell the government’s 40-percent stake in PNOC-Exploration Corp. (PNOC-EC) this year despite reservations expressed by several sectors including the management of PNOC-EC.

PNOC-EC said it may be better to sell the government’s stake in the company when market conditions are better or after the global financial turmoil. PNOC-EC, the upstream oil and gas subsidiary of the state-owned Philippine National Oil Co., said it may not be good to privatize the company at this time.

PNOC-EC compliance officer Jose Eijansantos earlier told the Philippine Stock Exchange (PSE) that any “forced privatization may not be advantageous to the corporation and the government.”

“As far as PNOC-EC is concerned, its privatization at this time is untimely due to depressed stock market prices,” Eijansantos said in the disclosure.

However, Finance Secretary Margarito Teves said the move to sell the government’s 40-percent stake in PNOC-EC this year is a “policy decision.”

He maintained that the government plans to sell PNOC-EC and the Food Terminal Inc. (FTI) property in Taguig by the end of September.

“Decisions will have to be made collectively. The Cabinet and the President has made a decision that depending on the prudence and market condition we will go ahead with the planned sale,” Teves said.

According to him, the planned disposition of the two major assets is scheduled within the third quarter of the year but could spill over to October.

The government hopes to raise about P30 billion from the sale of major assets this year. It expects to raise P11 billion from the sale of PNOC-EC and another P10 billion from the disposition of the FTI property.

FTI is a 120-hectare agro-industrial commercial estate in Taguig. It 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.

Finance officials said the Privatization and Management Office (PMO) has yet to announce the floor price for FTI.