Government to sell properties to plug deficit

MANILA, Philippines - The government is selling at least P10 billion worth of real estate properties next year to plug its widening budget deficit, Finance Secretary Margarito Teves said over the weekend.

He said the properties that might be put on the auction block in 2010 include the Bilibid property in Muntinlupa, the government’s 18-hectare Ortigas property held by the Presidential Commission on Good Government and its real estate lot in Welfare Ville in Mandaluyong City.

He said the figure could even be bigger once the government is able to resolve administrative issues surrounding the properties. “I think the total will be larger than P10 billion but we have to tresh out issues among the properties,” Teves said.

Finance Undersecretary Crisanta Legaspi, for her part, said most of the real estate assets are held by the Privatization Management Office and the PCGG.

The sale of these real estate properties is necessary as the government has raised next year’s budget deficit to P233.4 billion from P208 billion previously.

Additional revenues would come from privatization, Teves said.

Originally, the government had hoped to raise only P2.5 billion from the privatization of government assets next year.

The Development Budget Coordination Committee (DBCC), the interagency group that sets the country’s macroeconomic assumptions, approved a wider deficit for 2010 from P208 billion previously but kept the revenue goals of the Bureau of Internal Revenue and the Bureau of Customs unchanged.

Instead, the DBCC said the wider-than-expected deficit would be financed through additional revenues from privatization of state-owned assets.

As such, the government is eyeing a total of P12.5 billion in revenue from privatization of state-owned assets.

According to documents from the DBCC, the BIR is tasked to collect P875.1 billion in 2010 from its P798.5 billion revenue goal this year or an increase of 9.6 percent.

The expected increase in the BIR’s tax take is due mainly to the expected improvement in the economy next year.

The Bureau of Customs, meanwhile, has been given a collection goal of P309.5 billion in 2010 or 13.2 percent higher than the revised revenue target of P273.3 billion this year.

Earlier, the DBCC also announced that the economy may grow anywhere from 2.6 percent to 3.6 percent in 2010, higher than the revised projected growth range for the year of 0.8 percent to 1.8 percent.