FTI sale to boost agri-agra sector - DOJ

In an opinion dated Sept. 6, 2011, Justice Secretary Leila M. de Lima informed Agriculture Secretary Proceso J. Alcala of their interpretation of the legal provision governing the distribution of the FTI’s proceeds.

According to the DOJ chief, for the initial distribution, at least 50 percent of the net proceeds from the privatization of FTI’s real properties should be remitted to the National Government, while the balance of the net proceeds should be retained by the FTI.

Net proceeds, as defined, means gross proceeds less related liabilities and selling expenses.

For the National Government’s portion of the FTI proceeds, the DOJ said that 60 percent would go to the Agrarian Reform Fund, while the remaining 40 percent would go to the account that serves as the Department of Agriculture’s source of fund.

Alcala had sought the DOJ’s opinion on the distribution of the FTI proceeds since the DA needs to source funding for the construction of an Agri-Pinoy Trading Center on a portion of the FTI property.

The government, through the Privatization Management Office (PMO) of the Department of Finance, is privatizing 103 hectares of the FTI property.

However, the DA wants to retain at least 34 hectares to build an Agri-Pinoy Trading Center where farmers, livestock producers and fisherfolk can bring their produce.

The FTI is under the National Food Authority which, in turn, is an agency attached to the DA.

The FTI’s privatization was mandated during the term of former President Corazon Aquino. Because it had been earmarked for privatization, no additional funds were allocated for its operation which was originally envisioned in 1986 as a Greater Manila Terminal Food Market.

Thus, since 1986, except for a very small portion, the FTI has basically acted as “landlord” leasing out a 24-hectare portion of the property to 10 firms.