Marketing woes, red tape stall DOF’s P40 billion privatization goal

MANILA, Philippines — The Department of Finance (DOF) is having difficulties in disposing of the state’s assets, raising zero out of the P40-billion target as of the first half of the year, amid poor marketing plan and bureaucratic red tape.

In an interview with The STAR, Finance Undersecretary Catherine Fong said the DOF-attached agency Privatization and Management Office (PMO) has been slow in the process of selling state assets.

“We keep on approving assets for auction but we in the PrC (Privatization Council) are frustrated since the majority are failed biddings. PMO is really slow,” Fong said.

“The problem is how PMO advertises, they don’t have a marketing plan. Most of their lawyers have no idea how to sell anything,” she said.

PMO has around 28,000 real estate titles in varying sizes as part of the disposition plan. The government also has shares in tollways, mining and in other state and private corporations.

For 2024, the DOF is targeting to raise P40 billion from privatization.

Unfortunately, the agency has not raised a single peso out of the target for the year.

While data from the Bureau of the Treasury showed that P400 million has been earned as of end-May, Fong said this is mostly lease income and dividends or collection from sales done last year.

“We have not yet sold anything. Some awarded but not closed because funds have not been remitted yet. Some are still under negotiation,” Fong said.

The DOF official, nonetheless, noted that the government can still meet its target if the Food Terminal Inc. (FTI) in Taguig and the Philippine National Construction Corp. will be sold this year. Combined, both assets can generate more than the privatization revenue goal.

However, Fong said there have been resistance and complications to the sale of both properties.

For one, FTI managed to transfer the title of the remaining 24-hectare FTI property to its name without the knowledge of PrC. The title is originally under the Republic of the Philippines.

“They don’t have a food terminal there anymore. The only source of income is from the lease but that’s not their mandate,” Fong said.

“Right now, we’re already asking the OP (Office of the President) to intervene,” she said.

The slow process of disposal is also the reason why DOF is pushing for the new guidelines by accrediting real estate brokers to sell properties on behalf of the government, as well as the faster procurement of independent appraisals.

The new guidelines are being circulated already for comments of concerned agencies. The PrC is expected to approve such until next month.

Privatization is one of the priority measures of the Marcos administration to generate revenues and widen the limited fiscal space without having to raise new taxes.