CEBU, Philippines - Cebu 1st District Rep. Eduardo Gullas yesterday said the administration may be forced to unload some prized government assets at a huge discount in order to shore up revenues and bridge the massive budget deficit this year.
Gullas, in a press release, cited the case of the state-owned Food Terminal Inc. (FTI) complex in Taguig City, which may be sold for only P10 billion, or one-third less than the government's original asking price of P15 billion.
"It is really difficult to seek higher prices when there is intense pressure to sell and liquidate - when one is desperate to raise money, particularly to repay current debt obligations," Gullas said.
The government is expected to incur a P293-billion budget deficit this year. This is on top of the P298.5-billion deficit it incurred in 2009, and the P68.1 billion in 2008.
The budget deficit refers to the gap between government spending and income.
Analysts have blamed the deficits on widespread corruption, unchecked tax evasion, the sluggish economy and the passage of so-called revenue-eroding measures.
“The next administration should regard asset disposal as a means of last resort in raising additional revenue,” Gullas said, adding that the government should focus on improving tax revenue collection, instead of relying on asset sales, which do not provide recurring income, but mere one-time extraordinary gains.
Apart from the FTI complex and the Fujimi estate, government also plans to raise at least P14 billion from the sale of the state-owned PNOC Exploration Corp.'s 10 percent participating interest in the lucrative Malampaya natural gas production project.
Government also plans to raise another P15 billion by selling its 60 percent equity in PNOC Exploration Corp. (FREEMAN NEWS)