Proposed sale of government stake in Petron, Meralco opposed

A key administration legislator slammed yesterday the proposed sale of government stakes in Petron and Manila Electric Co. (Meralco).

Southern Leyte Rep. Aniceto Saludo said the reported government plan to sell its 40 percent in Petron, a major player in the oil industry, and 20 percent share in Meralco was "ill-advised since any sale will put the government in a precarious situation."

"This would be tantamount to undertaking a fire sale of the country’s few remaining crown jewels," Saludo said.

The Leyte legislator claimed Finance Secretary Jose Isidro Camacho was behind the proposal.

He added Camacho is "only good in creating a gargantuan budget deficit and aggravating the national debt."

Saludo claimed Camacho resorted to massive dollar borrowings and flotation of treasury and government bonds at high interest rates resulting in huge government debts.

The planned sale would be ill-timed, Saludo said, since the jitters over the possible war in Iraq and the recent terror bombing in Davao not only pulled down the country’s stock market but also indexes in major international bourses to record lows.

In the case of Meralco shares, Saludo said the value of the power distribution firm’s stocks depreciated following the recent Supreme Court decision ordering a refund of P28 billion to all its customers.

Instead of selling out, he said the government should have a bigger stake in Meralco because it owns more than the Lopez family had which only has 16 percent share.

"Government by virtue of its stockholdings in Meralco should seriously consider getting involved in policy making and operations to curb reported abuses and exploitation of consumers," Saludo said.

Saludo also expressed his support to the position made by Energy Secretary Vincent Perez not to sell the 40 percent stake in Petron.

He said Perez was correct in opposing the sale, not only because of poor stock market conditions, but because of the opportunity of the government having a voice in the management of Petron which can significantly mitigate opportunistic price increases. – Paolo Romero