PTIC sale to pump prime economy

Like a housekeeper looking for money to go into the kitty, the government is finding ways and means to pump prime the economy, and the sale of its P25-billion stake in the Philippine Telecommunication Investment Corporation (PTIC), representing 7 percent of Philippine Long Distance Telephone Company (PLDT) will enable it to maintain a lower budget deficit this year and balance the budget two years from now. The balanced budget mirrors a robust economy, fiscal discipline on the part of government, and translates to lesser foreign borrowings.

We are told that the sale would be in keeping with the government thrust to limit its investment exposure to the private sector as businesses are known to thrive better with the least intervention from government.

The P25 billion represents the sequestered shares of Prime Holdings Inc., which had been acquired illegally during the Marcos years. After the Sandiganbayan ordered the PTIC to turn over the sequestered shares to the government, the Department of Finance wanted to close the sale in the first quarter of the year. Contrary to some claims, the department observed full transparency throughout the bidding process. It published an invitation to bid on Nov. 13, 2006 in three newspapers, and republished the invitation 15 more times in seven newspapers between November 13 and 24.

As the terms of reference which set the detailed rules for the bidding process are made available to all interested parties free of charge, with 11 individuals or institutions asking for and receiving copies of the TOR. It must be noted that the government’s PTIC shares were offered as one block, rather than several blocks.

So how come that only two bidders came forward to submit bids? Simple. Because not many entities, local or foreign, have the financial clout to acquire P25 billion of shares.

Our source says the fact that First Pacific, the other major shareholder of PTIC had publicly expressed its intention to exercise its right to match whatever offer for the government’s stake, must have also caused other interested parties not to join the bidding.

To facilitate sale, the government priced its PTIC shares at a 15 percent discount vis-à-vis the average trading price of PLDT shares during the 10 heaviest trading days for PLDT shares between November 13 and December 4. The 15 percent discount had been recommended by the Development Bank of the Philippines (DBP). DBP said the discount had to be offered as the PTIC shares are illiquid and non-listed shares, unlike PLDT shares, which are easily traded in the stock market and whose price is easily determined.

DOF and DBP also cited the standard operating procedure of giving discounts such as in the large block sales of Metrobank, Universal Robina and Megaworld. PTIC being a holding company, its shares, according to the two institutions, have to be discounted to their underlying net asset value, which in the Asia-Pacific averages a whopping 22 percent. The 15 percent discount is way below the going on discounting rate in the region.

Singapore-based Parallax Venture Fund submitted the highest bid of P25.4 billion for the PTIC shares. The only other bidder, Pan Asia Presidio Capital, matched the floor price.

Sen. Juan Ponce Enrile backed the government’s move to sell its 46 percent stake in PTIC. He said, "If the finance department has determined the proper selling price and has undertaken the requisite bidding process, then by all means the government should not dilly dally in completing the sale."

He added, "It is not every day that the government gets a chance to pump prime the economy using non-tax revenues. We cannot afford to turn off investors with intramurals as long as the sale is above board."

Enrile said if the P25.4 billion sale is completed, the government expects its non-tax revenues in 2007 to shoot up to P103.8 billion from the earlier projection of P90.7 billion. The sale would eclipse many times over the government’s overly conservative P500-million target from the proceeds of its privatization activities.

Happy about the formal turnover of the certificate of 111,415 PTIC shares are members of the Presidential Commission on Good Government, led by Chair Camilo Sabio, and Commissioners Justice Narcisco Nario, Nicasio Conti, Tereso Javier, and Rick Abcede.

Commissioner Abcede told the Bulong Pulungan sa Philippine Plaza Hotel that the acquisition of the shares was "a major legal victory . . . achieved by the present PCGG under the Arroyo administration – after a long and arduous court battle, from the Sandiganbayan to the Court of Appeals to the Supreme Court."

Abcede said, "We will turn this major legal victory into a victory for the Filipino people by disposing these shares together with the Department of Finance at the highest price possible, with the proceeds to be used by our government for the benefit of our people, especially the poor."

Abcede also said at the Tuesday media forum that from 1986 to May 2006, PCGG has remitted a total of more than P61 billion to the National Treasury as follows: Under President Cory Aquino, P3.8 billion; under President Fidel V. Ramos, P20.8 billion; under President Joseph Estrada, P1 billion, and under President Arroyo, P35 billion, which is around 60 percent of total remittances, and which does not yet include the proceeds and escrowed dividends from the PLDT shares and additional remittances of PCGG to the national government.

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As Nandy Pacheco of Ang Kapatiran, a national political party with common good as its ideology has warned us time and again, elections dominated by traditional unprincipled politicians can be dirty, with candidates resorting to tricks so they eliminate potential aspirants from the race and they themselves get elected. One such trick is filing of charges – most of them false – against political candidates. (More on Ang Kapatiran in a subsequent column.)

Dr. Virginia Animas, municipal mayor of Sapang Dalaga, Misamis Occidental, reminds us that in the past election years, she and her family and other relatives aspiring for elective positions, were charged with fabricated and non-bailable cases by their opponents which were timed and filed with addresses other than the true addresses to prevent them from running. Mayor Animas fears that her political enemies will again fabricate charges against her and certain candidates affiliated to her by blood or by party affiliation. Which is why she is requesting publication of Justice Secretary Raul M. Gonzalez’s letter dated May 30, 2005, to all regional state prosecutors, state prosecutors, provincial prosecutors, city prosecutors and their assistants to study the addresses possibly filed by litigants against the mayor, Vice-Mayor Anabelle Suminguit, former Mayor Manuel Animas, Clerk of Court Darryl Montealto, Danilo Lusterio, former Municipal Secretary Alfonso D’Lonsod IV, Rene Apostol, former Vice Mayor Donjie Animas, former Mayor Joel Maniwan, Alfonso D’Lonsod III, and Josie Bayawa (PNB personnel). Secretary Gonzalez’ letter emphasizes that if addresses are not correct, the cases should be brought to the attention of the DOJ for investigation, and if found correct, forwarded to the DOJ for the requisite preliminary investigation.

I hope the above victims of fabricated charges will not experience the same persecution they suffered in the last elections.

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