Unfair

Sometimes the national interest is compromised unwittingly by the truly incompetent.

When the Supreme Court awarded 111,415 sequestered shares of the PTIC to the Philippine government, the Department of Finance (DOF) lost no time in putting that block of shares up for public bidding. The DOF had hoped the sale to be consummated before the end of last year to further improve on an already laudable deficit picture.

A much stronger deficit picture will, no doubt, redound to the public interest. It will help build confidence in the strength of our currency, reinforce the low interest and inflation regime we have achieved and underscore the exemplary fiscal management that brought this virtuous cycle about.

The strong currency, low inflation and low interest rate regime has induced a substantial 74% increase in foreign direct investments in our economy last year. It explains the boom now seen in our stock market. The lower cost of money makes credit more accessible and analysts are predicting a 15% increase in bank lending this year.

All that will have palpable trickle down effects on our domestic economy. More investments will create more jobs, especially in the infrastructure build-up we are looking forward to and the great multiplier effects that will bear. The stable inflation and interest rate regime has encouraged investments in housing that will finally make a large dent on the serious housing backlog we have endured for too long.

As the series of oil price rollbacks show, ordinary consumers immediately benefit from the effects of a strong peso position at this time. Everybody wins in a low inflation regime.

The early sale of the PTIC shares, combined with the sale of Maynilad and the possible privatization of several power generation assets, will ensure consolidation of our fiscal position ahead of the May elections. Inconsequential as that electoral exercise might be to the sustainability of our economic policies, elections always create uncertainty in the minds of investors. Major gains in the privatization efforts of government would help relieve some of the seasonal anxiety.

Those sequestered shares once represented a 28% stake in the telecommunications mammoth PLDT. They are now worth only 6.4%. Nevertheless, that stake is of great value, considering the profitability of the telecoms giant.

Due diligence was exercised by the DOF in setting up the bid to ensure full transparency and optimal gain for the government. When the bids were unsealed last month, it resulted in a sale worth P25.4 billion. That is much higher than expected and constitutes a major windfall for our national finances.

Last year, we posted only about half of our target deficit level. Consummation of the PTIC sale would have made the accomplishment even more astounding.

But, as it usually happens in this country, good things are not allowed to proceed as smoothly as they ought to. Often for the most trivial reasons.

As soon as the bidding was done, needless noises attributed to a senior solon began to emanate from the media. The noises spooked the potential investors in this major sale. The possible adverse consequence of those irresponsible noises induced a rare bipartisan resolution from the House of Representatives affirming the propriety of the bidding and the importance for the national interest of an early sale.

Unchecked by the solon to whom the needless noises were attributed, the destructive intrigue soon crossed the boundary into the totally absurd – making the solon appear completely clueless about government procedures.

The intrigue being peddled about the sale took a turn to the absurd when it was claimed that the potential proceeds from the sale of PTIC shares would be used by the administration for electioneering purposes. That is the reason, according to this line of irresponsible intrigue, why the sale is being conducted with some amount of urgency.

Whoever is responsible for peddling this line of intrigue is clearly ignorant of government procedures.

Proceeds from privatization efforts do not go into some slush fund that the administration may freely dispense. Such proceeds go straight to the National Treasury, expended only according to the provisions of the national budget as passed by Congress exercising its power over the purse.

The administration will, of course, derive some political benefit from such a sale – but only indirectly. The sale will help enhance our fiscal bottom line by improving revenue flows into the national treasury. That will underscore the quality of fiscal management applied by the present administration.

The DOF’s enthusiasm for getting this sale over and done with is motivated entirely by that agency’s mission to improve the fiscal bottom line by reducing our historical propensity for large budget deficits. Government gains nothing by holding on to those shares needlessly. Government could lose if it holds on to those shares and the market climate turns adverse, bringing down the price when it is eventually sold. At the moment, market conditions are excellent for government making the most from this windfall.

So uninformed was the line of intrigue being peddled about the PTIC sale that the corporate community began independent searches into the source of the needless noise. Those searches have now narrowed its scope of suspects to a media operator apparently trying to ingratiate himself with business mogul Antonio Cojuangco, whose family lost control of the PTIC shares as a consequence of judicial resolution of the case.

If the source of the needless noise is indeed the main suspect, then he has done Mr. Cojuangco an unfair act, picturing him a sore loser in a judicial process that has produced restitution in the public interest. Justice has been rendered in this case and the Republic stands to benefit from the final resolution – even as the Cojuangco family has benefited in the hundreds of millions from dividends yielded by the PTIC shares through the course of a long litigation spanning two decades.

It is now up to the solon, to whom irresponsible claims were attributed, to seek justice for himself and help clear the air to facilitate completion of this publicly beneficial sale. He might have thought he was getting a free publicity ride by allowing uninformed statements to be attributed to him.

Statesmanship now calls for a full clarification of the facts surrounding this unseemly episode.