Gov't says Gokongwei bid for Petron too low
40% stake seen to fetch more
By Michelle Remo
Philippine Daily Inquirer
First Posted 01:32:00 07/07/2008
MANILA, Philippines--The government finds the P24.6-billion offer made by the Gokongweis for the state's 40-percent stake in Petron Corp. not good enough.
Finance Secretary Margarito Teves said the government believed its stake in the oil giant, the value of which could have risen sharply over the past months due to rising oil prices, was worth much more than P24.6 billion.
"It should be better than what was obtained or paid by Ashmore to Saudi Aramco, and should be better than the Gokongwei's offer," Teves told reporters when asked about the government's estimate on the value of its Petron stake.
The finance chief said, however, that the government has yet to come up with an exact figure of its valuation of the asset. The government has yet to decide which should be its financial adviser on the plan to privatize the 40-percent stake in the oil firm.
Teves said the government was looking at tapping the state-owned Development Bank of the Philippines as financial adviser. DBP has had several experiences in providing financial advisory services on asset sale, he said.
Earlier, Saudi Aramco sold its own 40-percent stake in Petron to the Ashmore Group for $550 million (or P24.2 billion at an exchange rate of P44 to $1). But oil prices have soared in the past few weeks and are likely to sustain the rising trend in the short term.
Finance undersecretary Crisanta Legaspi said the increase in oil prices gave a higher value to the government's stake in Petron. She said increases in oil prices should be taken into account when determining the value of Petron.
The government is hard-pressed to generate more revenues than originally targeted for the year because of increasing expenditure requirements. The government said it needed to fund more social services, such as the granting of electricity, health and education subsidies to poor families so they can cope with rising prices of food.
Teves said the government was considering to sell its Petron shares within the year to help beef up its revenues.
The government originally targeted to raise P1.24 trillion in revenues this year to fund the same amount of expenditures and therefore post a balanced budget.
But finance officials recently decided to spend more this year to help keep the economy afloat amid rising oil and food prices and a global slowdown.
In effect, the government has moved the goal of balancing the budget from this year to 2010.
The government is now expecting to post a maximum P75-billion budget deficit this year. But Teves said the government still preferred working harder on tax collection to post the smallest possible shortfall this year.
The government was initially targeting to raise P30 billion from privatization this year. Included in the original list of state assets to be sold were the shares in Manila Electric Co. (already sold early this year for close to P9 billion), the 100-hectare property of Food Terminals Inc. in Taguig City, and some properties in Tokyo, Japan, including the one housing the official residence of the ambassador.
But the government decided to include Petron in the list of assets for privatization following the decision to spend more on social services.
|
