Privatization revenues forecast to drop sharply

MANILA, Philippines—State revenues from the privatization of real estate and mining assets are expected to slow down sharply in the second half of President Aquino’s term with legal and operational issues keeping the government from unloading larger properties.

The government expects to raise at least P6 billion from the sale of nine real estate and mining properties by 2016. This pales in comparison to the P24.33-billion windfall the government received from the successful privatization of the 120-hectare Food Terminals Inc. (FTI) property in Taguig City.

“The FTI sale should have been enough to cover our privatization revenues for the next 12 years. But we can’t have that. We have to support the government’s revenue efforts,” Finance Undersecretary Jose Emmanuel Reverente said.

“Hopefully by the end of [Aquino’s] term, we want to privatize nine land and mining assets,” he said.

He said the DOF, working with the Privatization Management Office (PMO), was trying to find the fair value of these assets, most of which were seized by government banks from delinquent borrowers.

“Most of these assets still have their transferred values,” he said, referring to the value of the loans that these assets were used to pay for under “dacion en pago” deals between banks and their borrowers.

Reverente said the DOF hoped to finish finding the real value of the said assets, which he declined to identify to avoid the public from speculative investments around the properties, before the end of the year.

He said the DOF was also working with the Armed Forces of the Philippines (AFP) and the Bases Conversion and Development Authority (BCDA) for the possible privatization of military camps inside and near Metro Manila. Reverente declined to give details of the discussions.—Paolo G. Montecillo