By LEE C. CHIPONGIAN
The Department of Finance expects proceeds from the sale of three important assets – Philippine National Bank, PNOC-Exploration Corp. and PNOCExploration Development Corp. to fatten up government coffers this year, cash flow the state badly needs to correct its fiscal problems.
DoF Undersecretary Gabriel Singson Jr. said that he will set some privatization target soon after he concludes his talks and reviews of the different government agencies with assets to sale. "We have to find out what can be sold. But I have seen the list and have a sense of what are saleable and what are not, or assets that needs more work," he said.
Singson, who is still awaiting his appointment as chairman of the bids and awards committee, said he will also review government holdings managed by the Presidential Commission on Good Government and find out what can be sold as quickly as possible. PCGG has a major block in San Miguel Corp.
‘We have to be practical and dispose only what we can sell. There are many government assets that can be sold but we have to prioritize. I think the three are doable," said Singson. He identified PNB, PNOC-EC and PNOC-EDC as top of his list for this year.
For 2005 the government will be focusing on assets up for sale, in the pipeline and ready for execution. "We are preparing PNB and the PNOC subsidiaries and to get strategic buyers."
Oil exploration firm PNOC-EC is selling 49 percent of its stake in the Malampaya natural gas field and the buyer is LG International Corp. of South Korea. PNOC-EC owns a 10 percent stake in Malampaya through a government loan amounting to $175 million. It is the largest natural gas field in the Philippines. The gas field power plants that generate a total of 2, 700 megawatts of electricity.
Another PNOC subsidiary PNOC-EDC is also up for privatization this year. The state controls 60 percent, which will be sold to private interests and 40 percent to its private investors.
In the case of PNB, the government is planning to sell its 45 percent shares when the joint sale agreement between the DoF and the Lucio Tan group expires on September 16.
Based on PNB estimates, the government could expect to get as much as
P15 billion from the sale of shares in PNB owned by the finance department and the Philippine Deposit Insurance Corp. In total this is 67 percent.
The DoF and the PDIC plans to maximize its return on the funds it invested in PNB in 2000 when the bank suffered a liquidity crisis. The government infused
P23.9 billion in the bank four years ago with PDIC and BSP funds. About P7.8 billion was exchanged into convertible preferred shares at P40 per share. The preferred shares can be converted into common stocks before the joint sale.
In the meantime the five-year deal, which will expire in September, allows the government an option to initiate a joint sale of its public stake in PNB, along with Tan’s group.
