During the board deliberation, Reynaldo David, president of PNOC financial adviser Development Bank of the Philippines, noted that the government would rather use the money for other purposes and that there is no time to assign the right to another entity.

The approval of the sale to Ashmore triggers a mandatory tender offer by Ashmore for the 20 percent of Petron held by the public as well as the 40 percent held by PNOC at the same terms which is roughly P6.23 per share.

PNOC president Antonio Cailao noted though that since there is a superior offer from JG Summit Holdings at P6.55 per share, PNOC will not likely sell through the tender offer. He noted though that the government has not decided to sell its remaining stake in Petron.

Energy Secretary and PNOC chairman Angelo Reyes said the government carried out a very extensive review of its options under its 1994 shareholders’ agreement with Saudi Aramco and the process involved consultations with the Departments of Justice, Finance, Budget and Management and Foreign Affairs as well as the National Economic Development Authority.

The options available to PNOC included the exercise of right of first offer, assignment of the right to an eligible third party, or accept Ashmore as an eligible third party.

"After carefully considering all options, we based our decision on a number of factors, including the fact that a purchase of these shares by the government runs contrary to our policy of privatizing government stakes in corporations and letting the private sector run commercial enterprises as effectively and efficiently as possible," Reyes said.

Reyes also noted that buying Saudi Aramco’s shares would have cost the government $ 825 million since it will have to shell out an extra $ 275 million for the mandatory tender offer on top of the $ 550 million purchase cost.

He said this comes at a time "when the government has many other priorities including the further development of our agriculture sector to support food security and investment in modern infrastructure to ensure the competitiveness of our economy."

The government also determined that assigning its rights to a third party could not be done within the 60 day period because of the need for an open bid process that would require more than 60 days to carry out.

Companies interested in acquiring the stake included JG Summit, the Gaisanos of Cebu and Thailand’s PTT through Morgan Stanley.

"At the end of the review process, we felt that, with the commitment by Aramco Overseas Company to maintain the crude oil supply agreement that is part of this transaction, the transfer of its shares to an investor that has interest in the oil and gas sector in other parts of the world and who has shown an investment commitment to the Philippines and one that has already had significant shareholdings in our country was for the country’s best interest," said Reyes.

He added that "Ashmore can make a significant contribution in terms of capital, market access and experience to Petron’s further development as a world-class energy company."