The Bangko Sentral ng Pilipinas (BSP) has granted Land Bank of the Philippines and Development Bank of the Philippines request for more time to unload excess shares in Metro Rail Transit Corp. (MRTC) worth $300 million pending approval of a Malacañang order.

Trade Secretary and Monetary Board member Peter B. Favila has confirmed the BSP approval for the extension.

The BSP has directed the government financial institutions (GFIs) up to December to sell the MRTC unsecuritized shares.

The GFIs exceeded a BSP rule imposing a limit on how many “non-allied” shares a bank could own in a corporation when they purchased 22 percent preferred shares in MRTC to allow government to save on interest costs. The 22 percent shares were considered “non-allied” shares.

Favila, who is also the chair of the National Development Co. (NDC), said they are only waiting for Malacañang to sign the executive order to transact the buyout of the MRTC shares from DBP and Land Bank.

“The DoF (Department of Finance) has finished the paper work (and next) is the issuance of an EO,” said Favila.

DBP President Reynaldo David said they expect to unload the MRTC shares as soon as February or late in the quarter.

“It’s going to be preferred or the unsecuritized interests since the securitized interests, which are the bonds, are the important shares because bonds are investible money,” said David.

“The unsecuritized interests will be taken out by the NDC,” he added. The GFIs paid more than $900 million to buy both the 22 percent preferred MRTC shares and the 78 percent securitized shares last year.

In the meantime Favila said the EO will be released soon.

“We’re just waiting for the DoF to complete their domestic process,” he said.

Only one more certification is needed before the EO is signed which would authorize NDC to acquire the MRTC shares from the GFIs.

The government banks only need to divest the equity holdings since they have exceeded the limit imposed by the BSP and not the MRT bonds.

The plan was that NDC will float bonds to raise funds to buy MRTC shares held by the GFIs. NDC will then dispose of the shares through a re-privatization.

DoF officials said the GFIs will be able to unload the full 75 percent ownership by the middle of this year.

Land Bank and DBP took the center stage in buying out MRTC shares for a majority block.

Both banks, acting on a directive from the DoF, paid $300 to $400 million each after the National Government provided them with an exit mechanism plan.

The NDC had to be named as the exit mechanism of Land Bank and DBP as a requirement of the BSP's Monetary Board for the investment of the state owned banks in MRTC.