The Arroyo government was urged Tuesday to save state pension funds such as the Government Service Insurance System (GSIS) and the Social Security System (SSS) from any privatization effort.

Former National Economic and Development Authority (NEDA) chief Ralph Recto said Malacanang should spare the state-run pension agencies if it can’t help disposing big ticket items ahead of the May 2010 elections and before the Arroyo administration’s term exits.

“If the sale of state assets will push through despite mounting calls for a freeze order, the government should discourage offers from state-run pension funds like the GSIS and the SSS,” Recto said.

Recto, who is running for senator under the Liberal Party, said government should sell state assets lined up for auction to the private sector and not to other government agencies like the state-run pension agencies.

“The essence of privatization would be defeated if the state assets will be purchased by another agency of the government,” he said.

The ex-socio economic planning chief expressed fears that the government might be forced to turn to the state pension funds as its last minute “white knights” just to complete the long-delayed privatization before the ballots are cast on May 10, 2010.

“Let’s leave the money of pensioners out of the privatization plan. The contributions of retiring public and private workers are too important to be used for speculative buying or investment,” Recto said stressing that the government should stick to the private sector in looking for buyers.

According to Recto the GSIS has initially expressed interest in the privatization of the sprawling Food Terminal Inc. (FTI) Complex. The government was asking for P11 billion to P12 billion for the FTI prime property in Taguig City.

The GSIS has made an offer of P7 billion, which the Privatization Management Office (PMO) has promptly turned down. But the pension fund for government workers appears to have lost interest, an act Recto said should be welcomed.

Recto said he also received reports that the SSS might consider making an offer to the shares of the PNOC-EC, which the government is trying to unload for P14 billion to P15 billion.

The FTI property and PNOC-EC shares are two of the three-item package of state assets that government wants to dispose before elections for a price tag of P30 billion.

Recto said he is confident the current leadership of GSIS and SSS has enough discernment to reject knee-jerk investments for the sake of saving government from embarrassment.

Recto suggested that if the Arroyo government can’t get a good price for the state assets, it is must better “save it for the next administration and the next generation.”