NG to sell Meralco shares to raise P6 B

The National Government is expected to sell its stake in Manila Electric Co. (Meralco) next month to raise an additional P6 billion to P7 billion to help narrow down the country's budget deficit.

Government officials said the government's stake in the country's largest power utility firm was supposed to have been privatized in the first quarter this year but due to the weakening of the stock market, they decided to defer the offering at the start of next quarter.

The government has committed to trim down its budget deficit to P62.5 billion this year after overshooting its P101 billion target last year.

But officials said they still have to look if the market condition will be favorable to get the right price for its Meralco shares.

Proceeds from the sale of the government's share in Meralco will form part of the P22 billion privatization revenues pledged by the Asset Privatization Trust (APT) and the Committee on Privatization (COP).

The COP still have about 10 properties and assets to dispose of while the APT will have to dispose about 142 properties out of 405 properties/assets transferred to them.

Both the COP and APT have committed to sell all these remaining assets and properties transferred to them by the National Government and its agencies and government financial institutions before end of this year.

Congress has extended the lives of the COP and the APT up to end-December 2000 only. The terms of the two disposition agencies were supposed to have ended last December 1999.

"We are trying to dispose as many assets and properties as we can due to limited time we have," the government official said.

But, the official said they are bound by certain laws that prevent them to just dispose the assets at a loss. "We have to comply with the requirement of the Commission on Audit and everything should go through public bidding. We can just sell at a price that would be disadvantageous to the government," he said.

As of the first two months of year, the APT was able to raise about P300 million through the sale of various small government assets and properties.

Aside from the Meralco shares, other big ticket items to be disposed of include the government shares in Philippine National Construction Corp., Philippine National Bank, Food Terminal Inc., and among others.