Government eyes P7 B from sale of assets

The government will privatize several state-owned assets to help fill a projected deficit of P130 to P145 billion this year.

Finance Secretary Alberto Romulo said the Arroyo administration will proceed with the disposal of a number of state-owned assets that the Estrada administration failed to sell last year.

These include government’s stakes in tollways operator Philippine National Construction Corp. (PNCC), Manila Electric Co. (Meralco), broadcast network IBC 13, several prime properties in Moonwalk, and other real estate assets held by the Bases Conversion Development Authority, Asset Privatization Trust and the Philippine Commission on Good Government.

Romulo said government expects revenues from privatization to hit at least P7 billion, down by P12 billion from an original target of P19 billion set by the inter-agency Development and Budget Coordinating Council (DBCC) before former President Estrada was thrown out of office through people power.

Last year, the unfavorable market conditions, aggravated by the political uncertainties, botched several attempts by the Estrada administration to sell big-ticket government-owned-and-controlled corporations.

Romulo said the lack of interest could be reversed by investors’ renewed confidence in the Philippines, especially when the new government settles down and neutralizes forces threatening its stability.

The Arroyo administration has inherited a huge budget deficit of P136 billion for 2001 and which is expected to soar to P145 billion this year.

Romulo said a balanced budget could only be achieved by 2006 and the government will have to resort to borrowing to trim the deficit.

Specifically, the government is targetting to reduce the budget deficit to P74 billion by 2002, and subsequently to only P45 billion by 2003.

He said the government’s proposed P725-billion budget will prioritize funding for programs in social services, education and information technology.

Aside from privatization, the Arroyo administration will also have to implement belt-tightening measures, revenue enhancement programs, and as a last resort, borrow from financial institutions.

Romulo said earlier the government will undertake an international roadshow within the first semester to woo foreign investors and ask them to take another look at the Philippines.