Banker Sevilla appointed Finance usec

MANILA, Philippines – The Aquino administration has appointed investment banker John Philip Sevilla as Finance undersecretary for Privatization and the Corporate Affairs Group, Finance Secretary Cesar Purisima said yesterday.

Sevilla, who took his oath of office on Wednesday, will take over the portfolio handled by Crisanta Legaspi.

Sevilla will be handling the difficult task of selling state-owned assets to help raise revenues for the government.

For the remaining part of the year, the Aquino administration hopes to raise P2 billion from the privatization of state-owned assets, comprising of real estate assets and two big-ticket items, the Food Terminal Inc. (FTI) property in Taguig and its real estate property in Fujimi, Japan.

The government hopes to sell the FTI property this year for at least P7 billion and raise roughly P3 billion from the lease and development contract of its real estate property in Fujimi.

Purisima said the P2-billion estimated proceeds from privatization do not include the planned sale of the government’s stake in the Malampaya deep water-to-gas project.

Sources said the government is waiting for better market conditions before

selling its stake in the Malampaya project.

The Arroyo administration had attempted to sell the Philippine National Oil Co.-Exploration Corp.’s (PNOC-EC) 10-percent stake in Service Contract 38 for at least P17 billion as part of its privatization program but critics from the Energy sector dubbed this as a “midnight transaction.”

Service Contract 38 covers the right to explore, develop and utilize Malampaya gas off the province of Palawan. PNOC-EC, Shell Philippines Exploration B.V. (SPEX) and Chevron Malampaya LLC are partners in the exploration and development of this service contract.

Essentially, the sale of its stake in Service Contract 38 means that the government is selling its much-coveted stake in the Malampaya project, considered a crown jewel in the energy sector.

The government is selling state assets to plug a widening budget gap that is projected to hit P325 billion this year, revised from an earlier target of roughly P300 billion.

Sevilla is not new to the Finance department.

In 2006, he was also appointed as Finance Undersecretary for Privatization.

Prior to his stint at the DOF, Sevilla worked for four years as an investment banker for financial services firm Goldman Sachs.

This developed as the Aquino administration also appointed former Philippine National Bank president and Negros Occidental Governor Daniel ‘Bitay’ Lacson as chairman of the Government Service Insurance System, the state-owned pension fund for government workers.