GSIS, Ayala eye FTI property

DA wants P58 billion sale proceeds to shore up budget  

MANILA, Philippines — The Government Service Insurance System (GSIS) and property giant Ayala Land Inc. are interested in acquiring the Food Terminal Inc. (FTI) in Taguig for P58 billion as the Department of Finance (DOF) ramps up asset disposal to generate revenue.

In an interview with The STAR, Finance Undersecretary Catherine Fong said the DOF continues to dispose of state assets in order to hit the P100-billion privatization target for 2025.

The FTI is on the list of potential assets for sale even amid complications and resistance to the disposal of the property. The government is eyeing to sell about 24 hectares of FTI, valued at P58 billion.

“GSIS wants to buy it. GSIS is liquid and they want it for investments. They know that the value will increase further once the expressway (Skyway Stage 4) is built,” Fong said.

“Ayala also wants to buy it since they are already there,” she said.

In 2012, the government sold a huge chunk of FTI to Ayala Land for P24.3 billion. The property giant then transformed the 74-hectare FTI into an integrated mixed-use development now known as ARCA South.

GSIS and Ayala Land did not immediately respond when sought for comment.

Fong explained that there has been a long-standing policy since the administration of the late president Benigno Aquino III that FTI is supposed to be sold.

“That has not been overturned, the assets are for privatization. When (a portion of it) was sold to Ayala, FTI asked that it not be sold entirely because there are lessees. All of a sudden, they want to revive it,” Fong said.

Previously, FTI managed to transfer the title of the remaining 24-hectare property to its name without the knowledge of the Privatization Council. The title is originally under the Republic of the Philippines.

FTI now has no more food terminal in the area, with its only source of income coming from its leasing activity which, according to Fong, is not FTI’s mandate.

The DOF is awaiting directives from the Office of the President (OP).

“If the policy will be changed, OP has to say it. As far as we’re concerned, it’s meant for privatization. That has not changed,” Fong said.

“I’m supposed to sell, the national government needs the money,” she said.

However, the Department of Agriculture is pushing for the revival of FTI, specifically for cold storage and food hubs to address overproduction and minimize post-harvest losses of various farm products.

Sought for comment, Agriculture Secretary Francisco Tiu Laurel Jr. said the DA has yet to receive formal communication from the DOF about the planned privatization.

“In case that is the direction, I would like that 10 hectares be left for our storage and food hub,” Tiu Laurel told The STAR.

“Part of the proceeds should go to FTI to be used to build mega food hubs that we need for our farmers in Clark, Quezon and also in Visayas and Mindanao,” he said.

The FTI said it supports the overall development of the country but maintained that a portion of the food terminal must be given to them so they can fulfill their mandate.

FTI president and CEO Joseph Rudolph Lo said proceeds of the sale should be allocated to the DA as its annual budget remains insufficient to fulfill the vision of President Marcos. Lo maintained that the FTI could still generate proceeds that the DA needs to support local farmers if it fulfills its mandate.

“If it comes to sacrificing FTI for the DA then I fully support the direction,” Lo said.

The DOF is already ramping up efforts to privatize state assets to boost the government’s non-tax revenues.

Last year, the government raised only P4 billion out of the P40-billion target, amid poor marketing plans and bureaucratic red tape.

Apart from FTI, other government assets that are for disposition this year include the Philippine National Construction Corp., Financial Center Area, Ecology Villages, Mile Long Complex, National Housing Authority-Caloocan Property, Fil-Eastern Woods Industries Inc., Pioneer Glass Manufacturing Corp. and Mindanao Progress Corp.

Also included are the Office of the Ombudsman properties in Laguna, Baguio and Batangas, Technology Resources Corp. Al-Amanah Islamic Investment Bank of the Philippines, Sta. Clara Lumber Co. Inc. and Peninsula Development Bank.

These are on top of 28,000 real estate titles in varying sizes.

Privatization is one of the priority measures of the Marcos administration to generate revenues and widen the limited fiscal space without having to raise new taxes.