Palace: P25 B from PLDT sale goes to infra, social projects

The P25.2 billion from the sale of the government’s shares in the country’s largest telecommunications firm, the Philippine Long Distance Telephone Co. (PLDT), would be used for infrastructure and social projects, President Arroyo said yesterday.

In a pooled interview at Malacañang, Mrs. Arroyo said the proceeds would go to the National Treasury as part of government revenues.

"I have said I will increase our (spending on) education by P16 billion, our health by P5 billion, our social services by P1 billion, our infrastructure by P100 billion. So that is where these things (PLDT proceeds) are going and I think it is about P25 billion so it contributes to those increases plus the P1,000 a month increase of the government employee’s allowance," she said.

Budget Secretary Rolando Andaya Jr. said the government has increased its national budget for the year by P200 billion, or to P1.126 trillion. Mrs. Arroyo is expected to sign the 2007 budget within the next three weeks.

The increase in the national budget includes P28 billion for the Department of Public Works and Highways and P13 billion for the Department of Education, Andaya said.

Finance Secretary Margarito Teves on Wednesday received a P25.2-billion check from First Pacific Co. Ltd. of Hong Kong, the buyer for the government’s 6.4 percent holdings in PLDT.

Teves said Metro Pacific was the vehicle used by First Pacific to match the bid of Singapore’s Parallax Venture Fund for the government’s 46 percent stake in Philippine Telecommunications Investment Corp. (PTIC), which owns 13.8 percent of PLDT.

The sale effectively raised First Pacific’s stake in PLDT to 29 percent from 23 percent. First Pacific already owned 54 percent of PTIC before acquiring the balance of 46 percent from the government.

PLDT chairman and First Pacific managing director Manuel Pangilinan said the company used internal resources and third party financing for its bid.

He described the transaction as a good investment and "a long-term investment for the company."

Mrs. Arroyo said the government would continue pushing for the privatization of its assets to generate more revenues.

"Our thrust is let’s sell our shares. The government should not be in business. So the economic managers have set a very ambitious target for a balanced budget but that includes privatization so they really have to be very aggressive about privatization," she said.

The President said the sale of government assets would boost its efforts to wipe out the deficit by next year.

Last month, the government failed for the third time in its bid to sell the 25-year concession of the National Transmission Corp. (Transco) as only one bidder showed up, prompting Mrs. Arroyo to order a review of the bidding procedures.

The transaction was supposed to generate $3 billion for the government. Malacañang earlier decided to hold another bidding despite strong calls by some Cabinet officials and lone bidder Citadel Holdings Inc.-Terna SpA, a Filipino-Italian consortium, to enter into a negotiated sale.