DOF to ramp up sale of state-owned assets

Unsolicited bids seen boosting privatization goal

MANILA, Philippines — The Department of Finance (DOF) is banking on unsolicited proposals to boost its privatization goal as it estimates that roughly P20 billion is achievable for now.

Finance Undersecretary Catherine Fong said the DOF has a conservative list of assets that could yield nearly P20 billion in revenues this year. However, this is just 20 percent of the P100-billion privatization target for 2025.

Nonetheless, Fong is optimistic that the new privatization rules, which took effect yesterday, could ramp up the sale of state-owned assets.

“With the guidelines, we’re hoping that the disposal will be faster, to boost our target and create more economic activities for the idle assets,” Fong told The STAR.

“This (P20 billion) is just conservative; it does not yet include the potential revenues from unsolicited proposals,” she said.

State assets that are for disposal this year include the Food Terminal Inc., 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 which are also up for sale.

Allowing unsolicited bids is the salient point of the revised privatization rules.

It refers to a proposal made by an offeror for an asset to undertake sale through negotiation, including direct purchase from current occupants.

This is on top of public auctions, which remain the primary mode of disposition and government-to-government transactions.

“We have a lot of properties, not on the radar or not in the priority (list) to be sold, but people come to us and ask if they can buy it,” Fong said.

“There’s no way to sell directly before, and it’s a long process. That’s why it isn’t easy to sell. But people are interested in buying,” she said.

Before yesterday’s rules’ effectivity, Fong said there were buyers who already expressed interest in bidding on several assets.

Likewise, the new guidelines aim to encourage ordinary Filipinos and overseas Filipino workers to purchase government lands.

“Once we sell, there will be productive use as people will pay taxes. Unlike now that the republic owns these, the assets are tax-exempt,” Fong said.

Under the new rules, any interested party may submit an unsolicited proposal that includes the property description, price offer and payment terms, among others.

The offeror will be required to submit at least 10 percent of the asset’s market value as a form of bid security, which will form part of the payment in the asset’s purchase.

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