Solons warns of ‘midnight deals’ on privatization of government assets

by Kobakila News

MANILA (June 21) — Sen. Manuel Villar Jr, through his Nacionalista Party, has urged the Department of Finance (DOF) to suspend any eleventh-hour plans to privatrize residual government assets, saying these are better left the next administration to act on.

“Our sense is, it would be better for government asset privatization managers to avoid potentially controversial last-minute disposals,” said NP spokesperson and former Cavite Rep. Gilbert Remulla.

He said the public might perceive any last-ditch asset sales as suspect, with certain vested interests or parties trying to “railroad” transactions ahead of the change in administration.

Remulla was reacting to the DOF’s plan to sell the state’s equity in two corporations by September 30, in a bid to raise an extra P21 billion.

Up for auction are the government’s P11-billion, 40-percent stake in the Philippine National Oil Co.’s Exploration Corp. and the P10-billion property of the Food Terminal Inc. in Taguig City.

“In principle, we have nothing against the disposals, except for the timing. The government was able to wait for years to get rid of these leftover assets. Surely it can wait a few more months,” Remulla said.

“Besides, owing to the global economic meltdown, conditions are not that sound, with asset values still generally down,” he added.

Remulla said the local stock market and other asset values are expected to gain once a new administration comes in.

He cited the recently concluded elections in India, which set off a new bull run in that country’s stock market.

The Philippine government faces a P400-billion budget deficit this year, according to Citigroup Inc. The Development Bank of Singapore expects the Philippine government to incur a revenue-spending gap of at least P339 billion.

Amid the global economic downturn that has caused the collapse of the country’s export markets and dampened domestic household and business spending, the government has been splurging while collecting fewer tax revenues.

Last year, the government sold assets worth a total of P31.3 billion, including shares of stock in Manila Electric Co. and Petron Corp. The amount was lower than the P92-billion worth of government assets sold in 2007.

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