Home Top News Government eyes sale of assets to GSIS, SSS

Government eyes sale of assets to GSIS, SSS

by
0 comment
DOF.GOV.PH

THE FINANCE department is aiming to raise around P100 billion from the sale of government assets, mainly to the Government Service Insurance System (GSIS) and the Social Security System (SSS).

“We need to privatize a lot but we’re going to sell them most likely to GSIS. We’re offering them to GSIS and SSS so it’s government to government transactions,” Finance Undersecretary Catherine L. Fong told BusinessWorld on the sidelines of the Asia Pacific Loan Market Association Loan Market Conference on May 9.

The Department of Finance (DoF) is hoping to close a deal with GSIS before midyear to help reach the P100-million target.

Ms. Fong said the amount raised so far this year from sales and dividend income were “not substantial yet.”

“Well, there’s the NAIA (Ninoy Aquino International Airport) upfront payment which will be released. It’s currently in escrow, so it will be released around September,” she said.

A consortium led by San Miguel Corp. won the P170.6-billion project to rehabilitate the NAIA. The group paid P30 billion upfront when the contract was signed in March.

Ms. Fong said GSIS is “very liquid” and could maximize the value of the assets.

“I mean, we could bid the assets out. Some assets are very lucrative, but it takes time just to procure an appraisal. I’m sure the private sector will be interested… but since we’re kind of in a hurry, it will likely be sold to the GSIS,” she said.

Meanwhile, Ms. Fong said the Philippine Amusement and Gaming Corp. (PAGCOR) is still planning to sell its casinos.

“PAGCOR thinks that they need a charter amendment to allow them to sell the casinos. According to them, they’re still willing to sell it so I’ve already followed up with [PAGCOR Chairman and Chief Executive Officer Alejandro H. Tengco], but he says their charter is currently, I think, in Congress for PAGCOR’s extension of life,” she said.

The DoF’s Privatization and Management Office is working with PAGCOR on its plan to privatize the 45 casinos that it operates by 2025.

PAGCOR is transitioning to become a purely regulatory agency from its current dual role as a regulator and operator.

Finance Secretary Ralph G. Recto also said earlier this month the DoF was exploring ways to raise more revenue without imposing new taxes.

Mr. Recto said the DoF was looking to sell the government’s stake in the Subic-Clark-Tarlac Expressway to state pension funds to boost revenues.

“This is an innovative way to sell especially profitable assets of the government that would also benefit the pension funds, using surplus funds, while allowing the National Government to have one-time proceeds to help narrow the budget deficit and also reduce the need to borrow and curb the increment of the NG outstanding debt,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The government aims to borrow P2.57 trillion from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message that it would be more ideal to improve tax collection and efficiency as it would translate to higher recurring income.

“Selling government assets only results in one-time gains and will never occur again. So, if the government can efficiently use the asset and give substantial returns, (enough to cover cost and a little income return of 5-10%) that is good,” he said. — Aaron Michael C. Sy 

Related Posts

Leave a Comment