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December 15, 2008

Philippines to raise privatisation target for 2009
The Philippine government has raised its programmed privatization revenues for next year after the sale of Philippine National Oil Co.-Exploration Corp. (PNOC-EC) was postponed, the Manila Times quoted the Department of Finance as saying.

Finance Secretary Margarito Teves said the country expects to generate 20 billion peso from non-tax revenues next year, or higher than the earlier program of only 15 billion peso.

The Finance department programmed P30 billion peso in revenues from privatisation this year.

The government has lined-up the PNOC-EC and the 120-hectare Taguig City property of Food Terminal Inc. (FTI) for disposal next year.

The government likewise plans to lease out its property in Fujimi Cho, Chiyoda Ku, in Tokyo next year. It was supposed to be let out this year, but poor market conditions and some procedural concerns over the lease of the 4,360-square meter land delayed the plan.

The Fujimi property is the official residence of the Philippine ambassador.

Of the three state assets, Teves said the country expects to raise 10 billion peso from the sale of FTI, which is lower than the earlier assumption of 15 billion peso.

State-run Government Service Insurance System (GSIS) had expressed interest in FTI, offering 7 billion peso. Teves did not provide any valuation for the Fujimi property and PNOC-EC.

“Well it’s conservatively put at P10 billion for FTI. But we don’t know. Those numbers can change. I guess it’s best to be conservative about it,” he told reporters.

The sale and lease of some government’s assets are part of its efforts to improve the country’s fiscal position and boost its coffers.

Amid volatile financial markets this year the government pushed back its plan to sell the state’s stake in PNOC-EC.

“We’ll get a financial advisor. There was a financial advisor that they had but conditions had changed and you know we will have to take a look again by the time we propose to sell it. October this year might be different from March next year,” Teves said referring to the exploration firm’s sale.

In January, the government raised 8.9 billion peso from the sale of shares in Manila Electric Co. to GSIS, which later sold the same to San Miguel Corp.

Earlier this month, the government ended its 35-year oil refining business, after a British firm agreed to buy out the state’s remaining stake in Petron Corp.

Ashmore Group has agreed to buy the state’s 40-percent interest, equivalent to 3.75 billion shares, for 25.7 billion peso at 6.86 peso per share.

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