Government likely to miss P30-billion privatization target this year

MANILA, Philippines – The government is likely to miss its P30-billion revenue target from privatization this year because of poor investor appetite, a state-run think-tank said yesterday.

In a briefing paper on the country’s fiscal situation submitted to the Department of Finance, the Congressional Planning and Budget Department (CPBD) said the government has not even reached half of its privatization goal this year.

“The CPBD doubts the realization of P30 billion privatization proceeds in 2009 due to poor investor appetite,” the think-tank said in its briefing paper.

On Wednesday, the government failed to sell for the third-time the 103-hectare Food Terminals Inc. (FTI) property in Taguig after property developers snubbed the public bidding. The FTI was the first big-ticket item put on sale by the government this year.

Four property firms including major players such as the Ayala Land Inc. and Robinson’s Land Corp. earlier expressed interest in vying for the FTI property but during the actual bidding, nobody made an offer for the agricultural-industrial lot, which had a floor price of P13 billion.

Representatives from Ayala Land showed up during the bidding held at the government Privatization Management Office in Makati but they did not submit a bid.

FTI is a 120-hectare agro-industrial commercial estate in Taguig. It was originally built to be a food processing and consolidation center for agricultural products. It houses more than 300 small-to-medium scale companies engaged in different industries such as manufacturing, garments and electronics.

Of the 120-hectare property, the government is selling 103 hectares because the remaining 17 hectares are owned by the National Food Authority (NFA).

The Department of Finance (DOF) department has generated only P786 million from the sale of state-owned assets as of August, way below the target of P30 billion.

The sold assets are mostly small real estate properties accumulated by the government through the years.

Following the failed bidding for the FTI property, the government is scheduled to bid out next its real estate property in Fujimi Cho, Chiyoda Ku, Japan on Nov. 11.

The property would be leased out for 50 years but the government will require bidders to pay upfront cash upon award of the contract.

Nine firms earlier submitted prequalification documents for the lease and development contract of the 4,361-square meter Fujimi property worth at least P3 billion. –Iris C. Gonzales (The Philippine Star)