MANILA - Despite poor market conditions, the Finance Department said Wednesday it will push for the sale of government's stakes in two big ticket items to help plug the widening budget deficit.

More than P20 billion are expected from the sale of the following state-owned assets:

• Estimated P11 billion from the 40 percent stake in PNOC-Exploration Corp (EC), an upstream oil and gas subsidiary of the state-owned PNOC. The listed company has interests in nine service contracts and a 10-percent stake in the $4.5-billion Malampaya deep water gas-to-power project off Palawan. It also owns coal operating contracts in Zamboanga Sibugay, Isabela, and Surigao del Sur, and operates coal terminals in Zamboanga Sibugay, Cebu , Batangas, and Navotas.
• Estimated P10 billion from the stake in Food Terminal Inc., which has a sprawling property south of Manila.

Their sale is expected to proceed in September or October this year.

In an interview with reporters, Finance secretary Margarito Teves said that several sectors that have opposed the privatization of these assets should consider the "bigger picture."

This year, because of the poor tax take by the Bureau of the Internal Revenue and the Bureau of Customs, the country is facing a budget deficit of P250 billion, or 2.5 percent of the gross domestic product, as the impact of the global economic crisis continues to take its toll on the local economy. Various multilateral and other external groups have projected a deficit higher than the official target. The most pessimistic was P400 billion.

The ability of the government to meet its deficit target impacts the country's fiscal risk and rating.

“Decisions will have to be made collectively. The Cabinet and the President has made decision that depending on the prudence and market condition we will go ahead with the planned sale,” the finance chief stressed.
 
In an earlier disclosure, PNOC-EC informed the Philippine Stock Exchange that it was opposing the planned sale of the government’s 40 percent stake in the company due to depressed stock market prices.
 
PNOC-EC compliance officer Jose Eijansantos told the PSE that any “forced privatization may not be advantageous to the corporation and the government.”
 
“As far as PNOC-EC is concerned, its privatization at this time is untimely due to depressed stock market prices,” Eijansantos stated in the disclosure.
 
Diversified conglomerate San Miguel Corp. has expressed interest in the government’s stake in PNOC-EC.