MANILA - The Philippine National Oil Co. (PNOC) remains undecided on whether it should push through with the sale of oil and gas unit PNOC-Exploration Corp. (PNOC-EC) this year, a ranking official of the company said.

Requesting anonymity, the official disclosed that the company is still assessing the market.

"We are still studying it very carefully. It seems like prices at the market are not good," he said.

"Nothing on our side yet," he added, when asked if the sale process is moving as scheduled.

But the official admitted it is crucial that they decide on the matter soon since the Department of Finance already lined up PNOC-EC for privatization within the final quarter of the year.

Earlier, the board of PNOC-EC warned against the sale of the government's 40% stake in the company, saying it "may not be advantageous to the corporation and the government as it may lead to a fire sale." It noted that the planned privatization is untimely because stock market prices are depressed.

Initially starting out as an Exploration Department of PNOC, PNOC-EC was eventually incorporated as a subsidiary of the company in 1976. At present, it holds a 10% stake in the $4.5-billion Malampaya power project and stakes in various service contracts for oil and gas exploration.

PNOC-EC is 99.78% owned by the Philippine government through PNOC, and 0.22% owned by public shareholders.

Its planned sale is part of the government's efforts to raise funds to cover the country's swelling budget deficit, which is estimated to reach P250 billion this year.