Press Release
November 6, 2009

ARROYO WARNED AGAINST MIDNIGHT SALE OF GOVERNMENT ASSETS

Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) today advised the Arroyo government against engaging in any "midnight sale" of government assets during the remaining months of its term designed more to fatten the pockets of unscrupulous bureaucrats than to replenish and stabilize the public treasury.

"To make up for its deficiency in tax collections, the Arroyo administration has been selling all kinds of assets, from its shareholdings in Petron and Meralco to military camps or reservations apparently without due regard to the strategic importance of maintaining government stake in these corporate enterprises" the opposition lawmaker said.

"Out of prudence, the Arroyo government should desist from selling more state assets to allay the apprehensions that such business deals are part of the fund-raising campaign for administration candidates in the 2010 elections."

Pimentel asked the Palace why the government-owned prime property in the Fujimi district in Tokyo, which houses the residence of the Philippine ambassador to Japan , is still listed in the government assets to be privatized despite a Malacañang denial that the deal has been shelved.

The government plans to enter into an agreement with a private real estate firm to build a commercial multi-storey building on the Fujimi property, which was acquired by the government in 1943 through the efforts of then President Jose Laurel, Sr. According to the Department of Finance, the real estate deal could earn P3 billion for the government coffers.

Pimentel noted that Philippine Ambassadors Association is against the demolition of the building and the conversion plan since it is officially recognized as a protected national cultural heritage.

He said it is unfortunate that the sprawling complex of the National Center for Mental Health and the Welfareville or Boys Town in Mandaluyong City, the premises of the National Penitentiary in Muntinlupa City the home for the aged in Quezon City and the Philippine Postal Corporation are being sold by the government in complete disregard of their importance in providing vital social government services.

The government has started the auction of the 103-hectare complex of the Food Terminal Inc. in Taguig City which is expected to generate about P14 billion, the remaining government stake in Petron, its shareholding in the San Miguel Corporation and the and 14 percent government's shares in the PNOC Energy Exploration Corp.

Last year, the government raised P90.6 billion from privatization of state assets - reportedly the highest ever recorded income for such transactions. The biggest asset sold was the National Transmission Corp. The government aims to generate about P80 billion from privatization this year, including the sale of power plants of the National Power Corp.

Pimentel lamented that the government, instead of taking more aggressive measures to raise tax revenues and go after tax evaders, has chosen to dispose of state assets to meet expenditures and narrow down the budget deficit.

"Earnings from the sale of assets are being used to window-dress the government's financial condition," he said.

Pimentel noted that the privatization thrust is contrary to the advice of multilateral agencies such as the World Bank and the International Monetary Fund for the government to strengthen and focus on tax collection.

He said that the proceeds of asset privatization have oftentimes been misused and not spent on the purposes for which they intended. For instance, he said the privatization of Fort Bonifacio in Makati and Taguig, as well as other military camps and reservations, was primarily intended to fund the modernization of the Armed Forces of the Philippines .

However, the AFP remains badly ill-equipped because funds intended for the modernization program have been diverted to other projects and activities which are outside the purposes specified by law.

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