The 2.2-hectare Mile Long property in Makati City will likely be up for grabs among three interested developers from the private sector, whose deep pockets would help fill government coffers sans new taxes during the Marcos Jr. administration, as promised by Finance Secretary Ralph G. Recto.
The Department of Finance (DOF), who's in-charge of raising funds for the annual budget, is "trying to be creative" to achieve the ambitious P100 billion in revenues being eyed from privatization activities next year, according to Finance Undersecretary Catherine L. Fong.
In the past, the Cabinet-level Development Budget Coordination Committee (DBCC) targeted only P500 million yearly from privatization proceeds.
But with no additional taxes in the pipeline — besides the revenue measures already pending in Congress since the Duterte administration, privatization would carry a bigger burden of generating money to be spent on priority public programs and projects.
In the case of the Mile Long complex, which the previous Duterte administration wrestled control from former lessee Sunvar Realty Development Corp., proposed disposition guidelines are currently being circulated before the bidding process starts, said Fong, who heads the DOF's privatization and partnerships group.
Fong spoke to Manila Bulletin on the sidelines of the book launch of former finance secretary and now Monetary Board member Benjamin E. Diokno last Sept. 24.
According to Fong, already "waiting" for the sale of Mile Long are the Ty family's GT Capital Holdings Inc.; Ayala Land Inc. of the country's oldest conglomerate that developed Makati into the country's business and commercial hub; and Sunvar Realty Development.
The DOF official noted that GT Capital has ambitious plans for Mile Long, including building the country's second Mitsukoshi mall after the first in Bonifacio Global City (BGC), as the property is next to Makati's iconic "Little Tokyo" string of Japanese restaurants and stores.
At present, the government collects millions of pesos in rental revenues from establishments doing business at Mile Long.
In 2017, the government took over management of Mile Long after it brought Sunvar to court, arguing that the company’s lease contract expired in 2002.
On top of disposing of prime lots like Mile Long, Fong disclosed that the government will now allow unsolicited projects from private proponents to develop public assets, while also studying to introduce a universal charge concept on water to boost non-tax collections.
Universal water charges
Citing that water rates in the country are among the cheapest, Fong said a universal charge would finance water infrastructure improvements even without government subsidy or funding from the national budget.
In a presentation before members of the Management Association of Philippines (MAP) last Sept. 25, DOF Undersecretary and Chief Economic Counselor Domini SD. Velasquez said the government is aggressively pursuing non-tax revenues through privatization.
In particular, Velasquez said among idle public assets to be disposed included the Mile Long building, the Star City property in Pasay City, shares of stock in Semirara Mining Corp. and United Coconut Chemicals Inc., Elorde Sports and Tourism Development Corp. facilities, as well as condominium units at Atrium in Makati.
"But, of course, timing depends on market conditions and interest, etc.," Velasquez told Manila Bulletin when asked about details.
The latest Bureau of the Treasury (BTr) data showed that from January to August 2024, the government generated P3.1 billion in privatization revenues, a jump of 3,512 percent from merely P86.2 million in the first eight months of last year.
End-August privatization proceeds already exceeded the P865.5 million for the entire 2023. This year's revenues from privatization are poised to be the highest since 2018's P15.7 billion.
BTr data showed that in the month of August alone, the DOF-attached Privatization and Management Office (PMO) contributed all of the privatization revenues amounting to P2.7 billion, the highest monthly haul since the over P14 billion in June 2018. The PMO generates revenues from sales, lease rental, interest and other income.
PCGG revenue dwindles
On the other hand, the Presidential Commission on Good Government (PCGG), which is tasked to dispose of assets related to ill-gotten wealth of dictator Ferdinand Marcos' family and cronies, has not contributed any revenue since the about P900,000 it remitted in May 2023 from the sale of a 300-square meter (sqm) property in Calapan, Oriental Mindoro.
The PCGG also sold its former office building and lot located at a prime location along EDSA for P800 million in 2022, whose proceeds were already remitted to national coffers and recorded by the BTr under an escrow account, it said last year.
Fong disclosed that the PCGG just last week submitted to her office a list of its privatization pipeline, which shall be up for approval by the interagency Privatization Council.
They were also awaiting the appointment of a new Department of Justice (DOJ) undersecretary who shall oversee public-private partnerships (PPPs), including the PGCC and its privatization program, Fong said.
Since 1990, the PCGG raised a total of about P120.5 billion from the disposition of Martial Law-era assets.
Before the Benigno Aquino III administration stepped down in 2016, the Privatization Council gave its go-ahead to sell about P658-million worth of so-called "Hawaii Jewelry" that belonged to former first lady Imelda Marcos.
Back then, the PCGG said three Marcos jewelry collections — called Hawaii, Malacañang and Roumeliotes — had been estimated by auction houses Christie's and Sotheby's to be worth a total of at least P1 billion, in 2016 prices.
The Hawaii collection is composed of about 300 jewelry pieces confiscated by the US customs bureau in the namesake American state after the Marcoses fled the country in 1986.
This collection includes a 25-carat "extremely rare" pink diamond believed to be previously owned by a Mogul emperor, which had been estimated to be valued at least $5 million. (With Chino S. Leyco)