Despite modest privatization earnings in January, the government remains confident that revenues from asset sales will exceed ₱40 billion this year, keeping it on track to meet its ambitious ₱101 billion full-year target.
“Let’s see” was Finance Secretary Ralph G. Recto’s reply when asked on Wednesday, March 19, if the privatization revenue goal for 2025 is achievable.
On the sidelines of the Philippine Stock Exchange’s (PSE) inaugural InvestPH conference, Recto told reporters that the upcoming asset sale of the 796-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant in Laguna is poised to be the “biggest” disposition activity for the year.
In February, the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) canceled the independent power producer administrator (IPPA) privatization for CBK, as it changed the disposition mode into a direct asset sale due to the expiring IPP contract early next year.
Last year, Recto said that CBK’s privatization would generate between ₱50 billion and ₱100 billion.
Also in the pipeline of big-ticket government assets for disposition this year are the 2.2-hectare (ha) Mile Long property in Makati City, and the remaining 46-ha property of Food Terminal Inc. (FTI) in Taguig City, Recto confirmed.
In the case of FTI, the Finance chief said that “we’re talking about it.”
Finance Undersecretary Catherine L. Fong, who heads the Department of Finance’s (DOF) privatization and partnerships group, said in September last year that the Department of Agriculture (DA) is expected to oppose the privatization of FTI’s remaining tract of land.
In 2012, the government raised ₱24.3 billion by selling 74 ha of FTI to Ayala Land Inc. (ALI), which developed the property into its mixed-use Arca South estate.
The latest data showed that nearly ₱19 million was raised from privatization in January 2025, according to the Privatization Management Office (PMO), an attached agency of the DOF.
This corrects the Bureau of the Treasury (BTr) data, which reported zero. However, this still starkly contrasts with the ₱187 million recorded in January 2024.
Majority or over 83 percent of these earnings came from lease rentals which had amassed a total of ₱15.5 million. ₱2.3 million was earned from asset sales, ₱24,000 from interest income, and ₱835,000 from other privatization-related revenues.
Fong told Manila Bulletin on Wednesday, March 19, that the government’s privatization revenues will now surge beyond last year’s unmet target of ₱42.1 billion.
“We are already discussing offers with interested parties,” Fong said.
Last year, the government grew its revenues from privatization activities to ₱3.3 billion. It surged nearly three times the 2023 privatization earnings of ₱865.5 million, but it was nowhere near the 2024 full-year target.
Fong noted that the January 2025 figure was “not totally zero” from the PMO, adding that this was due to the lag in the BTr’s data system.
Likewise, the Metropolitan Manila Development Authority (MMDA) repaid its loans in January 2024, which is why last year’s record was significantly higher, Fong explained.
Apart from regular business activities like leases, the government typically earns nothing at the start of the year. “Sometimes the transactions are approved way earlier, but the implementation or payment gets delayed so there’s a lag on when the income comes in,” she said.
Fong pointed out the meager earnings from the sales of government assets, noting that “it’s just a small amount, but we’ll catch up soon.”
Another reason behind the little amount raised in January was “simply because the PrC [Privatization Council] has not met yet for lack of quorum,” but Fong assured that the council is set to meet “soon.”
“There were changes in officials (some resigned, etc.) so we are waiting for new designations and we’ll convene one as soon as there is a quorum,” she added.
‘Promising’
Fong said that this year’s privatization trajectory “looks promising,” assuring that the government will “try” its best to attain the 2025 privatization program.
“Some of the attractive assets still have complications, and selling them won’t be so straightforward,” Fong noted.
Attractive assets are the larger ones included in the old list such as Mile Long. Among the various complications these big assets need to settle are parties interested in entering joint ventures, pending tax claims, and other issues.
“We will strive to close transactions as soon as possible, and/or clean up the papers of assets that need to be sold, even if the transaction closes and payment comes in later.”
For April, the PMO is eyeing to dispose of 51 lots, with a combined base price of ₱603.5 million. It is selling 17 idle properties worth ₱245.3 million through public auction on an “as-is, where-is” basis, along with 34 lots valued at ₱358.2 million available for negotiated sale.
Ordinary Filipinos are encouraged to buy the government's idle assets to add to much-needed public revenues, which would finance the country’s budget deficit.
“We’re opening up also for retail investors, because there are many government assets that are nonperforming, and it costs government to maintain them so might as well privatize that,” Recto said in an interview with Bloomberg TV.
“And even small properties that are bought by the private sector or even individuals, they could create more value for the economy,” he added.
For 2025, the Marcos administration is increasing its budget deficit to ₱1.54 trillion—the widest in three years, in terms of amount, if achieved.
Last year, the government exceeded its targeted fiscal deficit of ₱1.48 trillion when it reached ₱1.51 trillion, 5.7 percent of the country’s gross domestic product (GDP).
(With Ben Arnold de Vera)