The Department of Finance (DOF) is maximizing the national government’s revenue streams by privatizing non-performing and idle public assets to generate more funds to aid national development and minimize debt.
“The assets we are privatizing are no longer productive and continue to drain the national government’s resources through management, security, and maintenance costs,” DOF Secretary Ralph Recto said in a news release on Sunday.
“By disposing of these non-performing assets, we eliminate unnecessary expenditures and unlock resources that can address the pressing needs of our people. This approach ensures the efficient use of public funds,” he added.
To support the national government’s gargantuan budget, the DOF is pursuing the generation of non-tax revenues through its privatization efforts as stated in Executive Order 323, which established the Inter-agency Privatization Council (PrC) and the Privatization Management Office (PMO).
The PrC directs, supervises and coordinates all privatization and similar disposition efforts undertaken by the national government to promote private sector participation in developing the Philippine economy and to generate maximum cash recovery.
The Council sets the minimum base price of each asset which is typically the fair market value as assessed by third-party valuations or appraisals.
It is composed of the Secretary of Finance as Chair, with the Secretary of the Department of Budget and Management, the Department of Trade and Industry, the National Economic and Development Authority, and the Department of Justice as members.
The National Treasurer and the Chair of the Presidential Commission on Good Government serve as non-voting members of the Council.
In September 2024, the national government approved the new guidelines on the privatization and disposition of government assets by the PrC.
This institutionalizes the policies and decisions of the PrC over the years to guide both the public and private sectors in ensuring the process, rules, and regulations are clear and transparent.
Meanwhile, as an attached agency of the DOF, the PMO facilitates an orderly, coordinated, and efficient program for the prompt disposition of non-performing assets of government financial institutions, and certain government-owned or controlled corporations, which have been found unnecessary or inappropriate for the government sector to maintain.
There are currently 28,665 non-performing assets transferred to the PMO for privatization.
If not privatized, the government will have to use much-needed funds meant to aid national development for the management, security, and maintenance of these assets.
The disposition of properties are published through newspapers of general circulation and posted on government websites to ensure full transparency on the sale. The terms and conditions of the sale are unanimously approved by the PrC.
The DOF has been in close coordination with the Social Security System and Government Service Insurance System on some assets that would serve as good long-term investments for the pension funds.
The privatization of idle and underperforming government assets is a win-win solution for both the national government and investors, as compensation from the sale will support priority programs and projects that will benefit the Filipino people. (PNA)
