FINANCE Secretary Carlos G. Dominguez III said they are pushing through with the privatization of government’s mining assets to raise more revenues, but admitted that the state no longer has any more “crown jewels” left to be privatized.
Dominguez said the first one that they are eyeing to privatize is the Basay mine, although he said they still have to deal with several issues before they can push through with its disposal.
“I don’t know yet how much the exact valuation is and how we will bid it out, but that is the first mine we are doing. As you know, when it comes to disposition of mines, it is more complicated than just selling a piece of land or an ordinary asset because when you come to mines, number one, there are lots of claims and counterclaims and challenges to claims. That’s the number one issue. Number two, there are security, physical security issues. And number three, there is a valuation of what you are really selling,” Dominguez told reporters in a recent interview.
Earlier technical studies by the Privatization and Management Office (PMO) showed the Basay mine in Negros Oriental is estimated to contain at least 105 million tons of copper ore and could generate at least P1 billion.
Land titles, too
Apart from the government’s mining assets, Dominguez also said that PMO and the Philippine Deposit Insurance Corporation are also eyeing to privatize 30,000 land titles.
However, Dominguez said it would be an uphill battle to privatize the remaining government assets, including these land titles.
“Yes, we are continuing to privatize whatever assets that we have. But quite frankly, we don’t have any more crown jewels, okay. that has been privatized by previous administrations already. And the ones we are left with are really the difficult ones to privatize,”
Dominguez said.
“I don’t know if you are aware that PDIC and PMO have in excess of 30,000 land titles that are in the process of being evaluated and being privatized, being sold. And these are really difficult assets. These are not chunky assets anymore, like before you had big assets like banks, etc. So we don’t have those big chunks anymore. It’s really the difficult ones to privatize now,” he added.
As for the privatization of gaming activities of Philippine Amusement and Gaming Corporation and Philippine Charity Sweepstakes Office, Dominguez said they are currently in talks with them but no conclusion has been made yet.
In June this year, Environment Secretary Roy A. Cimatu said the Department of Environment and Natural Resources, through the Mines and Geosciences Bureau, is now preparing an inventory of essential mining information on the government’s idle mining assets.
For this year, the national government expects its budget deficit to reach P1.86 trillion or 9.3 percent of GDP, even higher than the P1.37 trillion or 7.6 percent of GDP in 2020.
In 2019, the budget deficit stood at P660.2 billion or 3.4 percent of GDP.
Meanwhile, the national government’s debt this year is also expected to balloon to P11.73 trillion by the end of this year, up by 19.8 percent from P9.795 trillion in 2020. This is also projected to further swell in 2022 to P13.42 trillion.
As a percentage of GDP, Dominguez earlier said the debt-to-GDP ratio this year is projected to further rise to 59.1 percent and peak next year at 60.8 percent—slightly above the internationally accepted threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.
The Department of Finance sees the national government returning to its pre-pandemic debt and budget deficit levels as early as 2024 or by 2025 if the recommended fiscal measures are passed early by the next administration and if the economy quickly recovers.
Image courtesy of Roy Domingo
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