PHILIPPINES TO PUT 100 STATE FIRMS UP FOR SALE
The head of a Philippine panel charged
with selling the non-performing assets of government financial
institutions said some 100 state-owned companies would also be
put up for privatisation.
    But David SyCip, chief executive trustee of the Asset
Privatisation Trust (APT), told a meeting of financial
executives the APT has not yet received a list of the firms.
    "I believe lead investor groups, people who see long-term
potential, are willing to buy such companies in full and do a
hands-on job of running them," SyCip said.
    SyCip said open bidding would be used to sell all assets
handled by the APT. He said bidding would be either
open-priced, if there were enough serious contenders, or the
APT would set a target price for acquisition. He added that the
target price did not constitute a rigid floor.
    "What we consider an acceptable price is a price at which an
investor will earn an adequate return," he said.
    SyCip said the bulk of the APT's current work relates to
the non-performing assets of the state-owned Development Bank
of the Philippines (DBP) and the Philippine National Bank
(PNB). The APT was set up in January.
    SyCip said about 75 pct of the 400-odd assets that the DBP
and the PNB are handing over to the APT are still in the form
of financial assets.
    "In some cases financial assets have been converted into
physical assets by foreclosures. They are fairly cut and dried
because we are dealing with mostly whole production facilities
like textile or food-processing plants," he said.
    "Financial assets are more complicated. The only recourse is
to foreclose, gain titles, and try to sell the asset, but the
laws here tend to favour the debtors," he added.
    SyCip said although the APT is protected from prosecution
by its charter, many debtors are tying up the panel with
litigation.
    "If you see some of the situations we have to work our way
through you will see that our symbol, a Gordian knot, is an apt
illustration," he said.
    SyCip said the PNB has not succeeded in foreclosing on 16
of the 17 sugar factories it wants to sell because of the high
costs involved. "When you do your arithmetic you realise that if
you did foreclose your recovery would be only a fraction of the
asset's book exposure," he said.
    SyCip said the APT was not worried about whether associates
of former President Ferdinand Marcos, who originally owned many
of the bankrupt companies, would buy them back through the
privatisation scheme.
    "We just look at the bottom line, which is to monetise these
assets to the maximum degree possible," he said. "We are selling
for cash, it is not our concern where it comes from."
    He said he had told cabinet ministers sceptical about the
identities of buyers that "Marcos cronies" could easily put up
legitimate fronts if they were specifically barred from bidding
for assets on the block.
    "I told them if I am paid 20 mln pesos in 100-peso bills,
all with identical serial numbers and they look like genuine
legal currency, then I would accept them'," SyCip said.
    He said some participants in the government's debt-equity
swap scheme were interested in buying non-performing assets
with the pesos they receive from such deals. The problem is
government regulations slow down approval of debt-equity plans
and the APT normally demands full payment within 15 days.
    "The Central Bank and Monetary Board could also look at
investment funds earmarked for non-performing asset purchases,"
he said. "It would greatly facilitate matters."
    SyCip said last month the APT hoped to recover about 24
billion pesos of the assets' total worth of 108 billion.
    President Corazon Aquino announced earlier this month that
proceeds from the sale of APT-controlled assets would be used
to finance the government's land reform program, which aims to
distribute about 9.7 mln hectares of land to poor peasants.
    Asked why the APT did not favour Filipino buyers, SyCip
said: "How much money has the country to lose because of this
'Filipinos first' slogan? How many people have become
millionaires and then forgotten the Philippines and put their
money in the United States or Australia?"
 REUTER
