The Department of Finance (DOF) is eyeing to amend the guidelines for the disposal of state assets to make the disposition process easier.
The DOF is hoping to have the guidelines amended this month, Catherine Fong, finance undersecretary for the privatization and corporate affairs group, told reporters on the sidelines of a forum held in Manila last Tuesday.
“We need to raise a lot of funds. The Privatization Council has approved a lot of properties for disposition. However, the Privatization and Management Office (PMO) is not very good at marketing. We are looking at BSP’s model, we are able to give some broker’s fees. I mean, why not use the real estate companies or anybody who are able to sell, give them some fee,” Fong said.
“We are looking at that possibility, we’re looking to revise the Privatization Council guidelines on the disposition,” she added.
According to Fong, the current guidelines do not allow the agency to sell lower than the base price, which is set by two independent appraisals.
“A lot of these properties, for example, there are a lot of informal settlers (already), it makes sense to just sell it to the local government units (LGUs). But the LGUs are only willing to buy it at zonal value, for example, but right now we’re not allowed to do that. So, our first priority right now is to amend the guidelines to make it easier to dispose of these properties so that we can raise more money,” she said.
While there are many properties in the pipeline, the disposal process is also bogged down by tedious procedures.
“For the procurement of the appraiser, it already takes so long. Then you have to wait for the appraisal to happen, then we get the average to set the base price for auction,” Fong said.
“Then sometimes the appraisal price, well, for certain properties, sometimes they are lower than the actual market price. For others, it’s much higher than the actual market price, so we don’t have the flexibility. And a lot of the assets that have been auctioned, failed bidding, so we need to know how to minimize that. That’s what we’re trying to solve right now,” she added.
The PMO is an agency attached to the DOF mandated as the marketing arm of the government with respect to transferred-assets, government corporations and other properties assigned to it by the Privatization Council for disposition, as well as the disposition entity of properties transferred to the Republic.
