Press Release
October 30, 2007

"Fast-track privatization of strategic assets should be taken
with caution" - Angara

With the sale of government shares in the Philippine Long Distance Telephone (PLDT) Company complete and other government privatization efforts lined up, Senator Edgardo Angara warns that the sale of strategic assets of the government should not intervene with issues of national security.

"Markets should be kept open, but our national security should also be protected," said Senator Angara.

Senator Angara pertains to the sale of strategic assets, the transfer of which to foreign governments and foreign corporations could have implications to national security.

"For instance, Transco (National Transmission Corporation) is a very strategic asset and I really fear for a foreign government-owned corporation controlling the distribution of power in this country. Theoretically, they can turn on and off the power of our country," Senator Angara pointed out.

Aside from the government equity in PLDT, Finance Secretary Margarito Teves is also eyeing the sale of state shares in Manila Electric Co. (Meralco) and San Miguel Corp. (SMC) this year.

The World Bank has also agreed to give its universal consent for the transfer of the debts and assets of the National Power Corp. (Napocor) and National Transmission Corp. (Transco) to the state-run Power Sector Assets and Liabilities Management Corp. (Psalm). This consent makes the Transco and Napocor assets attractive, thus pushing its privatization another step forward.

But the Senator warns that the sale of strategic assets such as electricity firms should be taken with caution, especially in light of security threats such as the recent Glorietta 2 bombing.

"In big investment destination countries such as the United States, Canada and other Western, a foreign investment review board examines and investigates foreign investments in the US that may have adverse effects to national security," pointed out Senator Angara.

"But in the Philippines, the privatization of state assets classified by the National Economic Development Authority (NEDA) as strategic only needs the approval of the president. That's too big a decision to be given in the hands of a single person."

Instead, Senator Angara proposes an inter-agency committee that will evaluate and scrutinize the national security implications of the sale of the state's strategic assets. The senator has already filed a resolution directing appropriate committees in the Senate to review the process of privatizing strategic assets, and to draft its corresponding law.

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