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Philippines Privatization
When Aquino assumed the presidency in 1986, P31 billion,
slightly more than 25 percent of the government's budget, was
allocated to public sector enterprises--government-owned or
government-controlled corporations--in the form of equity
infusions, subsidies, and loans. Aquino also found it necessary
to write off P130 billion in bad loans granted by the
government's two major financial institutions, the Philippine
National Bank and the Development Bank of the Philippines, "to
those who held positions of power and conflicting interest under
Marcos." The proliferation of inefficient and unprofitable public
sector enterprises and bad loans held by the Philippine National
Bank, the Development Bank of the Philippines, and other
government entities, was a heavy legacy of the Marcos years.
Burdened with 296 public sector enterprises, plus 399 other
nonperforming assets transferred to the government by the
Philippine National Bank and the Development Bank of the
Philippines, the Aquino administration established the Asset
Privatization Trust in 1986 to dispose of government-owned and
government-controlled properties. By early 1991, the Asset
Privatization Trust had sold 230 assets with net proceeds of
P14.3 billion. Another seventy-four public sector enterprises
that were created with direct government investment were put up
for sale; fifty-seven enterprises were sold wholly or in part for
a total of about P6 billion. The government designated that about
30 percent of the original public sector enterprises be retained
and expected to abolish another 20 percent. There was widespread
controversy over the fairness of the divestment procedure and its
potential to contribute to an even greater concentration of
economic power in the hands of a few wealthy families.
Data as of June 1991
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