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THE Department of Finance has asked the Philippine Ports
Authority (PPA) to postpone its proposed bond sale
scheduled for the first quarter and to discuss further
with them the transaction’s details.
Oscar M. Sevilla, port authority general manager, said the
finance department is still studying whether they need a
national government guarantee for the bonds to make them
more attractive.
Earlier, the authority opined it may not need a government
guarantee but just “the name of the PPA itself” is
enough since the agency is fully capable of paying its
debts. Its income is raised from several port fees.
In addition, the PPA regularly contributes to the finance
department’s sinking fund, a sum set aside periodically
from the income of a government agency. The savings can
be used to pay off debts. The port agency is one of the
country’s top sources of revenue, having remitted P1.63
billion to the national government in 2005.
Discussions regarding the proposed bond sale started early
last year after President Arroyo gave orders to connect
the remotest parts of the archipelago by sea, a
sentiment shared by various proposals from funding
agencies, including the Japan International Cooperation
Agency (Jica).
The port authority then said it would sell P2 billion worth
of bonds in two tranches, with the first half to be sold
anytime during January to March and the other half by
July this year. They are both redeemable in seven
years.
Proceeds of the debt sale, with Development Bank of the
Philippines as its sole underwriter, would be used to
acquire equipment to upgrade seven of 10 major ports to
place them on a par with international standards by
2010.
Among these are the ports of Cagayan de Oro,
Davao,
Sasa Wharf, General Santos, Iloilo, Misamis Oriental,
Ozamis, and Zamboanga. The three others—Manila
International Container Terminal, Manila South Harbor,
the Batangas Port—will be upgraded by the private
sector. |
