Philippines to Sell Remaining Stake in Philippine National Bank

The Philippines is considering selling its remaining 12 percent stake in the Philippine National Bank (PNB) to cigarette and beer tycoon Lucio Tan. The government had earlier sold a 33 percent stake in the bank to Tan at 43.77 pesos per share in August, reducing its holding to 12 percent. The sale is part of the government's efforts to narrow its budget deficit, which stood at 125 billion pesos last year.

Key Takeaways:

• The government can sell the remaining 12 percent stake in PNB to Tan at the same price of 43.77 pesos per share until August 2007.
• The sale of the 3 percent stake to the public has not drawn much interest, and the government may not be able to sell the entire stake.
• Philippine National shares were trading at 32.50 pesos on Monday, which is lower than the sale price of 43.77 pesos per share.
• The merger of PNB with Allied Banking, a privately held company owned by Lucio Tan, is planned to create the nation's third-largest lender by assets.
• Philippine National Bank is currently the nation's No. 5 lender by assets, according to central bank data as of September.

Statistics:

• The government's remaining 12 percent stake in PNB is worth approximately 3.1 billion pesos at the sale price of 43.77 pesos per share.
• The sale of 33 percent of PNB's stake to Lucio Tan in August raised his holding to 77 percent.
• The government is unloading assets to help narrow the budget deficit to 125 billion pesos this year.
• The nation's debt has nearly tripled to 4.02 trillion pesos in the last eight years.
• Philippine National Bank has assets valued at 356.7 billion pesos as of the end of September.

Sources:

• "Phl sells 33 pc stake in PNB to Tan for 83 cents a share", Business World, August 23, 2004
• "Tan plans to merge PNB with Allied Banking", Business World, August 23, 2004
• Central Bank of the Philippines: "Banking System: Banking Statistics, September 2004"