Philippines: The Philippines government said on March 9 it would sell its stake in San Miguel Corp., worth $1.5 billion, this year as part of a privatisation program to pay down debt. "The target is to sell San Miguel this year, period," Reuters cited Finance Secretary Cesar Purisima telling reporters on the sidelines of a business meeting on Wednesday, 09 March.

The government, San Miguel's single largest shareholder, currently holds a total of about 41 percent of the company, Southeast Asia's largest food and beverage group, Purisima said. President Gloria Macapagal Arroyo has previously said the government had planned to sell San Miguel stakes held by various agencies in one block but did not indicate the time frame.

Purisima said Arroyo had given him the "go signal" to look at government assets that may be privatized. "We're going through an inventory right now of the government's assets. So far, from what I've seen there's a lot of low-hanging fruits," Purisima said. Purisima previously said proceeds from asset privatisation would give the government extra elbow room to cut the government's total public debt burden, which is equivalent to 139 percent of gross domestic product. He said there were still legal issues complicating the sale but added that the government did not see them as major obstacles.

The stake could be diluted in a rights offering later this month. The Finance department has recommended that the government pass on the rights issue because of a lack of funds. However, Purisima said state pension funds -- the Social Security System and Government Service Insurance System -- were free to purchase San Miguel shares in the rights offer if buying the stock fit their asset allocation strategies.

The stake held by pension funds is separate from a 25 to 27 percent interest awarded to the government by the Supreme Court last year. The blocks of shares were seized by the government in 1986 after the fall of late dictator Ferdinand Marcos on suspicion the holdings were bought with illegally acquired money.

Coconut farmers had said that the government's holdings belonged to them because they were bought using a levy collected from the farmers illegally in the 1970s.

Japan's number-two brewer Kirin Brewery holds a 20 % stake in San Miguel while mall tycoon Henry Sy of SM Prime Holdings Inc owns about 6%.

San Miguel's A shares were unchanged at 57 pesos on Wednesday while its B shares open to foreigners gained 0.6 percent to 84.50 pesos. The main index climbed 0.38 percent.

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