The government has pushed back to the second semester its privatization target for Food Terminals Inc. (FTI) and PNOC-Exploration Corp. (PNOC-EC) due to bad market conditions.

Finance Secretary Margarito Teves yesterday said the target is on or before September 30 for the actual bidding.

"There’s the market condition and legal considerations," Teves said, explaining the delay.

By that time, government expects market conditions to have improved.

Teves said the mode will still be public bidding.

Teves earlier said the finance department prefers selling the assets to the private sector than to government financial institutions.

The government earlier wanted the auction to take plae during the first or second quarter to plug a widening budget shortfall.

The goverment reported Wednesday a shortfall of P119.7 billion just for the first three months.

The final valuation for the FTI is expected to be completed soon while pricing plans for the PNOC-EC have yet to be submitted to the Privatization Management Office (PMO).

Teves said the September sale is only the "worst case scenario" since there is still chance to auction them off by end of the second quarter or before June.

He said the FTI is likely to be sold at P10 billion while the PNOC-EC is expected to fetch a price of P11 billion.

The government has already sold PNOC’s shipping unit, the PNOC Shipping and Transport Corp (PSTC), for P1.3 billion.

The finance chief said they are also thinking of widening the scope of the FTI sale but the Taguig property has at least 24 hectares currently occupied by lessees.

The FTI property measures 120 hectares.

The government expects to earn at least P30 billion this year’s privatization, including the sale of its property in Fujimi, Japan, where the embassy stands.

The Fujimi property will not be sold outright but will be offered through a long-term lease arrangement.

Finance officials earlier said government will likely sell more assets in order to earn beyond the P30 billion it had programmed from privatization in 2009.