Government Targets P101.5 Billion From Privatization in 2027, Led by CBK and Agus-Pulangi

 

Government Sets P101.5 Billion Privatization Target for 2027

The Philippine government is preparing for a major privatization push in 2027, with the Department of Finance setting a revenue target of P101.5 billion. The strategy will center on large power-sector assets, particularly the Caliraya-Botocan-Kalayaan hydroelectric complex and the Agus-Pulangi hydropower system.

The planned proceeds represent a dramatic increase from the earlier P1.5 billion target for next year, reflecting the expected contribution of high-value government assets to the privatization program.

CBK Deal Expected to Deliver P36 Billion

The 797-megawatt Caliraya-Botocan-Kalayaan, or CBK, hydroelectric complex spanning Laguna and Quezon is expected to account for a substantial portion of the 2027 proceeds.

The facility was turned over to the Thunder Consortium in February following the completion of the transaction. Although the sale has already been concluded, the government expects the corresponding proceeds to be recognized in 2027 because of accounting considerations.

The transaction is projected to generate approximately P36 billion for the government.

Department of Finance Undersecretary and chief privatization officer Michael Peter Alejandro identified CBK as one of the principal assets underpinning next year's revenue objective.

Agus-Pulangi Rehabilitation Moves Toward Private Participation

Another major component of the government's 2027 program is the Agus-Pulangi hydropower complex in Mindanao.

The system comprises seven hydropower plants with a combined installed capacity of at least 1,000 megawatts. Rather than simply transferring the assets through an outright sale, the government is exploring a public-private partnership arrangement to rehabilitate and improve the facilities.

A private partner could be selected next year, with rehabilitation work targeted to commence during the same period. The upgraded facilities are expected to be completed in stages between 2028 and 2032.

The proposed approach could allow the government to leverage private-sector capital and expertise while preserving the strategic value of the hydropower system. Agus-Pulangi remains an important component of Mindanao's electricity infrastructure, making rehabilitation a potentially significant long-term investment.

The specific structure of the transaction remains subject to discussions involving the Power Sector Assets and Liabilities Management Corp., or PSALM.

2026 Privatization Goal Cut Sharply

The government's more ambitious 2027 outlook comes as its privatization target for 2026 has been substantially reduced.

The original goal of P101 billion was lowered to P38.1 billion, representing a 62.5 percent reduction.

Despite the adjustment, the government has already generated P1.9 billion from privatization activities during the first six months of the year. Officials are now looking to several major properties to increase collections before the year ends.

Among the assets being pursued are the Food Terminal Inc. property and the Mile Long property, following the completed sale of the Atrium of Makati.

Developers and Pension Funds Show Interest in Mile Long

The Mile Long property has also attracted attention from potential institutional and private-sector investors. According to the Department of Finance, developers and pension funds have expressed interest in the property.

These transactions form part of a broader effort to convert underutilized or state-owned assets into government revenues while opening opportunities for private investment.

Taken together, the planned CBK proceeds, the Agus-Pulangi rehabilitation project and other asset sales point to a more aggressive privatization agenda in 2027. The government's challenge will be to balance revenue generation with the long-term economic and strategic importance of the assets being placed under private participation.