Support for the steel industry might be gleaned from the Philippine government’s policy toward the establishment of the steel mill changed from one administration to another. Henares (2006), who chronicled the Philippine steel industry from its aborted birth in 1950s to its tumultuous events in early 1990s, stated that the government acted as the investment pioneer of the steel mill under President Magsaysay. The steel industry became a joint venture arrangement under President Garcia. President Diosdado Macapagal totally handed over the project into private hands. Under Marcos’ martial rule, it confiscated and seized the steel industry. After the EDSA People Power in 1986, President Aquino ordered privatization all over again.
From 1990 to 1996, privatization of state-owned enterprises became a phenomenon in both industrial and developing countries (The Economist, 22 March 1997). As early as 1990, talks about NSC’s privatization surfaced to NSC employees’ consciousness (Longakit, 1990) with the government intending to retain as much as 30% of NSC’s shares, another 30% sold to the public and remainder auctioned off to big investors. Later, in 1991, a revised proposal that twenty-five (25%) per cent of National Development Company (NDC) shares were to be offered to the public, primarily Filipino investors, and employees of NSC and NDC. NSC’s mother company, NDC, even hired SGV and Morgan-Grenfell as financial advisors to study the mechanics of the privatization plan (NSC News, April 1991).
When Fidel V. Ramos assumed as president in May 1992, with his “Philippines 2000” vision, he embarked on a pro-business and free market-oriented government and pushed for the privatization of strategic public assets, particularly NSC (NSC News, June 1994). Ramos encouraged greater private sector participation in the economy, for substantial share of that sector in the country’s growth and prosperity. Furthermore, he acknowledged (NSC News, June 1994) that steel being essential to modernization, a relatively advanced and cost-effective iron and steel industry was vital to the attainment of “Philippines 2000,” purportedly the collective national vision of the Philippines reaching newly industrializing status by the year 2000.
Ramos approved selling 51% of government’s stake in NSC on 11 September 1992, based on Proclamation No. 50 under the Aquino government mandating the privatization program for government-owned and controlled corporations (NSC News, September 1992, p. 3). The consortium of All Asia Capital and UK’s Barclays de Zoete Wedd was selected as NSC privatization’s financial advisor tasked to formulate, develop and assist in implementing a plan within a specific timetable. Pittsburgh-based Beddows and Co. and SGV Law Co. reinforced the All-Asia and Barclays team as consultants (NSC News, July 1993).
Incidentally, later studies such as Megginson, Nash, and van Randenborgh (2004) presented strong evidence from 61 firms in 12 industrial and 6 developing countries, and thirty-two industries privatized in 1961-90 that indeed this new phenomenon offered higher profits, greater efficiency, more investments, higher output, lower leverage, and higher dividends, and as an added bonus, increased employment. A similar study, (Boubakri and Cosset, 1998), considered 79 newly privatized firms, headquartered in 21 developing countries, that experienced full or partial privatization during the period from 1980 to 1992, showed exactly the similar results.
Notes:
The Economist (1997). “Financial Indicators: Privatization.” London: The Economist, 22 March 1997, p. 125. back to text
Henares, Hilarion M. Jr. (2006), “National Steal Corporation,” Give and Take. Book 9. Manila: Philippine Folio, 2006. back to text
Longakit, Glenmoore (1990), Privatization and NSC Potentials. NSC News, XV: 7, Makati: Corporate Communications, NSC, 31 July, 1990. pp. 10-11. back to text
Altres, Norberto J. (1991), Para sa NSC Employee: Part Ownership ng NSC. NSC News, XVI: 4, Makati: Corporate Communications, NSC, 30 April, 1991. pp. 16 – 18. back to text
Ramos, Fidel V. (1994), “Steel and ASEAN Modernization” excerpted from the Proceedings of the 38th Southeast Asia Iron and Steel Institute (SEAISI) Conference, Makati, 23—28 March 1994. NSC News, XIX: 6, Makati: Corporate Communications, NSC, 30 June 1994. pp. 4—7. back to text
Santos, Bayani Jr. (ed.) (1992), FVR OKs sale. NSC News, XVII: 9, Makati: Corporate Communications, NSC, 30 September 1992. p. 3. back to text
Santos, Bayani Jr. (ed.) (1993) Privatization advisor named. NSC News, XVIII: 7, Makati: Corporate Communications, NSC, 31 July 1993. p. 26. back to text
Megginson, William L., Robert C. Nash, and Matthias van Randenborgh (1994). The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis. Journal of Finance, Vol 49: pp. 403—52. back to text
Boubakri, Narjess and Cosset, Jean-Claude (1998), Privatization in Developing Countries: An analysis of the performance of newly privatized firms. Public Policy for the Private Sector, No. 156, November 1998. pp 1—4. back to text
The Grey Chronicles 
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