THE Governance Commission for Government-Owned and Controlled Corporations (GCG) is winding down 21 state-run firms that no longer effectively fulfill their mandates.
GCG Chairman Marius P. Corpus told the BusinessMirror via a messaging app that the central oversight body is expediting the abolition process for these GOCCs.
Of the GOCCs that will close shop, seven are in the agricultural sector, including CDCP Farms Corp., National Agri-Business Corp., Philippine Agricultural Development and Commercial Corp., Philippine Sugar Corp., Quedan and Rural Credit Guarantee Corp., Zamboanga National Agricultural College-Rubber Estate Corp. and Northern Foods Corp.
There are also five involved in area development and real estate, such as the Alabang-Santo Tomas Development Inc., Human Settlements Development Corp., PNOC Development and Management Corp., First Cavite Industrial Estate Inc. and Partido Development Administration.
The utilities group includes the following: Panay Railways Inc.; North Luzon Railways Corp.; PNOC Shipping and Transport Corp.; and, Disc Contractors, Builders and General Services Inc.
The energy and materials sector accounts for two firms: PNOC Alternative Fuel Corp. and Philippine Forest Corp.
The list also includes Technology Resources Center in the education sector, as well as the AFP-Retirement and Separation Benefits System and Philippine Veterans Investment Development Corp. in the financial sector.
While there is no specific number of state-run corporations targeted for closure this year, Corpus told the BusinessMirror that the GCG deactivates these entities first as the abolition process takes time.
‘The process usually takes a longer period of time because of legal requirements and the tedious liquidation process,’ he explained. ‘What the GCG initially does for a non-performing GOCC is to deactivate its operations to prevent further losses and preserve assets.’
GCG data showed that as of end-June, 30 non-operational, inactive or deactivated GOCCs are slated for closure, merger or privatization.
Corpus said the GCG can recommend the merger of GOCCs that have redundant functions or the privatization of those whose activities can be best served by the private sector.
As of end-June, 11 firms had been dissolved, one had been privatized, three had been merged and one had been disposed of by the Privatization and Management Office.
In an interview over radio last Saturday, Finance Secretary Frederick D. Go said that about 10 percent of the more than 100 GOCCs should be closed to free up public resources for the government’s programs and services.
According to Go, the government has provided as of end-June a total of P114.576 billion in subsidies to state-run firms to help them perform their mandated government functions and cover operating expenses. The latter includes salaries and maintenance and other operating expenses.
He said that most of the country’s GOCCs remain in good condition, citing their record dividend remittances to the national government.
The government expects to collect P147.15 billion in dividends from GOCCs this year, strengthening public finances and helping expand investments in infrastructure, education and healthcare, among others.
GOCCs are required to declare and remit at least 50 percent of their annual net earnings as dividends to the national government under Republic Act No. 7656 or the Dividend Law.