5 GOCCs scrapped, 7 more on way out

MANILA, Philippines - President Aquino approved last year the abolition of five underperforming government-owned and controlled corporations (GOCCs), including three implicated in the pork barrel scam, and seven more may be scrapped.

The Governance Commission on GOCCs (GCG) said in a statement released yesterday that in the last quarter of 2013, Aquino had approved the abolition of the National Agribusiness Corp. (NABCOR), Zamboanga del Norte Rubber Estate Corp. and Philippine Forest Corp., which were linked to the alleged misuse of the pork barrel or Priority Development Assistance Fund (PDAF) of lawmakers.

The two other agencies abolished by the President were the Human Settlements Development Corp. and Cottage Industry Technology Center.

All five firms were included in the 19 underperforming GOCCs that Reps. Rufus Rodriguez of Cagayan de Oro and his brother Maximo of the party-list group Abante Mindanao have sought to abolish.

The GCG has also recommended the abolition or privatization of another seven out of the 19 GOCCs cited in the Rodriguez bill. These are the Marawi Resort Hotel Inc., Philippine Aerospace Dev’t Corp., NDC-Philippine Infrastructure Corp., Batangas Land Co., Kamayan Realty Corp., GY Real Estate Inc. and Pinagkaisa Realty Corp.

The GCG has also recommended for abolition or privatization five more GOCCs: the Alabang Sto. Tomas Development Inc., Tierra Factors Corp., Traffic Control Products Corp., DISC Contractors, and CDCP Farms Corp.

The Rodriguez brothers have filed House Bill No. 3807, which seeks to abolish 19 GOCCs that are either losing money or have redundant functions with other agencies, especially those that have been linked to the multibillion-peso pork barrel fund scam.

“We have to make sure that this is studied thoroughly by the GCG, which has the mandate to ensure that all government companies are in shape,” Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office said yesterday.

Presidential spokesman Edwin Lacierda said the GCG is in charge of evaluating the performance of every GOCC under its watch.

The other six GOCCs in the Rodriguez bill – Banaue Hotel and Youth Hostel, BCDA Management and Holdings Inc., Masaganang Sakahan Inc., Northern Foods Corp., Tourism Promotions Board (also called the Philippine Convention and Visitors Corp.) and Trade and Investment Development Corp. (now PhilEXIM) – are part of the GCG’s regular sector-wide evaluation of GOCCs.

The evaluation is based on financial viability and relevance to current national development plans.

The Freeport Services Corp., a subsidiary of the Subic Bay Metropolitan Authority, is outside the jurisdiction of the GCG.

The GCG said President Aquino also approved the abolition of six other GOCCs not appearing in the Rodriguez bill. These are the Southern Philippines Development Authority, Philippine Fruits and Vegetables Corp., San Carlos Fruits Corp., Philippine Agricultural Development and Commercial Corp., Bataan Technology Park, Inc. and PNOC Shipping and Transport Corp.

The GCG said 14 more GOCCs were actually dissolved by expiration of corporate term or were rendered non-operational or liquidated under the direction of the GCG.

These firms include the Manila Gas Corp., PNOC Malampaya Corp., Aviation Services and Training Institute, Calauag Quezon Province Integrated Coconut Processing Plant, Clark Polytechnic Dev’t Corp., First Centennial Clark Corp., GSIS Properties Inc., LBP Financial Services SpA, LBP Remittance Company, LBP Singapore Representative Office, Paskuhan Development Inc., Phil. Centennial Expo ’98 Corp., Philpost Leasing and Financing Corp. and Metro Transit Inc.

There are 116 GOCCs that are currently being monitored, which the GCG aims to reduce to fewer than 100 by the end of the year through abolition, privatization or merger.

The streamlining of non-performing or unnecessary GOCCs is a key objective in the GCG’s roadmap to improving efficiency and transforming the GOCC sector into a tool for economic growth and development.

Affected employees are given separation pay amounting to around one month’s salary for every year of service, unless an administrative or criminal case is failed against them.

No need for legislation

Senate President Franklin Drilon said that there is no need for any congressional action to abolish non-performing GOCCs because there are already mechanisms in place to accomplish this.

Drilon said that the GCG is tasked to go over the performance of the state-owned corporations and to take appropriate action against those that are not performing well or are no longer relevant.

“We do not need legislation for that because that can be done under the GOCC Governance Act,” Drilon said.

He said that the GCG has a mandate to perform a technical evaluation of the GOCCs, so if ever there is a need to abolish any one of them, the GCG would be able to recommend this to the President.

Bill 3807 filed by the Rodriguez brothers provides that all officers and employees of the abolished GOCCs should be given separation pay equivalent to their salary for two and a half months. The funds should be provided in the national budget.

The bill also sought to transfer the agencies’ functions to other government offices.

The departments of finance and budget and management, and the Commission on Audit would be mandated to issue the implementing rules and regulations.

“Consistent with the Aquino administration’s austerity measures, it is high time that the government remove the excess fat and spend only for things that are truly vital to the country,” the Rodriguez brothers said.

They said the government has around 120 GOCCs, many of which are unnecessary, underperforming and losing money.

However, the lawmakers said taxpayers are still paying for the expenses of these GOCCs, including the officers’ and employees’ salaries.

“This is aside from the P7.28 billion that the government extends to these state-owned subsidiaries as subsidies from January to May, or P2.25 billion more than the P5.03 billion recorded in the same period in 2013,” they said.

The lawmakers said these subsidies are booked as expenses and continue to put a strain on the government’s widening budget deficit.

Earlier, militant party-list groups led by Bayan Muna sought the abolition of the National Livelihood Development Corp., a subsidiary of Land Bank of the Philippines, and Technology Resource Center for involvement in the pork barrel scam. With Marvin Sy