Assessment of GOCCs’ merits | Inquirer Business
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Assessment of GOCCs’ merits

/ 12:27 AM November 30, 2015

THE COMING holiday season will be a period of unease for some employees of government-owned and -controlled corporations (GOCCs).

The Governance Commission for Government Owned or Controlled Corporations (GCG) announced that it was assessing 14 GOCCs to determine if they should be abolished, privatized or merged with other GOCCs.

Tasked by law to monitor and evaluate the performance of GOCCs, the GCG has secured the approval of President Aquino for the abolition of 22 GOCCs to date.


A GOCC may be reorganized, merged, streamlined, abolished or privatized if, among others, the functions or purposes for which it was created are no longer relevant or consistent with national development policy.


The same fate awaits a GOCC that “is not producing the desired outcomes, or no longer achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical and economic returns vis-à-vis the resource inputs.” Or to put it bluntly, it has become a nonperforming asset, has outlived its usefulness, or its continued operation constitutes a wanton waste of the taxpayers’ money.


The GCG may be looked at as a product of President Aquino’s displeasure, at the beginning of his term, with the excessive allowances the board of trustees of Metropolitan Waterworks and Sewerage System (MWSS) gave its executives and employees.

MWSS treated like a piggy bank the fees and charges paid to it by the water concessionaires it regulates by giving its staff cost of living allowance, amelioration allowance, anniversary bonus, hazard pay and other financial benefits for dubious reasons.

Since its organization in 2012, the GCG has fulfilled its mandate to rationalize the organization and operation of GOCCs.

The criticisms it received for approving the grant of bonuses to GOCCs that were able to meet their performance and financial targets were par for the course. The law, as part of its carrot and stick principle, authorizes GCG to reward GOCC executives and employees who do well in their job.


The most significant feather in the cap of GCG is the billions of pesos in dividends that GOCCs have remitted in recent years (and hopefully for the years to come) to the Treasury.

Until the GOCCs’ activities were closely monitored and their officers vetted for competence by GCG, the government received loose change in dividends while the bulk of GOCC revenues were used to fund the staffs’ perks and privileges.


The GCG’s decision to withhold the release of the names of GOCCs whose operations are under review makes sense.

Maintaining the confidentiality of that information will minimize the possibility of politicians interfering in the assessment process or intervening on behalf of the executives of GOCCs in danger of losing their posts.

Note that GOCCs are under the administrative supervision of government agencies that are attached to an executive department whose responsibilities are related to the GOCC’s corporate objectives, or, by default, to the Office of the President.

This means, unless civil service rules apply, ties [otherwise known as “connect”] with the appointing authority play a significant role in the appointment process for GOCC positions.

It is not uncommon for the employee profile of GOCCs to reflect the regional affiliation of the congressman or senator who lobbied for the creation of the GOCC through legislative or executive fiat. As the political dictum goes, “What are we in power for?”

Thus, GOCC executives or employees are not lacking in political backers or links with the powers-that-be that they can run to or lean on in case their continued stay in office (or the office’s existence) is threatened.

When GCG comes up with its recommendations on the GOCCs that are in its crosshairs and word leaks out about it, expect the political patrons of the affected GOCC executives to pull all strings possible to save the neck of their protégés.


With the national and local elections just six months away, the kind of political will President Aquino showed in approving the abolition of 22 nonperforming GOCCs in earlier years may not be as strong when GCG submits its report on GOCCs undergoing scrutiny at present.

The administration’s presidential standard bearer is not doing well in the surveys. The entry of Davao City Mayor Rodolfo Duterte in the presidential race further complicates the task of promoting former Interior Secretary Mar Roxas as worthy successor to President Aquino.

This vulnerability can be cleverly exploited by politicians who want to protect the interests of their fair-haired boys in beleaguered GOCCs. By simply not acting on GCG’s recommendations, President Aquino can earn the “gratitude” of these politicians that may redound to the benefit of Roxas.

Hopefully, this kind of horse trading will not rear its ugly head in GCG’s report.

On June 30, 2016, when President Aquino steps down from office, the term of office of the GCG commissioners will also expire.

If action on the 14 GOCCs whose performance it is currently evaluating is not completed by then, the task will be passed on to the next administration.

Considering GCG’s strategic position in the government hierarchy, it may take some time before the new administration is able to appoint new GCG commissioners.

Thus, the work is cut out for the present GCG to complete, as much as possible, the task it started in 2012 to rationalize the operation of GOCCs that are worth keeping and abolish those that no longer have any reason to partake of the people’s money.

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TAGS: bonuses, Business, elections 2016, GCG, GOCC, Governance Commission for Government Owned or Controlled Corporations, Mar Roxas, MWSS, News, Office of the President, Treasury

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