Boards of GOCCs given free hand to decide on projects

The Governance Commission for Government Owned or Controlled Corporations (GCG) has repealed a rule issued five years ago that mandated closer coordination between the government and GOCCs when rolling out big-ticket development projects, giving their respective boards the power to green-light them.

GCG Memorandum Circular No. 2018-02 revoked MC 2013-03, which laid down rules on the coordination and alignments of major development projects of the GOCC sector.

MC 2013-03 was issued by the GCG to “balance the principle of operational autonomy in the GOCC sector with the need for interagency coordination toward paving the way for the convergence of the GOCC sector and the national government in pursuing inclusive and sustainable economic growth and development.”

MC 2013-03 also required GOCCs to submit for approval by the National Economic and Development Authority Board or its Investment Coordination Committee the public-private partnership projects they intended to undertake.

In repealing MC 2013-13, the GCG said “proposed development projects and major contracts of GOCCs lie within the sound business judgment of the respective governing boards of the GOCCs.”

“The governing boards are mandated by existing laws, rules and regulations to exercise extraordinary diligence in the conduct of the business and in dealing with the properties of their respective GOCCs,” the GCG said.

MC 2013-03 also contains provisions and processes that unnecessarily impede the timely approval and implementation of government projects, it said.
For PPP projects, the GCG said that “an appropriate policy is essential to guide the GOCCs in aligning with the Philippine Development Plan and thereby efficiently contribute to the nation’s economic growth.”