MANILA, Philippines – The Aquino administration can improve the performance of government-owned and controlled corporations (GOCCs) by ensuring a stricter oversight on these agencies, a government think-tank said.
According to a recent study by the Congressional Policy and Budget Research Department (CPBRD), Congress, the Commission on Audit, the Department of Budget and Management and the newly created Governance Commission for GOCCs should “maintain a close watch on these corporations.”
Citing data culled from the respective agencies, CPBRD said that some GOCCs continue to incur huge debts.
It noted that from 2007 to 2009, nine GOCCs were found to have the largest amount of indebtedness.
These are the Light Rail Transit Authority (LRTA), the Bases Conversion Development Authority (BCDA), the Metropolitan Waterworks and Sewerage System (MWSS), the National Electrification Administration (NEA), water districts, the Philippine Regulatory Agency (PRA) and the Philippine Ports Authority (PPA).
The think-tank noted that there is a need to do this to ensure that the resources being spent on state enterprises will not undermine the government’s fiscal condition.
“The financial position of each GOCC is crucial in gauging its financial viability – a necessary condition for continued operation and quality of public service delivery. In a country like the Philippines which is characterized by shallow capital markets and very modest market competition, the role of GOCCs will continuously be important,” the CPBRD said.
Multilateral lending institutions such as the World Bank and the Asian Development Bank have been urging the government to continuously review the performance of GOCCs as some have been a huge strain on government coffers.
The recently approved GOCC Governance Act seeks to strengthen the role of the state in ensuring fiscal discipline among GOCCs and in making them more responsive to the needs of the people.
Under the law, the Governance Commission for GOCCs would conduct periodic study, evaluation and assessment of the performance of these state agencies.
According to CPBRD, there are 659 GOCCs as of December 2009. Of these, 73.6 percent are local water districts. Because of the huge size of the sector, the government has limited the strict monitoring of GOCCs on 14 agencies. These are the LRTA, LWUA, PPA, BCDA, Home Guaranty Corp., National Food Authority, National Housing Authority, National Irrigation Administration, National Power Corp., Philippine Economic Zone Authority, Philippine National Oil Company and the Philippine National Railways.
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By: Iris C. Gonzales
Source: The Philippine Star, Sept. 8, 2011
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