Move to abolish obsolete state firms gains ground

THE Aquino administration has formed a body that would look into which obsolete government owned and controlled corporations (GOCCs) would be abolished in line with efforts to rein in its budget deficit.

Department of Budget and Management (DBM) Secretary Florencio Abad said the country’s economic managers have agreed to form a technical working group (TWG) that would look into the financial performance of each GOCC and government financial institution (GFI).

“They would likewise be subjected to scrutiny so as to determine which among the GOCCs are viable and could still be converted into a financially strong institution or [which] are already obsolete and even incur further burden on the national government,” Abad said, adding that, “In which case, they would have to be abolished.”

The DBM chief said that even those state firms that have their own charters would also be covered by the review and assessment of the TWG.

At present, the country has 158 GOCCs. Including water districts, the number would rise to 736.

The TWG would be organized by virtue of an executive order (EO) that would come out this week.

The key component of the proposed EO is the reactivation of the Government Corporate Mo-nitoring and Coordination Committee (GCMCC) or a similar centralized entity whose functions include reviewing the strategic maps and performance commitments of GOCCs.

Among the directives of the said EO is beefing up the Department of Finance’s Corporate Affairs Group, which Undersecretary Jerimiahs Paul heads.

The group would then serve as a secretariat in the implementation of reforms, even as decision making remains with the Cabinet.

The EO would likewise direct GOCCs and GFIs to prepare strategic priorities and performance commitments that are in line with the programs of the Aquino administration.

The Palace directive would also define the role of the boards of GOCCs, as well as put in place more rigorous entry qualifications for new appointees such as integrity, proven competence and experience.

The proposed order seeks to adopt improved reporting and disclosure standards in a bid to make government entities at par with the private sector in terms of transparency, good governance and best practices.

Finance Secretary Cesar Purisima is likewise scheduled to submit a report on the review of GOCCs and GFIs to the House of Representatives next month.

He said that all GOCCs would have to shape up and make themselves least burdensome to the government by pursuing financial independence. GOCCs that would fail to improve would have to face the chopping board, the finance chief said. –Katrina Mennen A. Valdez Reporter, Manila Times