Press Release
February 19, 2008

Angara to GOCCs: with more state subsidy comes more responsibility

Senator Edgardo Angara today said that government owned and controlled corporations (GOCCs) should be more accountable in their operations, especially since the government has nearly doubled their subsidy.

Government has increased government subsidy to GOCCs and government financial institutions by 98 percent, from Php13.81 billion in 2006 to Php 27.33 billion in 2007.

This amount is up by Php8.92 billion from the programmed subsidy of Php18.41 billion for 2007, and was intended to pump prime the economy ahead of a possible US economic recession.

"With more state subsidy comes more responsibility," said Angara.

According to Angara, the huge government funds being extended to GOCCs and GFIs make it more imperative for a formal mechanism to be institutionalized in the review and analysis of their budgets.

"This is to ensure that they are consistent with the national development plan and also to assure transparency in the operations of said corporations," he said.

In this light, Angara has filed a bill amending Section 13 of Presidential Decree No. 1177, otherwise known as the "Budget Reform Decree of 1977." In addition to the annual budget of the national government which the President is required to submit to Congress (the basis for the enactment of a General Appropriations Act), it shall also include in its budget submission the proposed corporate operating budgets of government-owned or controlled corporations, their subsidiaries and affiliated companies, which require national government budgetary support.

This bill also requires these GOCCs to submit to Congress separate and yearly financial performance reports vis-a-vis their approved budgets, as well as status reports on obligations they have entered into which are backed by government guarantees.

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