Press Release
February 26, 2010

Villar: State firms no dumping ground

Government corporations should stop being a dumping ground of political allies of the party in power and should be managed by professionals with a turnaround plan so they will stop bleeding money.

In the wake of reports that state firms siphoned off P17.4 billion from the coffers last year in subsidies, Villar said if elected he will only name managers with proven track record to the directorships of these companies.

Villar said he will require government nominees to boards of government corporations to sign a performance contract before they take their seat.

"Their tenure will depend on their being able to meet their promised outputs," he said, adding that the government he will lead "will not hesitate to fire those who perform below par."

Directorships should be contingent on the ability to deliver on tasks assigned to them, he said.

While acknowledging that some state firms are built to lose money due to their social mandate, this, however, is not a license for their managements not to minimize the hemorrhage.

"There are corporations which were organized not to post profit but render public service. I recognize it. But let me also point out that there is nothing in their charters, which authorize them to lose money wantonly," he said.

Villar said people whose agenda is to "milk and not manage" state firms will not be allowed to join their management no matter who and many their backers will be.

"The Arroyo administration has been remiss in its obligation to spend wisely. Government has no business being in business especially if it will have to subsidize state firms with billions of pesos in dole-outs," Villar stressed.

The NP presidential bet, a successful entrepreneur who built a business empire from scratch, said the government should immediately trim subsidies to GOCCs and sell off entities that do not directly provide basic commodities or services.

In 2004 there were 133 GOCCs. A World Bank study identified access to subsidies and guarantees as reasons for the poor performance of state firms in general.

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