Press Release
September 9, 2010

Spare for now 'missionary' GOCCs

Government must have to bite the bullet for now and allow losing government-owned and controlled corporations (GOCCs) performing "missionary" services to continue flourishing amid their flunking revenue numbers.

"In purging non-performing GOCCs, we may have to take into account, albeit on a very limited basis, some state enterprises that were bestowed the unique mandate of delivering basic services to our people," Sen. Ralph G. Recto said in an interview over radio station DZMM.

"Not all GOCCs are there to make money but were chartered to make the lives of our people a little better," he added.

Recto stressed "missionary" GOCCs must be allowed to thrive despite incurring losses while the government ponders on better and long-range alternatives.

He, however, said "fat cats" in these missionary GOCCs must shed their indecent bonuses and perks "to reduce the national guilt of exempting them from the purge."

"Missionary GOCCs can be placed in a state-sponsored 'Intensive Care Unit (ICU)' as they perform their tasks and while economic doctors are thinking of a better cure," Recto, chair of the Senate ways and means panel and Senate finance vice-chairman, said.

"I may have to agree, with reservations of course, that among these 'necessary evils' are the National Food Authority (NFA), National Electrification Administration (NEA) and even the Local Water Utilities Administration (LWUA)," he said.

Recto said NFA plays a key role in stabilizing food supply such as rice, the NEA engages in energizing far-flung villages only reached by 'petromax' while LWUA delivers water services to areas where big business would not dare to thread.

He said the Philippine Postal Corp. (Philpost), which delivers snail-mail for our internet-resistant population, should be allowed to continue their "missionary" work despite losing money.

Recto said the government may also have to continue the operating losses of Metro Rail Transit and Light Rail Transit (MRT-LRT) in exchange of providing efficient and cheap mass transportation system to the commuting public.

Recto, meanwhile, said some crucial functions and manpower complement of GOCCs headed for the chopping block could be folded to existing departments and agencies to mine their experience and skills.

He said employees of GOCCs who will not be absorbed by other money-making GOCCs or departments should be paid with handsome severance packages commensurate to the length of their patriotic service.

"Let's give them what is due to them and even allow them to continue working in other government agencies," Recto said.

Recto nevertheless reiterated the designation of a "GOCC czar" who would oversee the performance of GOCCs and government financial institutions (GFIs) and ensure that dividends from their annual incomes are remitted to the national government.

"The GOCC czar will do nothing but to pressure GOCCs to perform at par and give out dividends at the end of each fiscal year," he said.

"Some GOCCs need adult supervision. It is time for the President to assign a Big Brother who would watch over their operations," Recto added.

Recto said the designation of a GOCC czar would be needed after the executive branch is finished ridding itself of losing and idle GOCCs and GFIs following the Senate's probe on the 'fat cats" in these government instrumentalities.

The DOF has estimated the existence of at least 736 GOCCs, fourteen of which are closely watched or monitored for being heavily dependent on subsidy or advances from the government.

At least 52 of these GOCCs have registered losses in 2008, according to DOF data, with the NFA posting the highest net loss followed by Light Rail Transit Authority, Napocor, Bases Conversion Development Authority, and Metropolitan Waterworks and Sewerage System.

Under the Dividends Law of 1994 - also known as Republic Act 7656 - GOCCs and GFIs are required to give half of their yearly income to the government to help raise funds for spending.

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