Press Release
September 14, 2010


A third of the government expenses for salary, maintenance and other operating expenses (MOOE) and capital outlays is appropriated to 14 government-owned and controlled corporations (GOCCs) being closely monitored by the government, Senator Franklin Drilon said Tuesday.

Drilon, chairman of the Senate Finance Committee, said P532.25 billion is being spent by the government to 14 GOCCs in 2010, as against total new appropriations less the automatic appropriations of P909.28 billion.

"One-third of the total expenditure in the entire government would go to the GOCCs, and yet they have gone on their merry way, they have been their own Congress, they have been their own BIR and Finance and they have been their own department," Drilon told a budget hearing.

"It's about time that we take a serious look on such a huge portion of our national expenditure program which is not monitored. Nobody is looking into these GOCCs with much detail," he said.

The 14 monitored GOCCs include the National Food Authority, National Irrigation Administration, National Electrification Administration, power companies National Power Corp., Power Sector Assets and Liabilities Management Corp. and National Transmission Corp. (counted as one), Philippine National Oil Co., National Housing Authority, Local Water Utilities Administration, Metropolitan Waterworks and Sewerage System, National Development Corp., Light Rail Transit Authority, Philippine Economic Zone Authority, Philippine National Railways, Philippine Ports Authority and Home Guaranty Corp.

Comprising the outlay of 14 monitored GOCCs for 2010 are personal services, P11.95 billion; MOOE, P444.72 billion; and capital outlays, P75.59 billion.

On the basis of these findings, Drilon said his committee will craft a remedial law called Public Enterprise Governance Act of 2010, which will also establish a council that will monitor and review the operations of 157 state-owned firms, as a result of the hearings on the unwarranted and obscene bonuses and allowances being enjoyed by the governing boards of state-run enterprises.

The proposed Government Corporate Monitoring and Coordinating Council, which came into existence in 1984 but was dissolved in 2001, would have the authority to merge or abolish various GOCCs, impose standards of performance for the appointment of the board of directors, and come up with a review of the salary structure of GOCCs.

Finance Secretary Cesar Purisima also suggested that the monitoring body should cover 588 water districts and electric cooperatives because "they represent contingent liabilities of the government."

"We need a strong law in order to put a stop on these practices that have gone haywire," Drilon said.

Total assets of all GOCCs stood at P4.29 trillion in 2008, compared with P3.85 trillion in 2007, but Drilon said that 43% of the national debt is owed to creditors because of the GOCCs.

Drilon said his committee is eyeing the Budget and Finance departments and the National Economic Development Authority as members of the monitoring body, and will include "private sector participation" such as the Institute of Corporate Directors and the Management Association of the Philippines.

He said the committee is now readying its report for submission in plenary before sessions adjourn on October 15.

"Hopefully by the first half of next year, we should have a law already in place," he said.

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