Comm. Rainier B. Butalid
9 October 2013

1. Size of the Philippine GOCC Sector
As of end-December 2012, there are 125 GOCCs under the
GCG jurisdiction :
• 71 with Special Charters
• 54 registered under the SEC
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2. GOCC Sector Profile
The 125 covered GOCCs have the following financial profile as of December 2012:
Total Assets : P5.134 Trillion or over US$125 Billion
Total Liabilities : P2.805 Trillion
Total Net Worth : P2.329 Trillion
Total Net Income : P224.144 Billion

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3. Classification of the 125 covered GOCCs
Classification
Government Financial Institutions
Trade, Area Development and Tourism
Educational and Cultural
Gaming
Energy and Materials
Agriculture, Fisheries and Food
Utilities and Information-Communications
Total
No. of GOCCs
33
29
8
2
15
16
22
125

Total Assets of the Government Corporate Sector (In Billion Php)
GOCC Sector
Government Financial Institutions
Trade, Area Development and Tourism
Educational and Cultural
Gaming
Energy and Materials
Agriculture, Fisheries and Food
Utilities and Information-Communications
Total
As of Dec. 2012
2,834
247
5
48
1,506
56
438
5,134
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• Significant number of GOCCs burdened by noncommercial functions and therefore needed government financial support
SUPPORT
Subsidy
Equity
2012 AMOUNT (IN BILLION PHP)
40.489
0.900
Net Lending 27.267
TOTAL 68.656
Source: Bureau of the Treasury (Amounts are exclusive of GOCCs outside the GCG’s coverage)

A N A CT TO P ROMOTE F INANCIAL V IABILITY AND
F ISCAL D ISCIPLINE IN G OVERNMENT -O WNED OR
–
C ONTROLLED C ORPORATIONS AND TO S TRENGTHEN
THE R OLE OF THE S TATE IN ITS G OVERNANCE AND
M ANAGEMENT TO M AKE T HEM M ORE R ESPONSIVE
TO THE N EEDS OF P UBLIC I NTEREST AND FOR
O THER P URPOSES
6

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Applicable to all GOCCs, GICPs/GCEs, and government financial institutions, including their subsidiaries, but excluding :
(a) The Bangko Sentral ng Pilipinas;
(b) State Universities and Colleges;
(c) Cooperatives;
(d) Local Water Districts;
(e) Economic Zone Authorities; and
(f) Research Institutions.

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1. Directors and Officers of GOCCs as fiduciaries of the State
2. Standard of Extraordinary Diligence
3. One (1) Year Term; with Holdover
4. Clear accountability of the CEO/Management to the Governing Board
5. Uniform Compensation System for all GOCCs
6. Power to Restructure the GOCC Sector

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A. Rationalization of the Government
Corporate Sector
B. Compensation and Position Classification
System (CPCS)
C. Performance Evaluation Systems
(Performance Scorecards)
D. Shortlisting of Prospective Appointive
Directors in GOCCs

The GCG has the power and function to ascertain whether a GOCC should be:
(a)Reorganized;
(b)Merged;
(c) Streamlined;
(d)Abolished; or
(e)Privatized
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(i) Implement the reorganization, merger or streamlining of the GOCC, unless otherwise directed by the President;
(ii) Recommend to the President the abolition or privatization of the GOCC, and upon approval of the President, implement such abolition or privatization.
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On GOCC Sector Rationalization
• Formally dissolved/liquidated 20 GOCCs in 2012
• Recommended for privatization 2 GOCCs
• Recommended for dissolution 15 GOCCs
• 25 GOCCs for dissolution by the end of 2013
• Number of GOCCs reduced from 145 in 2011 to 125 by the end of 2012 and will further be reduced to 100 by the end of 2013.
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COMPENSATION AND POSITION
Slide Title
• Shall apply to all officers and employees of
GOCCs whether under the Salary
Standardization Law or exempt therefrom.
• Any law to the contrary notwithstanding, no
GOCC shall be exempt from the coverage of the CPCS.
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COMPENSATION AND POSITION
Slide Title
• The Charters of each GOCC to the contrary notwithstanding, the compensation, per diems , allowances and incentives of the members of the Board of Directors/Trustees of GOCCs shall be determined by the GCG.
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COMPENSATION AND POSITION
Slide Title
On the Development of a Compensation and
Position Classification System (CPCS)
• Development underway with Towers Watson as the consultant;
• Objective is to provide a compensation system that is comparable to private sector that will allow GOCCs to attract the right talent;
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• Establish the performance evaluation systems which shall apply to all GOCCs.
• Performance Scorecards containing the following perspectives:
(a) Social Impact
(b) Stakeholders
(c) Finance
(d) Internal Process
(e) Learning & Growth
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• The GCG may recommend to the President, incentives for certain position titles in consideration of the good performance of the GOCC.
• GCG Memo. Circ. 2013-02
“Performance Evaluation System for the
GOCC Sector”
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On Performance Evaluation
• Entails the preparation by each GOCC of a
Performance Scorecard;
• Ensures adherence to mandate, and alignment to the Philippine Development Plan and the President’s
Social Contract;
• Development of Integrated Corporate Reporting
System (ICRS) for the GOCC Sector underway .
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• An Appointive Director shall be appointed by the President of the Philippines from a shortlist prepared by the GCG.
• GCG Memo. Circ. 2012-05
“Fit and Proper Rule for Appointive Directors and CEOs of GOCCs”
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O RGANIC D OCUMENTS
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1.
Ownership and Operations Manual for GOCCs a.
Provides for the Governing Principles and Objectives of the State as an
“Active Owner” of the GOCCs; b.
Defines the Role and Relationship of the State, its agencies and instrumentalities, visà-vis the GOCCs as “significant tools for national development”; c.
Provides for the roles and responsibilities of GOCCs and the Primacy of the
Boards of Directors/Trustees in the governance of the GOCCs; d.
Provides Guidelines the in the Monitoring and Evaluation of the GOCCs and their Governing Boards; e.
Provides for the Policy Framework for Tasking GOCCs to Undertake Non-
Commercial Activities.
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2. Code of Corporate Governance for GOCCs a. The Role and Responsibilities of the Governing Boards, and the Individual Directors; b. Disclosure and transparency requirements; c. Code of Ethics of Directors and Officers; d. Creation of Board committees and similar oversight bodies; e. Providing for an Integrated Corporate Reporting System; and f.
CSR Statement and the Role of Stakeholders.
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3. Fit and Proper Rule a. Primary mechanism through which the Commission ensures the integrity and competence of Directors/Trustees of GOCC Boards b. Codification of tried and tested standards already implemented by other agencies, with the qualification that the highest standard shall apply in the event more than one apply in a given situation
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Office of the Ombudsman
• All members of the Board, CEO, and officers of GOCCs shall be qualified by the Fit &
Proper Rule
• Persons with derogatory records as certified by the Ombudsman shall be temporarily disqualified from appointment in a GOCC.
(GCG Memo. Circ. No. 2012-05)
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Commission on Audit (COA)
• Restitution by a member of the Board or Officer of a
GOCC shall be made upon determination and report of the COA.
• The Chairman of the GCG may direct at any time a special COA audit of any GOCC.
• Permanent disqualification from appointment in a GOCC by virtue of a final and executory Notice of Disallowance.
• Directors and Officers Liability Insurance (DOLI)
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(GCG Memo. Circ. No. 2012-10)

Civil Service Commission (CSC)
• The CPCS shall consist of classes of positions grouped into such categories as the
GCG may determine.
• Involves the allocation of proper position titles and salary grades.
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Securities and Exchange Commission (SEC)
• The SEC shall not register the articles of incorporation and by-laws of a proposed
GOCC or Related Corporation, unless the application for registration is accompanied by an endorsement from the GCG stating that the
President has approved the same.
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1. Dividends remitted significantly higher; Number of
GOCCs remitting also increased
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GOCCs
2010
25
2011
35
2012
39
2013
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2. Better delivery of social services a.
Civil Aviation Authority of the Philippines (CAAP) – effectively addressed aviation industry safety concerns resulting in the lifting of the EU ban on Philippine carriers on July 2013 (initially for PAL). b.
National Electrification Administration (NEA) – successfully implemented the Sitio Electrification Program (at present, already
77% energized).
c.
National Housing Authority (NHA) – delivered the AFP/PNP
Housing on time and within budget.
d.
Philippine Health Insurance Corp. (PHIC) – increased enrollment rate to 81% of the population from only 62% in 2010; also introduced more health packages.
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3. Improved financials a.
Metropolitan Waterworks and Sewerage System (MWSS)
(In P Millions)
Net Income (Loss)
Dividends / Other Remittances b.
GOCC Sector Net Income
GOCC Sector
Government Financial Institutions
Trade, Area Development and Tourism
Educational and Cultural
Gaming
Energy and Materials
Agriculture, Fisheries and Food
Utilities, Information, Communications
TOTAL (P Billions)
2010
(34)
0
2010
125,212
(1,981)
(329)
2,753
8,929
(22,789)
(1,960)
109,834
2011
333
150
2011
133,834
1,250
(341)
4,706
7,892
(18,597)
(1,462)
127,282
2012
1,980
345
2012
161,991
7,546
(186)
4,718
35,444
1,917
12,714
224,144
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Slide Title
31
3/F Citibank Center
Paseo de Roxas, Makati City, Philippines 1226
Tel No. (632) 328 2030 to 33
Fax No. (632) 328 2030 loc 204