By Charissa Luci-Atienza, October 26 2018; Manila Bulletin


Image Credit to Philippine Daily Inquirer

The National Economic Development Authority (NEDA) has expressed reservation over the proposed abolition of the Governance Commission for Government-Owned and Controlled Corporations (GCG), citing its “indispensable role” in improving market efficiency and promoting consumer welfare.

Socioeconomic Planning Secretary Ernesto Pernia said GCG continues to play an important role, especially in ensuring that there is a level playing field among the GOCCs and the private firms.

“We commend the intention to address bureaucratic layer concerns in government as this would lead to more efficient and effective delivery of services to the public. However, we have reservations about abolishing the GCG as it has an indispensable role to play in improving market efficiency and consumer welfare, ” Pernia said in a two-page position paper submitted to South Cotabato Rep. Jesus Sacdalan, chairman of the House Committee on Government Enterprises and Privatization.

He noted that there are GOCCs that provide the necessary goods and services in the absence of private providers, which could sometimes constrain the entry of potential private players that may provide high or better quality goods and services.

“It is in this light that we deem it necessary for an institution like the GCG to intervene and uphold the principles of competitive neutrality to ensure a level playing field where there will be fair competition among GOCCs and the private firms, ” Pernia said.

“Likewise, the GCG has a key role as it conducts subsidiarity analyses on GOCCs to review their mandates and determine their relevance,” he added.

He cited that in some countries, corporate governance of GOCC is given premium where effective legal and regulatory framework is identified as a necessary tool to ensure a level playing field.

“In this framework, the existence of an overseer like the GCG espouses accountability, ensures financial viability of GOCCs and adherence to applicable laws and regulations, prevents conflict of interest, and balances competing demands on the GOCCs,” Pernia said.

In a 16-page position paper submitted to the House Committee on Government Enterprises and Privatisation,GCG Chairman Samuel Dagpin Jr. and Commissioners Michael Cloribel and Marites Doral said the functions of GCG “does not overlap with the functions of other agencies”, including the Commission on Audit (COA), National Economic and Development Authority (NEDA), Government Procurement Policy Board (GPPB) and the Office of the government Corporate Counsel (OGCC).

“The GCG has no overlapping functions with COA, in terms of accounting and expenditure of funds and properties of the government; NEDA, in terms of economic development and planning, and joint venture activities; GPPB, in terms of all its procurement projects; and OGCC as the statutory counsel of all GOCCs,” they said.