GCG stands for “Governance Commission for Government-Owned and -Controlled Corporations,” or GOCCs for short. We should know more about GCG because it is a fine example of how professional executives and staff can do well in a government agency. Perhaps, partly, it’s because all GCG employees are fresh recruits without the stale habits of old bureaucrats. GCG takes its mission seriously:
“The GCG is an efficient and effective central advisory, oversight and monitoring body with authority to formulate and implement policies in the active exercise of the State’s ownership rights over GOCCs, thereby ensuring their financial viability and fiscal discipline, through adherence to the highest standards of corporate governance.”
By 2020, their vision statement declares, “the GCG shall have transformed the GOCC sector into a significant tool of the State in the attainment of inclusive economic growth and development.”
We might recall that President Aquino had revealed in a State of the Nation Address the abuses of some GOCCs whose boards compensated themselves scandalously, pointing out the abominable example of Metropolitan Waterworks and Sewerage System. This prompted the quick enactment of Republic Act 10149 that created GCG as the agency to implement reforms in the public corporate sector.
The GCG 2015 annual report is not out yet, but its 2014 annual report provides enough evidence that much has been achieved since October 16, 2011 when GCG was constituted.
A quick performance indicator might be to look at the reduced number of GOCCs: 140 in 2011, down to 102 in 2012. The reasons for abolishing some GOCCs were basically because they were losing money or had redundant or duplicating functions; were no longer cost efficient; were no longer achieving objectives; or were nonoperational. Some were doing activities best carried out by the private sector.
From the abolition of operational GOCCs, the estimated annual cost savings amount to P1.27 billion. From the liquidation of nonoperational GOCCs, the estimated amount for redistribution to various government agencies or priority projects was P2.7 billion. An interesting item: The National Agribusiness Corp. which was used as a conduit for the release of Priority Development Assistance Fund to non-governmental organizations linked to the PDAF scam, had operated at a cumulative loss from P0.98 billion in 2007 to P1.70 billion in 2011! Nobody was watching!
From a financial overview, GCG reports that: “The contribution of the GOCC sector to the economy remains significant as total GOCC revenues increased from P641 billion in 2010 to P908 billion in 2014, or 7.59 percent of the 2014 GDP, or $272.02 billion…. Total comprehensive income from operations rebounded from P134 billion in 2013 to P257 billion in 2014 with 75 percent of GOCCs posting a net profit.”
It would be a very narrow way of evaluation, of course, to look at the GOCC sector simply from a financial viewpoint. Rationalizing the GOCC portfolio has involved the introduction of “structural reforms designed to steer GOCCs toward responsible, transparent and accountable governance as the foundation for delivering sustainable and breakthrough results.”
We identify just two examples: the introduction of the “balanced scorecard” as the official platform for results-based management; and the adoption of a position classification and compensation structure for universal application to GOCCs. These are very important components to reforming GOCCs to management effectiveness.
This piece is a bit tedious reading, but we do wish to underscore—there are a lot of good things going on at GCG. And we must give credit to the leadership there, Chairman Cesar L. Villanueva and the two commissioners, Rainier B. Butalid and Ma. Angela E. Ignacio.