San SebastianCollege Recoletos de

Cavite, Inc.
College of Accountancy, Business Administration and Hospitality Management

Government Owned and Controlled Corporations: Their

Impact on the Philippine Government and Economy
(A Synthesis )

In partial fulfillment of the requirements for the

Degree of Bachelor of Science in Accountancy

SUBMITTED BY

Kristalene Joyce S. Cruz

BSA4

Government Owned and Controlled Corporations: Their Impact on the

Philippine Government and Economy
SUBMITTED TO

MRS. SOL TANFELIX-TUBAY

Abstract

The role and significance of the government corporate sector on the financial position of
the Philippine Government and Economy remain to be important and influential up to
this day. The Government Corporations are established for specific purposes and with
specific mandates to help address market failures. Consequently, many of these
enterprises operate inefficiently and become a huge drain on the states finances, as
well as, some of them were linked to the alleged misuse of the pork barrel or Priority
Development Assistance Fund (PDAF) of lawmakers. This paper provides a synthesis
on the basic information about the Philippines government-owned and controlled
corporations (GOCCs) and the context on whether there is a need to abolish them or
just create reforms to improve their performance. Undertaking reforms on these
enterprises necessitate not only a substantial amount of time and finances, but also a
well-built institutional capabilities and political will. The actions on making decisions for
these corporations are complicated since they are made to enhance the social welfare
of the country.

Government Owned and Controlled Corporations: Their Impact on the

Philippine Government and Economy

INTRODUCTION
Regardless of restructurings undertaken in the past, according to the Commission on
Audit, there remain around one hundred thirty three government-owned and controlled
corporations

(GOCCs)

operating

in

the

areas

of

agriculture,

transportation,

infrastructure, public utilities, provision of housing, industrial development and finance.

The dismal performance of many of these corporations has contributed to the fiscal
deficits of the public sector.
As an institution tasked to conduct oversight on GOCCs, the Senate has a crucial
role in the effort to institute the necessary reforms in this sector. Hence, the Senate
should be equipped with pivotal information that will help the Senators to better
assess GOCC performance and its over-all role in the economy. In this regard, the
Senate Economic Planning Office (SEPO) has embarked on a research project titled,
A Profile of Selected Government-Owned and -Controlled Corporations (GOCCs)
with funding support from the United Nations Development Program (UNDP)
under its Programme on Fostering Democratic Governance. Specifically, the study
establishes a baseline database on the operations and financial status of 16 selected
GOCCs for a six-year period, 1999 to 2004. It also takes a look at governance
practices of these corporations to gain insights on how best to improve their
performance.

Government Owned and Controlled Corporations: Their Impact on the

Philippine Government and Economy
This study is SEPOs contribution to the ongoing search for the right policy mix to
enhance the countrys fiscal position. The staff of SEPO undertook and completed
this research with inputs from Ms. Mercedes B. Suleik, project consultant, and the
cooperation and support of the selected GOCCs key officers and staff, who
provided vital information on their respective corporations. I deeply appreciate the
commitment and hard work of the SEPO officers, as well as the research and
support staff assigned to this project, without whom this would not have been
completed.

Key words: Corporate Social Responsibility, Customer Satisfaction, Firm Value,

Financial Performance, Reputation.

References:

Government Owned and Controlled Corporations: Their Impact on the

Philippine Government and Economy