Credit Senators Franklin Drilon, Ralph Recto and Rep. Rufus Rodriguez (Cagayan de Oro). They’re trying to stem dissipation of taxpayer funds by government corporations gone amuck.
The tawdry example is Metropolitan Waterworks and Sewerage System. Officials, ladled themselves 25 bonuses every year, Drilon showed. Indeed, “greed is a tree that grows on arid soil,” an Ilokano proverb says.
Company officials concocted three types of Maligayang Pasko bonuses for themselves. But they penny-pinched in settling P451 million in IOUs for retired employees, Senator Recto noted. MWSS weaseled in paying only half of it’s P741 million debt with the National Treasury.
In Congress, Rep. Rodriguez filed In House Bill No. 2867. This would abolish 36 “underperforming” government-owned and -controlled corporations and government financial institutions Many of 120 GOCCs and GFIs were “unnecessary, underperforming and losing.”
Targeted were agencies we taxpayers never even heard of: These ranged from Banaue Hotel and Youth Hostel, Batangas Land Co, GY Real Estate Inc, National Precision Cutting Tools Inc. to something called ZNAC Rubber Estate Corp.
On my cluttered work desk are new Commission on Audit reports on 16 of these obscure firms. They include: Masagang Sakahan, Tacoma Bay Shipping Company to Pinagkakaisa Realty Corporation.
Samples: Pinagkakaisa closed shop in 2002. Eight years later, it still untangling contracts for occupation of its lots with GE Lighting Philippines. National Slipways Corporation hasn’t finished liquidation since it was padlocked in 1995. And on. And on. And on.
Rodriguez, meanwhile, notes that “in 2009 the pay of the key officials of all the 36 state firms totaled P57 million.” He is right. And so are Drilon and Recto. But are they only scratching the surface?
Part of the answer is found in another question: Just how many GOCCs and CFIs are we saddled with?
In her article “The Corporate Fat Cats”, the no-nonsense former National Treasure Leonor Briones wrote: This uproar started after President Aquino, in his State of the Nation Address, skewered the salaries of 41 officials from nine corporations..
“The list is incomplete,” Ms Briones pointed out . An earlier study reported that there were 163 GOCCs and subsidiaries. “The nine corporations are only the tip of the iceberg”.
In fact, “The Department of Finance estimates there are 736 GOCCs, says Asian Development Bank in documents that underpin a grant to improve these firms’ oversight ( Project No. 39606).
Definition of GOCCs is convoluted. But they boil down to four, namely: (a) those created by judicial decisions, like water districts; (b) assets sequestered during the Marcos regime – which Senator Ferdinand Marcos and sisters are assiduously trying to grab; (c) those acquired by public firms; and (d) those created by legislative charter.
In theory, the Finance Department oversees, through it’s Corporate Affairs Group (CAG), performance of the 736. “Effectively, however, only 14 corporations are closely monitored….”
These are firms that depend for equity, subsidy or advances or guarantees from national government. Aside from MWSS, the 14 include Local Water Utilities, National Food Authority, National Development Corporation Philippine National Oil Corporation to Philippine Ports Authority
The other 722 pretty much operate as individual fiefdoms. There is little done to stop local satraps from stealing the taxpayer blind. And they do. Most GOCCs are drowning in red ink.
President Gloria Macapagal Arroyo’s first term (2000 to 2004) funneled P80.4 billion into GOCCs. That windfall nothwithstanding, “there has been a noticeable increase in the aggregate deficit of the 14 monitored GOCCs, This brings their financial stability into question,” the ADB note cautions.
Expenses of the monitored 14 firms accounted for 6% of GDP. But their income shrank from 5% to 4.1%.of GDP. This torrent of red ink saw consolidated deficit of the 14 monitored GOCCs exceed four times their 2000 level.
Wait. There’s more. In 2004,the Garci tape controversy erupted. Few noticed then that “the 2004 deficit was already about the same size as the potential new revenues collected through the expanded value added tax.” The GOCCs, in short, handcuffed the country to an economic treadmill.
“Debt is a prolific mother of folly and crime,” parliamentarian Benjamin Disraeli once said. “The significant financial losses of the GOCCs contribute to the public sector debt,” the ADB paper points out. “National government’s combined outstanding debt and estimated off-balance-sheet liabilities increased by nearly P2.4 trillion from 1997 to 2003…Nearly half is attributable to GOCC activities.”
Could we put in our two cents worth? . Drilon and Rodriguez should consider asking their committees to direct the Finance Department to provide a copy of ADB’s final report on GOCCs. The bank submitted that document submitted to Finance on March 13 last year. The hard copy followed on March 27. Published findings could be invaluable for policy overhaul.
The “fat cat allowances” in Subic and MWSS butteresed overwhelming pubic support for overhaul of GOCCs. . The President Drilon, Rodriguez and others should not squander this window of opportunity.
Today’s probe ought to go beyond just nailing the GOCC piranhas. It should craft over all reform policy. As Mark Twain warned: “ I was seldom able to see an opportunity until it had ceased to be one.”