FINANCE SECRETARY Carlos G. Dominguez III said the Governance Commission for government-owned and -controlled corporations (GCG) needs to improve its oversight over state-run firms.
Mr. Dominguez noted discrepancies in some assessments made by the GCG, saying that its report “contrasts sharply” with the assessment made by the Insurance Commission, which recently reviewed government-owned insurance companies.
“I have noticed the incongruence between the evaluation made by the GCG against those made by regulatory agencies. This should not be the case,” he told the GCG last week. A copy of his speech was released over the weekend.
“The discrepancies could cause confusion among the regulated and reviewed state enterprises. More seriously, they could bring forth errors in policy for the government,” he added.
He also flagged poor analysis of GOCC (government-owned and -controlled corporation) financial statements, after finding that some GOCCs received high ratings even if they failed to comply with accounting and reporting standards.
“You have actually rated some of the government insurance companies very highly when in fact they do not adhere to international standards of accounting and reporting. This, I think, is a failure not only of CoA (Commission on Audit) but also of the GCG. So, I urge you to strengthen your ability to analyze the financial statements of each and every GOCC,” Mr. Dominguez told GCG.
He said the commission needs to consider the assessments made by other agencies conducting regular reviews on the state-run firms.
Mr. Dominguez said dividends remitted by GOCCs have averaged P57 billion yearly under the Duterte administration, more than double the remittances achieved by the previous government.
Last year, the government asked GOCCs to remit their dividends early to boost available funds to deal with the pandemic. It collected a record P157 billion in 2020, up 127%.
Mr. Dominguez said the Department of Finance is ready to help the GCG improve GOCCs, which he believes should “transform into sustainable business units.” State-run companies also have to be “prudent” in using the subsidies they receive from the government.
The government subsidizes GOCCs to cover operational expenses that they cannot finance with their own revenues. Subsidies to GOCCs hit P35.26 billion in the four months to April, down 38% year on year.
“The government corporate sector is an important tool for economic growth and development. GOCCs are expected to perform government and business functions, and fulfill their mandate to provide essential services to the Filipino people,” he added. — Beatrice M. Laforga