By Cyril John Barlongo
PRESIDENT Aquino is confident that when he leaves office in 2016, his accomplishments will far outweigh the developments that have taken place before he assumed the presidency.
Among his accomplishments is the enactment of Republic Act (RA) 10149, or the Government-Owned or -Controlled Corporations (GOCC) Governance, Act of 2011, to promote financial viability and fiscal discipline in GOCCs and to strengthen the role of the state in its governance and management to make them more responsive to the needs of public interest and for other purposes.”
The Act recognizes the potential of the GOCCs to fast-track economic development and to promote inclusive growth in the country. The law mandates the creation of the Governance Commission for GOCCs (GCG) as a central advisory, monitoring and oversight body, with authority to formulate, implement and coordinate policies to the GOCCs, government instrumentalities with corporate powers and government corporate entities and government financial institutions, including their subsidiaries.
Recently, the GOCCs held their annual ceremonial turnover of dividends or dubbed as the GOCCs Dividends Day, at the Rizal Hall of Malacañan Palace. During the turnover rites, which started in 2010 by the Department of Finance, 49 GOCCs this year turned over P36.86 billion in dividends to the National Treasury for 2014. President Aquino said the GOCCs have the potential to double their remittances to P160 billion in five years, from P84.18 billion generated in nine years.
Under RA 7656, also known as the GOCC, or “An Act Requiring Government-Owned or-Controlled Corporations to Declare Dividends Under Certain Conditions to the National Government, and For Other Purposes”, GOCCs must declare and remit at least 50 percent in dividends of its annual net earnings to the national government.
“Mukhang sigurado na tayo. Pero ’pag nag-relax kayo, mukhang mapapako ’yung pangako ko. Kaya pakiusap ko ho, huwag kayong mag-relax. Baka puwedeng dagdagan pa natin ang kayod,” President Aquino reminded the GOCCs not to be complacent to hit the goal next fiscal year. “Ang pakiusap ko po, huwag tayong titigil; huwag tayong makontento sa nagawa na; mag-isip pa tayo ng paraan para ba lalong mapaganda ’yung iiwan nating biyaya, pakinabang, serbisyo sa taumbayan na siya namang lumikha at talagang tumatangkilik sa atin at sumusuporta sa atin.”
Under the leadership of President Aquino, his administration was able to raise P131.28 billion from 2010 up to the present, surpassing the P84.18 billion of remittances collected from 2001 to 2009 by his predecessor.
“Having said all of these, pinangako ho natin sa umpisa, pagbaba natin sa puwesto—which will happen a year and a month from now—di-hamak na mas maganda ang makikita natin o maiiwan nating sambayanang Pilipinas kaysa dinatnan natin,” President Aquino added.
Led by their respective chairmen and CEOs the GOCCs handed over checks to President Aquino. The Tourism Infrastructure and Enterprise Zone Authority was not able to attend the ceremony.
The GOCCs Dividends,, Day was created to recognize government-run companies for their achievements and significant contributions to the country’s national development. Among the GOCCs, LandBank of the Philippines (LandBank) has the highest dividends, at P6.254 billion, representing 51 percent of its total earnings in 2014.
“LandBank is once again honored to have contributed the highest cash dividends from our robust earnings in 2014. We are pleased to be able to take part in the government’s revenue-generation initiatives to expand developmental projects and social services to Filipinos,” said Executive Vice President Andres Sarmiento, who represented LandBank during the turnover ceremony in Malacañang.
Sarmiento were joined by LandBank directors Tomas de Leon, Crispino Aguelo and, Victor Gerardo Bulatao, and EVP Rabboni Francis Arjonillo.
The steady profitability of LandBank allows it to continuously strengthen its development financing programs. It remains the biggest credit provider for small farmers, fishermen, local government units, and is the biggest lender to microenterprises and small and medium enterprises among government financial institutions. LandBank is also the only bank present in all of the country’s provinces, with a nationwide network of 352 branches and 1,371 automated teller machines as of April 2015.
LandBank posted a P3.6-billion net income in the first quarter of this year. Despite the slight increase from the P2.9 billion released in the same period last year, the LandBank exceeded its first-quarter target income of P3.12 billion by 15 percent.
The Philippine Amusement and Gaming Corp. (Pagcor), on the other hand, has the highest total remittances, including dividends, reaching P10.137 billion. Total cash dividends this year amounted to P5 billion, after nearly three decades of service; while its net income amounted to P5.1 billion.
Pagcor Chairman and CEO Cristino Naguiat Jr. said the P5 billion is “the biggest amount in a single check ever issued by our corporation in its history.”
Naguiat also said Pagcor remains to be the No.1 nontax-revenue source of the Philippine government. “We generate income from our gaming and regulatory operations,” he said.
The biggest revenue generators of the government are the Bureau of Internal Revenue and the Bureau of Customs, which collects taxes and custom duties.
“Pagcor’s shareholders are the Filipino people. We are giving back to them the fruits of a well-run GOCC,” Naguiat said.
“Under our watch, we will continue to ensure that Pagcor’s revenues will go where they are purposely intended—that is, to nation-building and to the Filipinos. Through transparent leadership and judicious use of funds, we will continue to embark on long-term corporate social responsibility programs. Foremost of which is the ongoing schoolbuilding projects in public schools. We want to leave to the youth a legacy that will benefit many generations to come,” he added.
Pagcor turned over P7 billion to the Department of Public Works and Highways (DPWH) and the Department of Education (DepEd) for the construction of thousands of classrooms in public schools nationwide.
Pagcor recently allocated an additional P3-billion fund with the DepEd and the DPWH for “Matuwid na Daan sa Silid-Aralan” schoolbuilding program. Pagcor’s total funding for its schoolbuilding program are amounted to P10 billion.
“We embarked on this project almost five years ago, bearing in mind President Aquino’s directive to us to help address the basic problems of the education sector, like the lack of classrooms. The P10-billion allocation for the schoolbuilding project is the biggest funding ever provided by our agency for a single project in Pagcor’s history,” Naguiat said.
The rest are joined by eight more GOCCs in the top 10 or the so-called Billionaires’ Club—an elite class of contributors that have declared at leastP1 billion in dividends. Billionaires’ Club in this year’s remittances include the Bases Conversion Development Authority (BCDA), P3.201 billion; Development Bank of the Philippines, P3.135 billion; Food Terminal Inc., P2.305 billion; Philippine Deposit Insurance Corp., P2.1 billion; Philippine Ports Authority, P1.822 billion; Philippine National Oil Co., P1.525 billion; Manila International Airport Authority, P1.339 billion; and Philippine Reclamation Authority with P1.2 billion.
Mr. Aquino also commended the Government Service Insurance System (GSIS) for its financial performance in the last five years his administration. Based on the data President Aquino provided in his speech, GSIS income last year reached P131 billion from P64 billion, in 2010. Its assets, meanwhile, amounted to P910 billion from P506 billion, in 2010, and claims and benefits, from P46 billion in 2010, reached P84 billion last year.
GSIS President Bernie Vergara and his whole team were applauded during the rites, and were considered as “success stories” of President Aquino.
The President then directed Finance Secretary Cesar V. Purisima, Budget Secretary Florencio B. Abad and GCG Chairman Cesar L. Villanueva to review executive bonuses of the GOCCs.
“Dahil in our interest to make you more efficient, baka naman kayo ang nakalimutan. Pinasaya n’yo ’yung bansa, baka kayo naman ang pinalungkot nang todo-todo,” Mr. Aquino stated. In about a month’s time, according to President Aquino, the review “will seek to maximize the benefits accruing everybody, as empowered by the pertinent laws.”
CNN Philippines—sister company of BusinessMirror—reported that the 2013 Commission on Audit (COA) Report on Salaries and Allowances revealed “irregular” allowances and benefits given to government officials.
CNN Philippines reported that some items appeared “too personal and unusual,” such as:
- Communication allowance;
- Combat pay;
- Cultural clothing;
- Family allowance;
- High-roller allowance;
- Pet expense;
- Child’s birthday gift;
- Car plan;
- Flying pay;
- Housing fund;
- Recording minutes;
- All Saints’ Day financial assistance;
- Grocery;
- Food and rice allowance;
- Filipiniana; and
- Year-end grocery allowance;
On the other hand, GCG Spokesman Paolo Salvosa said, “The bases for the amount of the salaries, perks, and benefits are patterned after what officials in private-sector companies are getting.”
However, the President cited efforts to reform and professionalize the GOCCs, such as closing down inefficient government companies, to provide the needs of Filipinos.
“Kayo po, na mga kabilang sa GOCCs, dapat naman talagang palakpakan ang bawat isa sa inyo na talagang tumulong din sa pag-rerepormang ‘to, na talagang nagpakita kung ano ang puwedeng mangyari at dapat sanang nangyari mula noong umpisa pa” President Aquino said.
Other GOCCs that turned over dividends were APO Production Unit Inc., with P2 million; Authority of Freeport Area of Bataan, P11 million; Batangas Land Co. Inc., P2 million; BCDA Management Holdings Inc., P630,000; Cagayan Economic Zone Authority, P200 million; Clark Development Corp., P400 million; Cebu Port Authority, P113 million; Kamayan Realty Corp., P1 million; Laguna Lake Development Authority, P14 million; LBP-Insurance Brokerage Inc., P41 million; LBP-Leasing Corp., P72 million; LBP Resources and Development Corp., P8 million; Local Water Utilities Administration, P87 million; Mactan-Cebu International Airport Authority, P162 million; Masaganang Sakahan Inc., P6 million; Metropolitan Waterworks and Sewerage System, P265 million; National Electrification Administration, P203 million; National Home Mortgage and Finance Corp., P12 million; National Housing Authority, P63 million; National Irrigation Administration, P11 million; National Livelihood Development Corp., P80 million; National Power Corp., P150 million; National Development Co.-Philippine Infrastructure Corp., P1 million; Philippine Aerospace Development Corp., with almost P2million; Philippine Crop Insurance Corp., P100 million; Philippine Economic Zone Authority, P510 million; Philippine Fisheries Development Authority, P33 million; Philippine Retirement Authority, P144 million; Philippine Sugar Corp., P20 million; Philippine Veterans Investment Development Corp. Industrial Authority, P52 million; Pinagkaisa Realty Corp., P330,000; Philippine National Oil Co. Exploration Corp., P750 million; Small Business Corp., P27 million; Social Housing Finance Corp., P59 million; Subic Bay Metropolitan Authority, P167 million; Sugar Regulatory Administration, P780,000; Tourism Infrastructure and Enterprise Zone Authority, P300,000; and Trade and Investment Development Corp., with P54 million.
Subsidies to GOCCs
To support initiatives and reforms led by the GOCCs, the national government increased their subsidies in the first three months of this year.
As of the first-quarter 2015, subsidies to the GOCCs jumped by 200 percent to P3.69-billion, from the 1.22 billion recorded in the same period last year. The majority of the P3.69-billion budget this year was given to nonfinancial government corporations, amounting to P1.56 billion, while government financial institutions received only P250 million. However, the remaining P1.88-billion funds were given to other government corporations.
National Electrification Administration, the biggest beneficiary, received P731 million; Philippine Children’s Medical Center, P607 million; National Irrigation Administration, P406 million; Philippine Postal Corp., P301 million; National Home Mortgage Finance Corp., P250 million; National Power Corp., P164 million; Philippine Heart Center, P159 million; Local Water Utilities Administration, P151 million; Tourism Promotions Board, P125 million; Philippine Rice Research Institute, P121 million; Philippine National Railway, P106 million; and the National Kidney and Transplant Institute, P103 million.
Last year the government allocated P80.44 billion in subsidies to the GOCCs, higher than what was given in 2012 and 2013, which amounted and P42.64 billion and P66.33 billion, respectively.
Initiatives from GOCC remittances
To support the social-welfare programs of the government, especially the rehabilitation of the areas affected by Supertyphoon Yolanda in the Visayas, the Department of Budget and Management recently announced that P15.9 billion was allotted to support its housing projects.
The fund for these housing initiatives also came from the remittances of the GOCCs. According to Budget Secretary Florencio B. Abad, “growing efficiency of the GOCCs” is the reason for extended support, and such funds will help the communities affected by the typhoon.
Abad said the majority of the funds, or P11.6 billion, will be allocated for the Emergency Shelter Assistance of the DSWD. The remaining P4.31 billion will be given to the National Housing Authority Yolanda-affected areas for the construction of permanent houses.
Abad also said that families with no permanent source of income or below the poverty thresholds of their respective regions will be benefited in the housing assistance of the DSWD.
Under this housing-assistance program, a P30,000 financial assistance will be given to each family or individual beneficiary if their houses were totally destroyed. However, those homes that are partially damaged, or individuals or families sharing or renting their shelter, are deemed to require assistance.
The good governance of President Aquino is the result of this impressive financial performance, Abad said.