Abolition of dormant GOCCs OK’d

MANILA, Philippines - President Aquino approved the abolition of non-performing and dormant government-owned or controlled corporations following a recommendation of the Governance Commission for GOCCs (GCG).

The seven GOCCs approved for abolition include two subsidiaries of the Philippine National Oil Co. (PNOC), the state-owned company tasked to develop the country’s oil resources.

These are PNOC Alternative Fuels Corp. (PNOC-AFC) and PNOC Development and Management Corp. (PNOC-DMC).

Other GOCCs approved for abolition are the Alabang-Sto. Tomas Development Inc. (ASDI), DISC Contractors Builders and General Services Inc. (DCBGSI), Traffic Control Products Corp. (TCPC), CDCP Farms Corp. (CDCP-FC) and Tierra Factors Corp. (TFC).

“PNOC-AFC and PNOC-DMC were recommended for abolition in the third quarter of this year as they are no longer achieving the objectives and purposes for which they were originally designed. ASDI, DCBGSI, CDCP-FC, TCPC and TFC, on the other hand, were abolished since they were non-operational corporations,” Malacañang said in a statement.

The GCG is the primary regulatory agency for the country’s GOCCs. Under Republic Act 10149, the law that created the commission, the GCG is mandated to evaluate the performance of GOCCs and determine their relevance with current national development goals and economic realities.

As part of the process for the abolition, the GCG will convene interagency Technical Working Groups to implement the winding down of operations, disposition of assets and liabilities, closing of books and the transfer of functions.

Employees affected by the order would be given due benefits and separation pay pursuant to civil service rules and other existing laws.

For PNOC, the GCG expects that the closure of its two subsidiaries will mean improved efficiency in operations and annual cost savings of P210 million.

Since 2011, the GCG has abolished 20 dormant or nonperforming GOCCs and has classified 20 more as inactive or non-operational.