SELF-SUSTAINING GOVERNMENT CORPORATIONS

SELF-SUSTAINING GOVERNMENT CORPORATIONS

Government corporations, or government-owned and controlled corporations (GOCCs), are unique entities established to generate revenue while delivering essential services. Ideally, they operate independently of government subsidies, contributing not just to national development but also to the treasury. The concept, when executed effectively, lightens the taxpayers' load and serves as a model for efficiency and innovation.

The Purpose and Potential of GOCCs

The primary purpose of creating government corporations is for them to be self-sustaining. Unlike government agencies reliant on annual appropriations, GOCCs are designed to operate as revenue-generating entities. Successful examples like PAGCOR (Philippine Amusement and Gaming Corporation) and PCSO (Philippine Charity Sweepstakes Office) demonstrate this potential, as they not only sustain themselves but also channel surplus revenues back to the government.

In effect, the surplus funds generated by GOCCs act as a form of friendly taxation—a win-win scenario where the government gains revenue without increasing the tax burden on citizens. This approach, if scaled, could help address fiscal challenges and fund critical public services.

Lessons from Global Success

Countries like Singapore and China provide compelling models for GOCC success. Temasek Holdings, Singapore’s state-owned investment company, exemplifies what is possible when government corporations are managed with professionalism and a clear strategic vision. Temasek’s portfolio includes global giants like Singtel and DBS Group, whose success reflects not only the potential of state-backed entities but also the value of strategic investments. As a matter of fact, SingTel is part of owner of Globe Telecom.

Similarly, Chinese state-owned enterprises (SOEs) like China Mobile and the Industrial & Commercial Bank of China dominate their respective sectors. These successes stem from strong government support, strategic importance, and a focus on research and development.

Challenges Facing Philippine GOCCs

Despite their potential, not all GOCCs in the Philippines are thriving. Some still depend on government subsidies, raising questions about their efficiency and relevance. For instance:

  • Which GOCCs still require subsidies or appropriations?
  • Are they meeting their intended goals, or are they burdened by inefficiencies and mismanagement?

Reforms and Recommendations

1.   Professional Management: The boards of GOCCs are often politically appointed, which can hinder efficiency. While political appointments for governance may be unavoidable, executives managing these corporations should be professionals with proven track records, much like private-sector leaders.

2.   Private-Sector Auditing: GOCCs should be audited by private firms, as is standard for private corporations. This could improve transparency and accountability while reducing bureaucratic hurdles often associated with the Commission on Audit (COA).

3.   Revenue Targets and Accountability: GOCCs should be given clear revenue targets. Boards and executives should be held accountable for meeting these goals, with the understanding that failure could lead to replacement.

4.   Sink or Swim: Government corporations must learn to operate like private companies. They should sink or swim in the market, relying on innovation and efficiency rather than perpetual bailouts. Reinvestment from the government should be treated as an investment, not as a subsidy.

5.   Investment Opportunities: The creation of new GOCCs should be considered if there are clear prospects for profitability and public benefit.

The Role of Successful GOCCs

Successful GOCCs can significantly contribute to national development. Their excess revenues can fund infrastructure projects, education, healthcare, and other social services. They also serve as proof that government enterprises, when properly managed, can compete with and even outperform private corporations.

Conclusion

Self-sustaining government corporations represent a powerful tool for national development and fiscal stability. By learning from global models, implementing reforms, and fostering a culture of professionalism and accountability, the Philippines can transform its GOCCs into engines of growth and innovation.

The ultimate goal is clear: to create a future where GOCCs not only sustain themselves but also become pillars of the national economy, lessening the tax burden and improving the quality of life for all Filipinos.

Top of Form

Ramon Ike V. Seneres, www.facebook.com/ike.seneres
iseneres@yahoo.com, 09088877282, senseneres.blogspot.com

02-10-2025

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