A group presentation for the course Introduction to Public Administration (INTRODPA) at the Eulogio Amang Rodriguez Institute of Science and Technology on 04 February 2022.

1. Enhancing Good Government
Through PRIVATIZATION and
E-GOVERNMENT
A Presentation by Group 5 (BPA 1-A)
MONTENEGRO | OBTIAR | NAVARRO | RODAVIA | PADILLA | RACELIS | RODRIGUEZ | PACHEO |
ORGANO

2. THE PHILIPPINE PRIVATE SECTOR
Photo courtesy ofTed Aljibe/Agence France-Presse

3. ROLE OF
PRIVATE
SECTOR
 The role of the private sector in economic
development cannot be overemphasized.
 The private sector is the engine of growth.
Successful businesses drive growth, create jobs
and pay the taxes that finance services and
investment.
 The Philippine government acknowledges the role
of the private sector as an important partner in
attaining the country’s development objectives of
inclusive growth.
Government ensures that the interests of both the
private sector and its citizens are balanced, where
policies and procedures are continually enhanced.

4. EXAMPLES OF PRIVATE COMPANIES

5. PRIVATIZATION
“Privatization offers an alternative to the perceived excesses of
organized government: uncontrolled growth, bloated expenditures,
inefficient and wasteful public enterprises, incursion into private
sector activities, and so on.”
“Privatization occurs when a government agency that provides
public services is converted into a privately-owned organization.”
Photo courtesy of Corporate Finance Institute*

6. MODES OF PRIVATIZATION
 1. Asset divesture – Disposition or sale of asset or stakes
 2. Contracting – The government pays a private firm to render public services
 3. Franchise – The government gives a private firm the privilege to act as a 'local
monopoly' in their area
 4. Public-Private Partnership – Shared responsibility in delivering public services

7. THRUST OF PRIVATIZATION
1. Debt crisis
 In an article from The Washington Post in December 25, 1983, it has been
reported that the Marcos administration had accumulated $24 billion in foreign
debt. The Philippines that time “is the first Asian nation with a serious difficulty in
repaying its debts.”
 From https://www.washingtonpost.com/archive/business/1983/12/25/philippines-faces-foreign-debt-
crisis/14d99c52-aa57-486d-8985-10d682d25c19

8. THRUST OF PRIVATIZATION
2. Multilateral stabilization loan.
The World Bank and the International Monetary Fund asked the
Philippine government under the Marcos administration to present
a privatization policy for their stabilization loan to be approved. A
stabilization loan means the government has to accomplish
economic reforms or changes before the loan gets approved.

9. THRUST OF PRIVATIZATION
3. Incursion in private sector
Government-owned and controlled corporations increased
significantly during the Marcos administration, which relatively
affected the performance and operation of private
companies/firms. The government attempted to privatize these
GOCCs so the private companies can freely contribute to the
economy.

10. MANDATE OF PRIVATIZATION
 a) Reduce the financial burden to the government due to “losing and inefficient
GOCCs”
 b) Reduce the government's intervention in economic activity
 c) Raise funds from the sale of GOCCs and assets to finance government
programs
 d) Promote greater efficiency in the operation of the government

11. ISSUES IN PHILIPPINE PRIVATIZATION
The labor sector was not consulted in formulating
the privatization policy.
 Section 27 of the Proclamation for privatization signed by then President Corazon
Aquino raised ‘much concern.’
 “None of such officers or employees shall retain any vested right to future employment
in the privatized or disposed corporation, and the owners or controlling interest thereof
shall have full and absolute discretion to retain or dismiss said officers and employees
and to hire the replacement or replacements of anyone or all of them as the pleasure
and confidence of such owners may dictate.”
SOURCES:
Briones, L. (January 1989). Issues onThe Privatization Policy in the Philippines
PROCLAMATION NO. 50. Privatization and Management Office

12. ISSUES IN PHILIPPINE PRIVATIZATION
Liabilities surpassed the value of transferred
assets

13. ISSUES IN PHILIPPINE PRIVATIZATION
Constitutional rights and public accountability

14. EXAMPLES OF PRIVATIZATION IN
THE PHILIPPINES
Philippine Long Distance Telephone Company
• Was established on November 28, 1928
• In December 1967, Ramon Cojuangco Sr. took over the
company after buying its shares. This made PLDT a
“Filipino-controlled corporation.”
• In the 1970s, the Marcos administration nationalized the company.
By 1981, PLDT had monopolized the Philippines’ telecommunications industry.
• In 1986, the company had been ‘reprivatized’ as President Corazon Aquino
took over the country.

15. EXAMPLES OF PRIVATIZATION IN
THE PHILIPPINES
Petron Corporation
• Two oil companies from the United States merged in 1933 to form
Stanvac. When this merger ended, Stanvac became Esso Philippines.
• By 1973, President Ferdinand Marcos Sr. established the GOCC Philippine National Oil
Company (PNOC). Consequently, the PNOC acquired Esso Philippines and renamed it
Petron Corporation.
• In 1993, the PNOC sold 40 percent of Petron to the Arabian American Oil Company (Saudi
Aramco). Another 20 percent was sold to British company Ashmore Group.
• In 2010, Philippine conglomerate San Miguel Corporation acquired the majority of Petron
from the Ashmore Group.

16. GOVERNMENT-OWNED AND CONTROLLED
CORPORATION/S
MEANING
 “A stock or a non-stock corporation whether performing governmental or
proprietary functions, which is directly chartered by a special law or, if
organized under the general corporation law, is owned or controlled by
the government directly or indirectly through a parent corporation or a
subsidiary corporation.” (Presidential Decree No. 2029)
 “A corporation created by special law or incorporated and organized under
the Corporation Code and in which government, directly or indirectly, has
ownership of the majority of the capital stock.” (Executive Order No. 64 of
1993)

17. HISTORY OF GOCCs
From the 1950s to 1960s, GOCCs had “disastrous financial
performances.” In 1965, there were 37 GOCCs.
By 1975, or ten years later, the 37 GOCCs became 120 in number.
In 1984, the 120 GOCCs had swelled to 303.
Fast forward to 2010, the country had 604 GOCCs, in which 446 are
water districts.
The privatization of GOCCs through President Cory Aquino’s
proclamation brought down the number of GOCCs to 158 (today).

18. THRUST OF GOCCs
“Market failures do exist and government needs to intervene to
protect public interest.”
“The use of corporate vehicle recognized as efficient means to
mobilize government assets.”

19. MANDATE OF GOCCs
 To operate in cases where the private sector is ‘unwilling’ or ‘unable’ to provide goods
and services “vital to the society.” An example is the construction of infrastructure
projects.
 Situation: The participation of the Bases Conversion and Development Authority (BCDA)
in the government’s “Build Build Build” program.
 To “create bias” in favor of disadvantaged sectors of the society in a free market.
Examples are the rice and sugar industries.
 Situation: The creation of the National Food Authority (NFA) and the Sugar Regulatory
Administration (SRA).
 To protect the consuming public from natural monopolies.
 Situation: The function of the Metropolitan Waterworks and Sewerage System (MWSS).

20. GROUPS OF GOCCs
 a) Financial (ex. Social Security System)
 b) Public utilities (ex. MWSS)
 Industrial (ex. Philippine Fiber Industry Development Authority)
 Agricultural (ex. NFA)
 Trading (ex. Philippine International Trading Corporation)
 Promotional (ex. TIEZA)
 c) Social (ex. PCSO)
 Cultural (ex. Cultural Center of the Philippines)
 Scientific (ex. Philippine Institute of Traditional and Alternative Health Care)

21. PUBLIC-PRIVATE PARTNERSHIP
A contractual agreement between the government and a private
firm targeted towards financing, designing, implementing, and
operating infrastructure facilities and services that were
traditionally provided by the public sector.

22. PPP: WHAT IT OFFERS?
 “It embodies “optimal risk allocation” between the parties – minimizing
cost while realizing project developmental objectives. Thus, the project is to
be structured in such a way that the private sector gets a reasonable rate
of return on its investment.”

23. WHAT CHANGE WILL PPP BRING?
 Allows the allocation of public funds for other “local priorities” as the limited
funding resource for local infrastructure is addressed
 Both the public and private sectors get to share any project risk
 Project implementation and service delivery become more efficient
 Value for Money (VFM), which means reduced costs, better risk allocation, faster
implementation, improved services, and possible additional revenue generation

24. EXAMPLES OF PPP IN THE
PHILIPPINES
Metro Rail Transit Line 7 Skyway Stage 3 Light Rail Transit Line 1
Cavite Extension
Costs ₱77 billion
San Miguel Corporation
Costs ₱44.8 billion
San Miguel Corporation
Costs ₱64.9 billion
Light Rail Manila Corp.
Photo courtesy of Jesse Bustos/Philippine Star, Autodeal, Department ofTransportation

25. E-GOVERNMENT
 E-government has been employed to mean
everything from ‘online government services’’ to
‘exchange of information and services
electronically with citizens, businesses, and
other arms of government’
 It is the application of ICT in government
operations, achieving public ends by digital
means.
 Through innovation and e-government,
governments around the world can be more
efficient, provide better services, respond to the
demands of citizens for transparency and
accountability, be more inclusive and thus
restore the trust of citizens in their
governments.

26. REFERENCES
 Briones, L. M. (January 1989). Issues on The Privatization Policy in the Philippines
 Vilches, R. J. (2018, May 29). Privatization of Public Services in the Philippines. SlideShare.
https://www.slideshare.net/DomingoBrotamante/privatization-of-pubilc-services-in-the-philippines
 Lumanog, H. (2014, January 11). Government Owned and Controlled Corporation (GOCC) – Report.
SlideShare. https://www.slideshare.net/HermanLumanog/goverment-owned-and-contolled-
corporation-gocc-report
 What is PPP?. Public-Private Partnership (PPP) Center. https://ppp.gov.ph/ppp-program/what-is-ppp
 Cecilia, E. & DPM. (2020, September 17). The role of the private sector. The Manila Times.
https://www.manilatimes.net/2020/09/17/campus-press/the-role-of-the-private-sector/768834