The Department of Finance (DOF) has called on the Governance Commission for Government-Owned and -Controlled Corporations (GCG) to improve its system on the evaluation of state-run firms, and urged the agency to incorporate the assessments made by regulatory agencies.
The DOF said in a statement yesterday that Carlos Dominguez, DOF secretary, made the call after he observed several instances of “incongruence” between the evaluation done by the GCG on government-owned and -controlled corporations (GOCCs) against those made by agencies regulating these firms.
He said that while great strides have been achieved in improving the performance of GOCCs, which now remit an average of P57 billion in dividends annually to the Bureau of the Treasury, improvements should still be made on the part of the GCG in its evaluation of these state-run firms.
Dominguez called on the commission to adopt his recommendation in refining its evaluation methods and factoring in the findings of regulators in assessing and rating GOCCs.
“We have GOCCs that are also evaluated by their regulatory agencies. As secretary of finance, I happen to be the ex-officio chairman of eight GOCCs and director of 20 state corporations. Some of these GOCCs are regulated by agencies attached to the DOF. I have, therefore, noticed the incongruence between the evaluation made by the GCG against those made by regulatory agencies. This should not be the case,” Dominguez said during last week’s virtual celebration of the GCG’s 10th anniversary.
Dominguez cited the case of the Insurance Commission, whose review of the performance of some government insurance corporations contrasted sharply with the assessment by the GCG.
“The discrepancies could cause confusion among the regulated and reviewed state enterprises. More seriously, they could bring forth errors in policies for the government,” Dominguez said.
“I therefore call on my colleagues in the commission to work towards correcting this irregularity,” he added.
Dominguez also pointed out the GCG has rated some government insurance companies very highly even though they did not adhere to international standards of accounting and reporting.
“This, I think, is a failure not only of 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,” he said.
Dominguez said the GCG should make its review methodologies relevant to the industry sectors to help it identify factors peculiar to each GOCC and, ultimately, come up with a scorecard that accurately measures the achievement of the vision, mission and mandates of GOCCs.
Dominguez said for GOCCs to remain relevant, they must meet the highest standards of corporate governance, become sustainable, be prudent in the use of the taxpayers’ money and efficient in the deployment of their assets. – Angela Celis
