The combined operational performance of 31 major government-owned and -controlled corporations (GOCCs) is nearing pre-pandemic levels, according to a statement released by the Department of Finance (DOF) yesterday.
The DOF’s corporate affairs group (CAG) report states that based on the 2021 unaudited financial reports of these 31 GOCCs, their combined portfolios stood at P10 trillion in assets and P16.22 trillion in liabilities, or an estimated growth of seven percent and nine percent, respectively.
These 31 GOCCs include the Philippine Deposit Insurance Corp. (PDIC), National Power Corp., National Transmission Corp., Philippine National Oil Company (PNOC), Philippine Economic Zone Authority, Bases Conversion and Development Authority, Philippine Ports Authority, Power Sector Assets and Liabilities Management Corp. (PSALM), Philippine Amusement Gaming Corp. (Pagcor), Philippine Charity Sweepstakes Office (PCSO), Manila International Airport Authority (MIAA), Civil Aviation Authority of the Philippines (CAAP), Land Bank of the Philippines, Development Bank of the Philippines, Social Security System (SSS), Government Service Insurance System (GSIS) and the Philippine Health Insurance Corp. (PhilHealth).
Also included in the list are the National Food Authority (NFA), National Development Co., Metropolitan Waterworks and Sewerage System, Local Water Utilities Administration, National Housing Authority, National Irrigation Administration, Philippine National Railways, Light Rail Transit Authority, National Electrification Administration and the Philippine Guarantee Corp. (PhilGuarantee).
The remainder of the 31 GOCCs are the Home Development Mutual Fund, Philippine Crop Insurance Corp., Social Housing Finance Corp. and the National Home Mortgage Finance Corp.
“The net improvement in the consolidated results of operations of the government corporate sector last year was primarily driven by the PSALM, PCSO, CAAP, NFA, PDIC, PNOC, PhilGuarantee and GSIS,” the DOF said.
However, the substantial improvement in the operations of some of these GOCCs was tempered by the drop in the operations of GOCCs which were directly affected by the pandemic and the corresponding health measures taken, the DOF said. These include the PhilHealth, SSS, MIAA and Pagcor.
“The results of operations of the government corporate sector dropped to a P703.59 billion net loss in 2021 from P346.54 billion net loss in 2020 primarily because of the recognition of the Insurance Contract Liabilities by GOCCs classified as government insurance institutions when the Philippine Financial Reporting Standards (PFRS) was adopted in reporting their financial statements,” the DOF said.
Before the PFRS adjustments, the results of operations of these corporations totaled a net income before tax of P324.63 billion in 2021 or a 19 percent increase from the P273.66-billion level in 2020.
The results of operations in 2021, sans the PFRS adjustments in the social security institutions reports, show that the GOCCs are starting to bounce back to their 2019 net income before tax level of P342.89 billion, the DOF said.
“The overall performance of the sector for 2021 reflects the firm resolve of the government to promote transparency in the financial health of the government corporations through adherence to international reporting standards and best practices and related laws, rules and regulations,” the DOF said.
In terms of dividend contributions as mandated under Republic Act 7656, about half or 15 of these GOCCs remitted a total of P30.8 billion or 54 percent of the P57.55 billion dividends in 2021.
Excluding the P15.9 billion of the Bangko Sentral ng Pilipinas, these firms accounted for 74 percent of the P41.65 billion remitted in 2021.
Soledad Emilia Cruz, DOF assistant secretary, said the CAG reported that the 31 GOCCs are “considered fiscally significant either as major contributors to the revenue of the national government (NG) or as recipients of direct and indirect support from the NG.”
“Most of these corporations form part of the consolidated public sector financing position of the government,” according to the CAG report.
These 31 GOCCs and other state-run firms have also played a key role in helping augment the massive financing needed for the government’s COVID-19 response, the DOF said.
They are also expected to contribute in raising funds for the subsidy programs being implemented by Malacañang to ease the impact of high fuel and commodity prices triggered by the ongoing Russia-Ukraine conflict.
Reforms and legislation enacted prior to the pandemic such as the Rice Tariffication Law, Social Security Act and the Murang Kuryente Act implemented in 2021 were important factors in the enhancement of the revenue of various GOCCs and consequently, in the net improvement of the consolidated results of operations of the sector, Cruz said.
“As the government threads towards the path to solid recovery, we expect to see increased demand for financing, increased government and consumer spending that will accelerate the recovery of the government corporate sector and bring back its financial position to normal levels,” according to CAG.
“This will be an opportune time for the GOCCs to build on the foundation of the road towards economic recovery laid by the NG, and become an important and strong ally in the process,” it added. – Angela Celis
