In 2021, Philippine GOCCs lost ₱691.76 billion. Just one year later, that loss dropped to ₱145.48 billion—a 79% improvement. By 2024, many of these same institutions were sending record dividends to the government. LandBank contributed ₱32.119 billion alone.
This wasn’t luck. It was the result of the most ambitious institutional reform program in recent Philippine history.
What went before
Before reforms, GOCCs operated like poorly run government offices rather than businesses. Political allies got board seats regardless of qualifications. Executives collected high salaries while their institutions lost money. Nobody tracked performance, and the public rarely knew how badly things were going.
Some GOCCs needed annual bailouts just to keep operating. Others piled up losses year after year. Stories of waste and mismanagement became regular news. The public lost faith in the idea that the government could run businesses effectively.
Something obviously had to change.
The scorecard revolution
The GOCC Governance Act of 2011 created the Governance Commission for GOCCs (GCG) to fix the mess. The commission brought a simple idea: measure everything and make the results public.
They developed the Corporate Governance Scorecard (CGS) to rate how well GOCCs follow good business practices. The Performance Evaluation System (PES) tracks whether institutions meet their targets. High performers get recognition and more freedom. Poor performers face intervention.
Land Bank now scores 104% on governance—higher than the maximum rating. The Development Bank scores 102.67%. These aren’t just numbers. They represent real changes in how these institutions operate.
Fixing the boards
Board appointments used to reward political loyalty. Friends of politicians got comfortable positions without needing relevant experience. The reforms changed this by requiring professional qualifications and adding independent directors.
Boards now focus on business results rather than political favors. They hire qualified executives, set clear targets, and hold management accountable for results. When boards work properly, the whole institution improves.
Paying for performance
The old salary system made no sense. Some executives earned more than cabinet secretaries while their GOCCs lost billions. Others got poverty wages regardless of performance. The reforms tied compensation to institutional size, complexity, and results.
Executives can now earn bonuses, but only when their GOCCs hit both financial and service targets. This created proper motivation to improve both profitability and public service.
Opening the books
Modern GOCCs publish detailed annual reports. Their financial statements get audited and made public. Performance data is tracked and published regularly. Citizens can check online to see how well their GOCCs are doing.
PCSO scored perfectly on stakeholder relations for three straight years while achieving 92.03% overall performance. Transparency helped rather than hurt its operations.
Beyond just profits
Six GOCCs won sustainability awards in 2023, showing that reforms now include environmental and social responsibility. Land Bank, DBP, and BCDA follow international standards for sustainability reporting while maintaining strong financial performance.
The reforms matured from fixing basic problems to building world-class institutions.
Turnaround stories
PCSO went from scandal-prone to model performer. It now exceeds sales targets while maintaining perfect public relations scores. Its charitable work expanded alongside commercial success.
BCDA turned old military bases into economic zones while winning sustainability recognition. New Clark City shows how reformed GOCCs can generate revenue while protecting the environment.
Land Bank broke dividend records while expanding loans to farmers. Strong governance strengthened rather than weakened its social mission.
Cutting deadweight
Not every GOCC survived the reforms. The government reviewed all charters to see which institutions still served useful purposes. Some were abolished, others merged, and many restructured for efficiency.
This eliminated institutions that wasted money without delivering value. It also prevented politicians from creating new GOCCs without clear justification.
Money management, real results
Reformed GOCCs can’t pile up losses indefinitely or expect automatic bailouts. They must prove financial sustainability or face restructuring. The Department of Finance redirects excess funds to health and social programs instead of letting them sit idle.
This discipline helped cut sector-wide losses while growing dividend contributions.
The changes go beyond financial improvements. Citizens report better service from reformed GOCCs. International experts now study Philippine reforms as a model for other countries. Public trust in state-owned enterprises has recovered.
Three factors made the reforms successful. First, they addressed everything at once—governance, boards, compensation, transparency—rather than piecemeal changes. Second, political leaders maintained support across different administrations. Third, making results public created competitive pressure for improvement.
Unfinished business
Still, some problems remain. Some GOCCs still struggle to balance making money with serving public needs. Political pressure for jobs or spending sometimes conflicts with efficiency. Maintaining momentum requires constant attention.
The real test is whether these improvements last when economic conditions change or new political pressures emerge.
Next, please
The Philippines proved that government-owned businesses can be fixed. The turnaround from ₱691.76 billion in losses to record profits shows that good management creates value for everyone.
But reform never ends. The systems that drove improvement must keep evolving to handle new challenges while preserving the accountability that made success possible. The current achievements could be either the foundation for permanent improvement or just a temporary upswing.
The difference will depend on whether the Philippines can maintain the discipline and transparency that drove the transformation in the first place.
