When the Philippine government collected over ₱76 billion from Government-Owned and Controlled Corporations (GOCCs) by May 2025—with projections to exceed ₱100 billion by year-end—it wasn’t just another budget line item. This massive sum represents something more profound: the transformation of GOCCs from cost centers into genuine economic engines that fund national development without raising taxes on ordinary Filipinos.
The numbers tell a remarkable story. That ₱100 billion could build 1,600 kilometers of farm-to-market roads, construct over 8,000 new classrooms, irrigate 25,000 hectares of farmland, and provide free dialysis and chemotherapy to hundreds of thousands of patients. But behind these figures lie institutions that have quietly become some of the most powerful forces shaping Philippine economic development.
The financial giants leading the charge
At the heart of this transformation stand two banking titans that exemplify how GOCCs have evolved into development powerhouses. Land Bank of the Philippines (LANDBANK) leads not just in dividend contributions—remitting a record ₱32.119 billion in 2024—but in governance excellence, achieving an unprecedented 104% rating in the Corporate Governance Scorecard, exceeding the maximum threshold.
LANDBANK’s success reflects more than good management; it demonstrates how a GOCC can simultaneously serve commercial and developmental goals. While operating profitably enough to contribute billions to national coffers, it continues fulfilling its mandate to provide agricultural credit and support rural development—areas where private banks often find limited profit potential.
The Development Bank of the Philippines (DBP) complements this approach with its focus on infrastructure and industrial financing. Together, these institutions represent a uniquely Filipino solution to development finance: banks that think like businesses but act with national development priorities in mind.
Energy security as economic foundation
The energy sector showcases how GOCCs serve as strategic instruments of economic policy. The National Power Corporation (Napocor) and Philippine National Oil Company (PNOC) operate in industries too critical for national security to leave entirely to market forces, yet too complex for traditional government management.
These energy GOCCs illustrate the sophistication required to balance commercial viability with strategic objectives. They must maintain financial sustainability while ensuring energy security, support renewable energy transitions while managing existing infrastructure, and serve remote areas that private companies might abandon due to low profitability.
The recent focus on governance reforms has transformed these entities from potential fiscal burdens into contributors to national development. By 2022, the comprehensive losses of all GOCCs had been slashed by 78.96% compared to 2021, demonstrating how improved management can turn strategic assets into economic contributors.
Infrastructure as economic catalyst
Perhaps nowhere is the GOCC impact more visible than in infrastructure development. The Manila International Airport Authority (MIAA) stands among the top dividend contributors while managing critical gateway infrastructure. The Bases Conversion and Development Authority (BCDA) transforms former military installations into economic zones, earning sustainability awards while generating economic opportunities.
These infrastructure GOCCs demonstrate how public ownership can accelerate development in ways pure private enterprise might not. Private developers might focus on the most profitable locations and projects, but GOCCs can take longer-term views and broader social considerations into account while maintaining commercial discipline.
The success of entities like BCDA in developing New Clark City and other projects shows how GOCCs can serve as catalysts for regional development, creating economic clusters that generate employment and business opportunities far beyond their immediate operations.
The governance revolution
The dramatic improvement in GOCC performance stems largely from governance reforms implemented through the Governance Commission for GOCCs (GCG). The Corporate Governance Scorecard and Performance Evaluation System have transformed how these institutions operate, bringing private-sector discipline while maintaining public-sector mandates.
This governance revolution explains how GOCCs achieved such remarkable financial turnarounds. When Land Bank exceeds 100% on governance metrics or when the Philippine Charity Sweepstakes Office (PCSO) achieves 92.03% performance ratings while surpassing sales targets by 125%, it reflects systematic improvements in management, transparency, and accountability.
The reforms address a fundamental challenge: how to run institutions that must be both profitable and equitable, both efficient and inclusive. The success metrics suggest this balance is achievable when governance structures align incentives properly.
Economic multiplier effects
The economic impact of major GOCCs extends far beyond their direct operations and dividend contributions. They serve as anchor institutions that support entire economic ecosystems. LANDBANK’s agricultural lending enables rural economic activity that supports millions of farmers and rural businesses. DBP’s infrastructure financing facilitates projects that create construction jobs, improve connectivity, and enable other economic activities.
These multiplier effects are particularly important in a developing economy where private capital might not flow to all socially beneficial projects. GOCCs can make investments based on broader economic calculations than pure profit maximization, supporting activities that generate social returns even when private returns might be modest.
The infrastructure investments enabled by GOCC dividends—those farm-to-market roads, classrooms, and irrigation systems—create economic opportunities that compound over time. Rural roads enable farmers to access markets more efficiently. New schools create educated workforces. Irrigation systems increase agricultural productivity and food security.
Strategic economic instruments
Major GOCCs function as more than individual businesses; they serve as instruments of national economic strategy. During economic downturns, government financial institutions can maintain credit flows when private banks become cautious. During development phases, they can channel capital toward strategic priorities that might not attract immediate private investment.
This strategic flexibility proved valuable during the pandemic when GOCCs maintained operations and services while many private entities retrenched. Their continued operations and eventual financial recovery contributed to broader economic resilience.
The energy and infrastructure GOCCs provide similar strategic value by ensuring that critical services remain available and that long-term investments continue even when short-term market conditions might discourage private investment.
Measuring true success
The success of major GOCCs should be measured not just in dividend contributions, impressive as those are, but in their ability to simultaneously serve commercial and developmental objectives. When LANDBANK achieves record profitability while expanding agricultural credit, or when infrastructure GOCCs generate revenue while building connectivity to underserved areas, they demonstrate the potential of the GOCC model.
The sustainability awards received by institutions like BCDA, LANDBANK, and others reflect another dimension of success: the ability to balance immediate financial performance with long-term social and environmental considerations.
These institutions have evolved into sophisticated entities that can compete commercially while serving broader national objectives—a combination that represents the maturation of the Philippine development model.
The development partnership
The transformation of major GOCCs into economic powerhouses represents more than institutional reform; it embodies a distinctive approach to development that combines market efficiency with strategic guidance. These institutions serve as bridges between immediate commercial viability and long-term national development goals.
Their success validates the idea that well-governed public enterprises can contribute to rather than drain national resources, while ensuring that essential services and strategic industries remain aligned with national interests. In an era when many countries struggle with the limitations of pure market solutions or pure government control, Philippine GOCCs offer a model of institutions that harness commercial discipline in service of broader development objectives.
The billions in dividends they generate are important, but perhaps more significant is their demonstration that public and private efficiency need not be mutually exclusive when governance structures create proper incentives and accountability mechanisms.
As the Philippines continues its development trajectory, these reformed GOCCs stand as proof that state-owned enterprises can be engines of growth rather than drains on public resources. Their success creates a virtuous cycle: better governance leads to stronger financial performance, which generates more resources for development, which in turn supports broader economic growth. For a country seeking sustainable development without sacrificing strategic control over key sectors, the GOCC model offers a path that merits attention not just domestically, but from other developing nations facing similar challenges.
The question is no longer whether GOCCs can contribute to national development—the financial results have settled that debate. The question now is how effectively the Philippines can leverage these reformed institutions to accelerate progress toward its development goals while maintaining the governance standards that made their transformation possible.
