In the last quarter of 2012, President Aquino directed the Governance Commission for GOCCs (GCG) to focus its evaluation on several GOCCs for possible abolition or privatization. Among those GOCCs ordered evaluated were the recently PDAF controversy linked GOCCs which involved fund releases under the previous administration from 2007 to 2009, namely: National Agribusiness Corporation (NABCOR), Zamboanga del Norte College Rubber Estates Corp. (ZREC), Technology Resources Center (TRC), National Livelihood Development Corp. (NLDC), and Philippine Forest Corporation (PFC). Based on 2012 unaudited reports, these GOCCs have a combined net worth of approximately P3.43 Billion.

The GCG was officially constituted on 20 October 2011 pursuant to the “GOCC Governance Act of 2011” (R.A. No. 10149). As the central oversight and policy-making body for GOCCs, one of its primary mandates is to evaluate all GOCCs and determine whether each should be streamlined, reorganized, or recommended to the President for abolition or privatization. The evaluation of each GOCC is guided by the following standards expressly provided in R.A. No. 10149,

(1) The functions or purposes for which the GOCC was created are no longer relevant to the State or no longer consistent with the national development policy of the State;

(2) The GOCC’s functions or purposes duplicate or unnecessarily overlap with functions, programs, activities or projects already provided by a Government Agency;

(3) The GOCC is not producing the desired outcomes, or no longer achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical and economic returns vis-à-vis the resource inputs;

(4) The GOCC is in fact dormant or nonoperational;

(5) The GOCC is involved in an activity best carried out by the private sector; and

(6) The functional, purpose or nature of operations of any group of GOCCs require consolidation under a holding company.

To date, GCG has completed its study and recently submitted to the Office of the President its recommendation to abolish ZREC and NABCOR, and is already in the process of submitting its recommendation on the abolition of PFC. The Commission has also accelerated its evaluation of NLDC and TRC. Notably, the use of the GOCCs for projects funded by PDAF were also among the reasons for recommending abolition, aside from their redundancy with other agencies and lack of financial viability.

As the Commission continues to identify GOCCs that are no longer required for public interest, it also ensures that there is an orderly transition and proper balancing of interests in the implementation of each abolition or privatization. The abolition or privatization of a GOCC requires, among others, the transfer of assets and liabilities, and the transfer of the GOCC’s functions to another GOCC or agency that is capable of continuing the services to affected stakeholders.

Currently, the formation of technical working groups for the implementation of the abolitions or privatizations is being processed to ensure a coordinated and unified effort between GCG and concerned agencies.