Philippines to Abolish 10% of Underperforming GOCCs to Free Up Resources

The Department of Finance (DoF) is looking to abolish around 10% of government-owned and -controlled corporations (GOCCs) that are deemed non-performing, aiming to free up public resources for programs and services that better serve the people. Finance Secretary Frederick D. Go stated that GOCCs unable to effectively fulfill their mandate or unnecessarily draining public resources should be abolished or have their functions absorbed by other entities. In a radio interview, Go estimated that approximately 10% of the over 100 GOCCs in the Philippines should be shut down or are in the process of closure. He acknowledged that government processes can slow down such actions. GOCCs often rely on subsidies from the national government to cover operational deficits. In June, subsidies to GOCCs more than doubled year-on-year to P16.56 billion. Despite this, the Marcos administration has seen record dividend remittances from GOCCs, totaling P147 billion from government financial institutions and GOCCs. This figure significantly surpasses remittances collected during previous administrations, including P84 billion under Arroyo, P164 billion under Aquino, and P382 billion under Duterte. The Marcos administration's dividend collections averaged P125.36 billion annually in its first four years. To spur economic growth, the government plans to accelerate infrastructure spending in the second half of the year. Economic growth slowed in the second quarter to 2.3%, primarily due to dampened household consumption from elevated inflation and a sharp decline in public construction. Public construction fell by 32.4% in the second quarter, partly attributed to caution following a corruption scandal last year. Go highlighted that the average GDP growth during the first four years of the Marcos administration was 5.8%, outpacing global averages of 2.5% to 3%. While growth has been slower in the last three years, he expressed confidence that the country will resume a 5% to 6% growth trajectory starting in 2027 and 2028. Information Source: BusinessWorld Economy