Distribution of company announcements to the professional platforms, finance portals and syndication of important corporate news to a wide variety of news aggregators and financial news systems.
Manila, Sep 14, 2006 AEST (ABN Newswire) - The Philippines plans to improve the operations and financial performances of six major government-owned and controlled corporations (GOCCs), with the help of a $750,000 grant from Asian Development Bank (ASX: ATB).
The technical assistance (TA) project aims to ease the country's fiscal constraints by reducing GOCCs' dependence on the national coffers. The Philippines has more than 700 GOCCs, 14 of which are closely monitored due to their heavy dependence on national government for financial support. These 14 GOCCs also account for a substantial portion of the consolidated public sector deficit. State budgetary support to the government corporate sector amounted to P80.4 billion during the 2000-2004 period. Moreover, their combined losses stood at 29.3% of the total public sector debt in 2004.
The Department of Finance, through its Corporate Affairs Group, is charged with monitoring the financial performance of all GOCCs. It also reviews the financial viability of the GOCCs, as well as their project, loan, and guarantee proposals. The DOF is expanding its monitoring beyond the 14 major GOCCs to include other corporations that may pose problems for the Government. It is in this context that ADB has provided support to the Philippine Government.
The TA covers six GOCCs that will serve as pilots for broader reforms across the sector in the future - the Bases Conversion Development Authority, Home Insurance Guaranty Corporation, Philippine National Oil Company (including two subsidiaries), Light Rail Transit Authority, Philippine National Railways, and Small Business Guarantee Fund Corporation.
A team of international and local consultants will embark on an in-depth review of the corporations, identify gaps and weaknesses, and provide specific recommendations on operational efficiency, inventory management and control, asset and liability management, financial restructuring, and other financial issues.
The team will also review the mandates of the GOCCs, including their roles as providers of public goods and services, versus the roles of the national and local governments as well as the private sector.
At the same time, the TA grant will strengthen the financial performance review and monitoring capabilities of the Department of Finance, the executing agency of the grant.
"In the medium term, the technical assistance will provide the primary building blocks to enhance good governance in the oversight functions of both the national Government and individual GOCCs," says Joven Balbosa, a Programs Coordination Specialist at ADB's Philippine Country Office.
The review is expected to be completed in 22 months.
The TA grant complements another ADB's technical assistance on debt and risk management, as well as activities of other development partners, including the World Bank, the Australian Agency for International Development, and the United States Agency for International Development.
The Philippine Government will provide $321,430 balance in local currency toward the project.
