Senator Panfilo “Ping” Lacson raised the possibility of reducing financial support to persistently non-performing government-owned and controlled corporations (GOCCs) instead so the government can maximize its limited resources.

Lacson made the proposal during the Development Budget Coordinating Committee (DBCC) briefing on the proposed P7.2-trillion national budget for 2027 at the Senate on Thursday, August 27, where he asked state economic managers about their policy on GOCCs that still receive yearly subsidies despite continually providing zero revenues or little or no apparent benefit.

Instead of merely reducing their subsidies, Lacson said defunding stubbornly non-performing GOCCs may help the government utilize public funds to other agencies that can generate more revenues.

“What is the new policy of the government on non-performing GOCCs? These are the ones that the national government subsidizes every year but don't give any important revenue or service in return - all expenses and subsidies but no revenues,” Lacson asked during the DBCC briefing.

“Why not just abolish them, or not fund them for that matter? Even if they are not abolished by law, they can no longer function without funding,” he pointed out.

According to Department of Finance (DOF) Secretary Frederick Go, the Governance Commission for GOCCs is considering 21 GOCCs for closure, winding down or absorption by other GOCCs, but the process is "very slow, long and tedious."

Department of Budget and Management (DBM) Secretary Kim Robert de Leon, on the other hand, said they are considering separation incentives for potentially affected personnel.

Lacson said that while he understands the complexities of pushing through with such actions as it may displace staff and personnel manning those GOCCs, he urged state economic managers to come up with contingency plans once they are abolished, considering these are government employees.

The senator said the national government should look into how much it has been subsidizing non-performing GOCCs annually vis-à-vis the country’s tight fiscal space.

“I understand the complexities because there will be staff who will be displaced. What are your contingency plans in case the GOCCs are abolished? These are government employees. Maybe that's one reason why you find difficulty in abolishing these GOCCs. But we cannot afford to consider humanitarian reasons in view of the very tight fiscal space we're having now,” he pointed out.

Questionable lump sums

Also during the DBCC briefing, Lacson questioned why, according to the DBM, the preparation of the 2027 national budget is already considered “execution-ready” when it allows appropriations for “blank” items.

The senator noted there are lump sum allocations of P180-million each for all 17 regions, for evacuations centers.

“But there were no specifics. Much as we would like to believe you, the NEP says otherwise,” Lacson said in response to de Leon’s statement.

Moreover, he noted that these “blank items” were not just present in the 2027 budget.

“And mind you, this is not just for the 2027 NEP. We also saw P100-million lump sums each for all 17 regions. We will ask the DPWH (Department of Public Works and Highways)  about this too but since this is part of policy, why did the DBCC allow the budget to fund items that are 'blank,' meaning there are amounts but no specific details?” he pointed out.

De Leon then explained that the agencies would still be required to submit the final details to the DBM before the allocations could be implemented. He also said the Office of Civil Defense (OCD) still has to finalize the list.

But Lacson pointed out that such details should have been submitted during the budget preparation stage.

He also noted that while the OCD estimates the cost of each evacuation center at P75-million, the Philippine Disaster Resilience Foundation (PDRF), one of the private sector groups that worked on Yolanda rehabilitation, along with BPI, constructed an evacuation center in Ibaan, Batangas amounting to P12.7-million.

The PDRF was among the private sector organizations that Lacson worked  with during his stint as Presidential Assistant for Rehabilitation and Recovery, where he coordinated efforts to help those affected by Super Typhoon Yolanda (Haiyan).

“How many evacuation centers following the 2013-2014 model can be built with P3.06 billion? The OCD estimates each evacuation center costs P75M, this is quite far from P12.77M. Even accounting for inflation, P75M per evacuation center is quite high,” Lacson said.