Question & AnswerQ&A (EXECUTIVE ORDER NO. 596)
The OGCC is the principal law office of all Government-Owned or Controlled Corporations (GOCCs), including their subsidiaries and government acquired asset corporations, and serves as the principal law office for government instrumentalities vested with corporate powers or government corporate entities.
Under EO No. 596 and PD 2029, a GOCC is defined as a stock or non-stock corporation, whether performing governmental or proprietary functions, that is directly chartered by a special law or organized under the general corporation law, and is owned or controlled by the government directly or indirectly to the extent of at least a majority of its outstanding capital stock or voting stock.
Entities such as the Manila International Airport Authority, Mactan International Airport Authority, Philippine Ports Authority, Philippine Deposit Insurance Corporation, Metropolitan Water and Sewerage Services, Philippine Rice Research Institute, Laguna Lake Development Authority, Fisheries Development Authority, Bases Conversion Development Authority, Cebu Port Authority, Cagayan de Oro Port Authority, and San Fernando Port Authority are included.
The decision differentiated government corporate entities and instrumentalities with corporate powers from GOCCs for purposes like real estate taxes and fees, prompting EO No. 596 to clarify and rationalize the definition and application of the term 'GOCC' for consistency and to avoid conflicts.
Such a corporation is not considered a GOCC before its disposal to private ownership within a specified period, even if ownership or control is transferred to another GOCC.
A 'parent corporation' is one created by special law; a 'subsidiary' is organized under general corporation law and majority owned by a government corporation or related through assets acquired in debt satisfaction and intended for disposal to private ownership; an 'affiliate' is a corporation with less than majority government ownership.
All inconsistent executive issuances, rules, and regulations or parts thereof are repealed or modified accordingly to align with EO No. 596.
EO No. 596 designates the OGCC as the principal law office for government instrumentalities vested with corporate powers or government corporate entities, thereby extending its jurisdiction beyond traditional GOCCs.
EO No. 596 took effect fifteen (15) days after its publication in a national newspaper of general circulation.