Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 2029)
The State policy recognizes the corporate form of organization as a valid institutional form for government participation in economic and social development, while emphasizing the primary role of private enterprise and encouraging government corporations to avoid competition with private enterprise.
It is defined as a stock or non-stock corporation, performing governmental or proprietary functions, either directly chartered by special law or organized under the general corporation law and owned or controlled by the government to the extent of at least a majority of its outstanding capital or voting stock.
They may be classified as parent corporations, subsidiary corporations, acquired asset corporations, and affiliate corporations.
Acquired asset corporations, affiliate corporations, chartered universities, colleges, schools, and municipal corporations are excluded from coverage.
There must be a demonstrated need for operational flexibility not achievable by regular line agencies, and financial viability must be reasonably expected without operating losses or special government assistance unless otherwise specified by law.
It means the ability of the corporation to act promptly on individual matters without prior external clearance, within its charter and policies including budget constraints, while maintaining public accountability.
A minister or equivalent designated as ex-officio chairman or member may designate a senior official to sit in their stead, with the representative being a deputy minister if the minister is chairman, except for the Monetary Board where the Central Bank charter rules apply.
They are granted differential treatment consistent with corporate organizational requirements, with service-wide agencies like the Civil Service Commission and Commission on Audit applying comparable industry practices and standards for personnel, auditing, and compensation policies.
Corporations with at least 20% private ownership enjoy greater flexibility in regulations, may engage private external auditors reviewed by the Commission on Audit, and their personnel are not subject to position classification or compensation rules of the Office of Budget and Management.
The Committee, including heads of the Commission on Audit, Civil Service Commission, and Office of Budget and Management, is tasked with reviewing and revising policies and regulations for differential treatment of government corporations, classifying government corporations, and preparing draft amendments for Presidential review within two years.