Question & AnswerQ&A (EXECUTIVE ORDER NO. 596)
The Office of the Government Corporate Counsel (OGCC) is the principal law office of all GOCCs, including their subsidiaries, corporate offsprings, and government acquired asset corporations, except as otherwise provided by their respective charters or authorized by the President.
GOCCs are defined as stock or non-stock corporations, performing governmental or proprietary functions, directly chartered by a special law or organized under general corporation law, owned or controlled by the government directly or indirectly through a parent or subsidiary corporation to the extent of at least a majority of their outstanding capital stock or voting stock.
These are agencies not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some or all corporate powers, administering special funds, and enjoying operational autonomy usually through a charter, as defined in the Supreme Court case of Manila International Airport Authority vs. Court of Appeals.
Notable examples include Manila International Airport Authority (MIAA), Mactan International Airport Authority, Philippine Ports Authority (PPA), Philippine Deposit Insurance Corporation (PDIC), Metropolitan Water and Sewerage Services (MWSS), Philippine Rice Research Institute (PRRI), Laguna Lake Development Authority (LLDA), Fisheries Development Authority (FDA), Bases Conversion Development Authority (BCDA), Cebu Port Authority (CPA), Cagayan de Oro Port Authority, and San Fernando Port Authority.
Such corporations shall not be considered GOCCs before disposition to private ownership, even if ownership or control is later transferred to another GOCC. They are required by policy to be disposed of to private ownership within a specified time.
Corporations created by special law explicitly intended for ultimate transfer to private ownership under specified conditions shall be considered GOCCs until the transfer to private ownership is effected.
A parent corporation is defined as one which is created by special law.
A subsidiary corporation is one organized under general corporation law either under private ownership with majority shares conveyed to a government corporation in satisfaction of debts to a government financial institution or as a subsidiary of a government corporation organized to own, manage, lease, or operate specific assets acquired in satisfaction of debts, with a policy to dispose of it to private ownership within a specified period.
An affiliate corporation is one where total government ownership comprises less than the majority of its outstanding capital stock and voting stock.
All executive issuances, rules, regulations, or parts thereof that are inconsistent with this Executive Order are repealed or modified accordingly.
The Executive Order took effect fifteen (15) days after its publication in a national newspaper of general circulation.