Question & AnswerQ&A (EXECUTIVE ORDER NO. 494)
The main purpose of Executive Order No. 494 is to reorganize certain government-owned or controlled corporations (GOCCs) to effect regularization, consolidation, or conversion in line with the Government's Corporate Rationalization Program, aiming for efficient government operations and privatization.
Regularization is the process by which a government-owned or controlled corporation is transformed into a regular government agency or an integral unit of an existing agency or executive department, with essentially the same objectives, powers, and functions except those which are corporate in nature.
Conversion is a variant of the divestment process whereby a GOCC is dissolved, and exclusive authority is given to its management to form a new private corporation with the same corporate name, objectives, powers, and functions but without government funding, except that assets of the dissolved corporation may be donated to the new corporation.
Consolidation refers to the process by which a GOCC loses its legal personality and has its objectives, powers, functions, assets, liabilities, and personnel integrated into another GOCC.
The following GOCCs were regularized: Metals Industry Research and Development Center; Fiber Industry Development Authority; National Post-Harvest Institute for Research and Extension; and the Philippine Coconut Authority.
Incomes of regularized GOCCs, except for donations, grants, legacies, devises, and similar acquisitions, shall form part of the General Fund, and their operations shall be funded under the annual General Appropriations Act.
The President's authority to amend or repeal the charters of GOCCs is delegated under Section 22 of Proclamation No. 50 and supported by legal opinions from the Secretary of Justice, consistent with the Government's privatization program and within the constitutional framework.
Upon regularization, officers and employees shall continue performing duties in a holdover capacity receiving salaries and benefits unless separated or retired under existing laws; incumbents have priority for reappointment to comparable positions; those not appointed are deemed separated and entitled to benefits under existing laws.
If reorganization prejudices third persons with recognized rights, notice to or consent of the creditors as required by the agreements must be complied with before implementing the reorganization changes.
The Music Promotion Foundation is abolished, and its powers, functions, records, assets, and personnel are transferred to the Cultural Center of the Philippines.
The National Social Action Council is abolished and converted into a private, non-stock, and non-profit corporation registered with the Securities and Exchange Commission; its members must create this new corporation within 30 days of the EO's effectivity.
Assets, records, and personnel of abolished GOCCs transfer to their successor entities or are disposed of as determined by the Office of the President; liabilities are paid according to the Civil Code provisions on concurrence and preference of credits.
The Secretary of the department to which the GOCC is attached (e.g. Secretary of Agriculture, Science and Technology) or the appropriate head (e.g. President of the Cultural Center of the Philippines) promulgates the implementing rules and regulations.
The respective Secretaries are required to submit necessary organizational structures for the regularized agencies to the Department of Budget and Management within 120 days following the EO's approval.
If any section is declared unconstitutional or invalid, the remainder of the EO and its annexes shall continue to apply and remain enforceable if they can subsist independently.