Title
Declaration of SRA as a GOCC
Law
Executive Order No. 631
Decision Date
Jul 9, 2007
Gloria Macapagal-Arroyo's Executive Order No. 631 reclassifies the Sugar Regulatory Administration as a government-owned and controlled corporation, amending previous directives to align its operations with its true status and enhance its organizational structure.

Law Summary

Previous Executive Order and Supreme Court Ruling on SRA Status

  • Executive Order No. 339 (2004) rationalized the SRA’s operations.
  • Under EO 339, the SRA was treated as an administrative agency, not a government-owned or controlled corporation (GOCC).
  • This classification was based on a Supreme Court ruling in Republic of the Philippines vs. Court of Appeals (1991).
  • EO 339 required the SRA to adopt an organizational structure consistent with a regular national government agency.

Definition of Government-Owned and Controlled Corporation (GOCC)

  • EO No. 292 or the Administrative Code of 1987 defines a GOCC as:
    • An agency organized as a stock or non-stock corporation.
    • Vested with functions related to public needs, whether governmental or proprietary.
    • Owned wholly or mainly (at least 51% in stock corporations) by the government through its instrumentalities.
  • GOCCs can be further categorized for supervision by key government bodies such as the Department of Budget and Management, Civil Service Commission, and Commission on Audit.

Rationale for Classifying SRA as a GOCC

  • The SRA meets the GOCC criteria because:
    1. It exercises powers related to public needs.
    2. It possesses corporate personality and has corporate powers.
    3. Its precursors such as the Philippine Sugar Institute and the Philippine Sugar Commission also had corporate personality.

Legal Opinions Supporting SRA as a GOCC

  • The Department of Justice, in Opinion No. 80 (2006), confirmed that the SRA Charter (EO No. 18, 1986) is a special law.
  • The DOJ recognized jurisprudence classifying the SRA as a GOCC.
  • The "Charter Test" for GOCC classification includes:
    1. Creation by a special law.
    2. Acquisition of juridical personality exclusive to the law.
    3. Corporate governance as provided by its charter.

Implementing Rules of the Office of Government Corporate Counsel (OGCC)

  • The OGCC’s Implementing Rules (2006) define GOCCs as corporations, stock or non-stock, with government functions and ownership.
  • GOCCs include subsidiaries, acquired asset corporations, and related government entities.
  • The OGCC is the principal law office for such entities.

Necessity to Amend EO No. 339 to Reflect SRA’s True Character

  • The rationalization of the SRA must be consistent with its status as a GOCC.
  • Amendments are warranted to align organizational and operational structures accordingly.

Key Provisions of the Amendment to EO No. 339

  • Section 2, paragraph 1 of EO No. 339 is amended:
    • SRA is declared to operate and organize as a GOCC.
    • This aligns with prevailing jurisprudence and its charter.

Repealing Clause

  • All previous executive orders, rules, or parts inconsistent with this amendment are repealed, amended, or modified.

Effectivity Clause

  • The amendment takes effect 15 days after publication in a national newspaper.

Implementation Authority

  • The order is issued under the authority of the President of the Philippines.
  • The Executive Secretary is designated as the promulgating officer.

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster—building context before diving into full texts.

About Privacy Terms