MEMORANDUM CIRCULAR NO. 64
MEMORANDUM CIRCULAR NO. 64 -
GUIDELINES TO IMPLEMENT EXECUTIVE ORDER NO. 55 (1993)
Pursuant to Executive Order No. 55 entitled
"Reconstituting And Further Strengthening The Government Corporate
Monitoring And Coordinating Committee (GCMCC)", dated 8 February 1993,
the following guidelines are hereby promulgated to streamline the GCMCC
operations:
I.
DEFINITION OF TERMS
Section 1. Government-Owned And Controlled
Corporations (GOCC). — As used in these Guidelines, a GOCC is a
corporation created by special law or incorporated and organized under
the Corporation Code and in which government, directly or indirectly,
has ownership of the majority of the capital or voting stock. Any
subsidiary of a GOCC shall also be deemed a GOCC.
A corporation, either created by special law or where the government
has majority control and which is explicitly intended under the law and
government policy for ultimate transfer to private ownership under
certain specified conditions, shall be considered a GOCC until it is
transferred to private ownership and control.
Sec. 2. Heavy Burden On National Treasury. — The
term "heavy burden on the National Treasury" as hereinafter used,
relates to:
2.1
actual financial exposure of the National Government to a GOCC in the
form of equity, advances, current subsidies or collectible taxes or
fees, the magnitudes of which constitute a significant proportion to
that of the government corporate sector and vis-a-vis other GOCCs;
2.2 loans and
liabilities, whether domestic or foreign, which are guaranteed by the
government; and
2.3 losses
incurred by GOCCs.
II.
DECLARATION OF POLICIES AND OPERATING PRINCIPLES
Sec. 3. Adoption Of National Policies Consistent
With The Medium-Term Philippine Development Plan And Priority Areas Of
The Presidency. — The GCMCC shall be guided by the following policies
and priorities in the pursuance of its role relative to the government
corporate sector, among others:
3.1
Enhancement of the Role of the Corporate Sector as an Active Partner of
the Government in National Development. — In order to optimize the
active involvement of the government corporate sector in the
development efforts of the National Government, it is deemed necessary
that the thrusts and priorities as well as the operations of GOCCs be
coordinated, integrated and monitored to ensure that they are
consistent with the goals and objectives of the government. It is
expected that monitoring and coordination of GOCC operations and
activities will ensure that individual GOCCs and the government
corporate sector in general are performing efficiently and effectively,
especially in the priority areas of the Presidency, such as,
pump-priming the economy, streamlining the bureaucracy, and people
empowerment.
3.2 Attainment
of a Prudent Level of Government Expenditures. — This entails limiting
the heavy burden of GOCCs on the National Treasury and providing for a
more effective allocation and efficient utilization of public resources
through the improvement of the system of prioritizing expenditures by
channeling public resources to investments and programs that promote
economic growth, among others.
3.3
Enhancement of Private Sector Privatization. — This entails minimizing
of government exposure, specially in priority investment areas.
3.4
Rationalization of the Government Corporate Sector. — This includes the
following strategies:
3.4.1
Pursue the privatization of GOCCs and implement the divestment program
of the government which includes other dispositive actions such as
abolition, consolidation and dissolution;
3.4.2 Limit
the creation of new government corporations, particularly those
involved in entrepreneurial and proprietary activities; and
3.4.3 Lessen
the number of heavily subsidized programs in the government corporate
sector.
Sec. 4. Adoption Of The Operating Principles of
Streamlining, Flexibility And Command Responsibility. — The GCMCC shall
adopt the following operating principles in the performance functions
and activities:
4.1
Focus on Presidential Concerns and on Monitoring, Coordinating and
Evaluation. — As a general rule, matters in the government corporate
sector not requiring action or decision by the President or the Office
of the President (OP) shall be left to the concerned departments,
agencies and other oversight bodies. At the same time, the GCMCC shall
mainly concentrate on the monitoring, coordination and evaluation of
performance and issues in the government corporate sector. This will be
consistent with the policy of devolution of functions, will provide
operational focus and prevent overlapping and duplication of activities
with other agencies/bodies.
4.2
Decentralization of Activities. — Activities falling within the purview
of the GCMCC shall also be decentralized to member-agencies. This will
be in the form of a "lead agency" concept, whereby the responsible
member-agencies shall be tasked to take the initiative or undertake
activities along their areas of expertise on behalf of and subject to
the guidance and approval of the GCMCC. The GCMCC shall operate as a
"task master" among its members.
4.3
Enhancement of the Command Responsibility of Mother Agencies. — As a
general rule, the responsibility over the performance of GOCCs shall be
vested with the Mother Agency or the supervising department/agency
where the GOCCs are attached to or under its administrative
supervision. This will enhance the command responsibility of the Mother
Agency over the GOCCs and effect better policy and operational
integration.
4.4 Provision
of Adequate Operational Flexibility to the GOCC. — The establishment of
an effective monitoring and coordination system for all GOCCs is not
intended to curtail the operational flexibility of GOCCs. GOCCs shall
be encouraged to perform their functions without undue interference
from the National Government consistent with national interest and
public welfare. As a general rule, any project or activity undertaken
by a GOCC should reasonably be expected to be financially
self-sustaining, that is, it must be able to support its operations
from internally generated funds without special privileges,
preferential treatment or continuing budgetary assistance from the
government.
III.
ROLE OF THE GCMCC
Sec. 5. Basis For Existence. — The GCMCC, created
under Executive Order No. 936 dated 29 February 1984, reconstituted
under Memorandum Circular No. 10 dated 16 May 1986, reaffirmed under
Executive Order No. 236 dated 22 July 1987, and reconstituted and
further strengthened under Executive Order No. 55 dated 8 February 1993
as the monitoring and coordinating body for all GOCCs, shall serve as:
5.1
Central coordinating, monitoring and performance evaluation entity for
GOCCs for the following purposes:
5.1.1
Enhance operational public accountability;
5.1.2 Promote
sufficient allocation and use of resources;
5.1.3 Instill
financial discipline and promote financial self-sufficiency; and
5.1.4
Integrate the plans and programs of the GOCCs with the requirements and
goals of government policy.
5.2
Policy formulating and recommending body for the President on matters
concerning the government corporate sector.
Sec. 6. Powers And Functions. — The GCMCC shall
perform the following specific functions:
6.1
As the central coordinating, monitoring and performance evaluation
entity:
6.1.1
Monitor and evaluate the financial and physical performance of GOCCs;
6.1.2 Develop
guidelines on the monitoring of operations of GOCCs and provide
guidance in the preparation of corporate plans;
6.1.3 Develop
and establish indicators, criteria, targets, standards and other
measures of performance of corporate monitoring and evaluation;
6.1.4 Prepare
an annual list of GOCCs to be monitored for approval of the
President;
6.1.5 Require
GOCCs to prepare and submit regular reports and conduct periodic review
and appraisal of performance; and
6.1.6
Recommend to the President financial sanctions and incentives for GOCCs.
6.2
As a policy formulating/recommending entity:
6.2.1
Formulate policy recommendations and guidelines on the operations of
GOCCs for approval by the President;
6.2.2 Review
and evaluate all proposals, recommendations and studies pertaining to
the government corporate sector before they are submitted to the
President; and
6.2.3 Advise
the President on proposed government corporations to be created by
legislature.
6.3
Other Functions:
6.3.1
Devise an Integrated Corporate Reporting System (ICRS) for GOCC reports
to oversight bodies to avoid duplication and combine the essentials
into a single set of reports. In addition, the following related
functions are also provided:
6.3.1.1
Review compliance and recommend to the President sanctions and
administrative penalties on GOCCs relative to compliance with ICRS;
6.3.1.2
Provide clearance for possible amendments to the ICRS; and
6.3.1.3
Undertake regular review of the ICRS to ensure its continuing relevance.
6.3.2
Coordinate the classification of GOCCs according to functional and
sectoral groupings relative to the formulation of differential
treatment of GOCCs by various oversight agencies; and
6.3.3
Review and evaluate conversion into equity of loans previously extended
by a GOCC to a private corporation, which will result in majority
ownership by the GOCC.
IV.
COVERAGE
Sec. 7. GOCCs Covered. — Parent GOCCs, especially
those which require a heavy burden on the National Treasury, shall be
subject to the monitoring coverage of the GCMCC upon the approval of
the President.
V.
PERFORMANCE EVALUATION SYSTEM (PES)
Sec. 8. Establishment Of A Performance Evaluation
System. — The GCMCC shall undertake the following activities to
institutionalize a Performance Evaluation System (PES):
8.1
Issue guidelines that shall govern the process of negotiating
performance contracts between the supervising department and the
attached GOCC and between OP-attached GOCCs and the President;
8.2
Institutionalize a standard framework for the development of corporate
plans by GOCCs; and
8.3 Monitor,
evaluate and assist in the preparation and implementation of
performance contracts by GOCCs.
The supervising Departments/Mother Agencies and its attached GOCCs
shall undertake between themselves a performance contracting process
similar to the process undertaken between the OP-attached GOCCs and the
President.
The GCMCC shall submit an integrated performance evaluation report on
the monitored GOCCs to the President within the first quarter of the
succeeding year.
Sec. 9. Incentives And Sanctions. — Concerned
supervising bodies and/or agencies shall recommend to the GCMCC
appropriate actions relative to the result of the performance
evaluation, such as, sanctions that include withholding of budget
releases on GOCCs which fail without any justifiable reasons to meet
its performance targets as well as incentives such as Presidential
citations in recognition of the performance of individual
GOCCs.
The GCMCC shall bring to the attention of the President performing as
well as non-performing GOCCs so that appropriate recognition or
sanctions can be imposed.
The GCMCC shall continue to administer the performance evaluation and
incentive systems provided under Executive Order No. 486 (1991), as
amended.
VI.
COMMITTEE ORGANIZATION AND CONDUCT OF AFFAIRS
Sec. 10. Committee Meetings. — The GCMCC, composed
of the Executive Secretary; Secretaries of Finance, Budget and
Management, and Trade and Industry; Director-General of the National
Economic and Development Authority; Governor of Bangko Sentral ng
Pilipinas; Chief Presidential Legal Counsel; Head of the Presidential
Management Staff; and, the Government Corporate Counsel, shall meet
regularly.
In the absence of a GCMCC member, an official not lower than an
Assistant Secretary or its equivalent shall be designated to represent
the same.
Sec. 11. Chairman Of The GCMCC. — The Chairman of
the GCMCC shall be appointed by the President of the Philippines.
Sec. 12. Technical Board. — To assist the GCMCC in
the conduct of its business, a Technical Board shall be created to be
composed of representatives from the member-agencies of the GCMCC who
shall be designated by the member Secretary or Head of office. The Head
of the GCMCC Secretariat shall act as the Chairman of the Technical
Board.
Sec. 13. Staff Assistance To The Committee. — The
GCMCC Secretariat shall be absorbed by and integrated in the
Presidential Management Staff (PMS). The PMS, therefore, shall act as
Secretariat of the GCMCC. The Head of the GCMCC Secretariat shall
manage the day-to-day operations of the GCMCC.
The transfer of the GCMCC Secretariat from the Department of Finance
(DOF) to the PMS shall include the personnel, appropriations, funds,
records, equipment, facilities, supplies, books of account, choses in
action, rights and other assets.
The GCMCC may also create inter-agency technical working groups as may
be necessary to enhance its coordinative functions.
Sec. 14. Transfer Of Other GCMCC Functions. — All
other existing functions or representations by the GCMCC not otherwise
mentioned in these Guidelines shall be transferred to appropriate
member departments. This includes, but is not limited to, the
membership of the GCMCC in the NEDA Investment Coordination and
Infrastructure Committees which are hereby transferred to the
Department of Finance.
VII.
REPEALING CLAUSE
Sec. 15. All executive issuances, rules and
regulations or parts thereof inconsistent with these Guidelines are
hereby repealed, superseded, amended or modified
accordingly.
VIII.
EFFECTIVITY
Sec. 16. This Memorandum Circular shall take
effect immediately upon approval.
DONE in the City of Manila,
this 16th day of August in the year of Our Lord, Nineteen Hundred and
Ninety-Three.
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Since 19.07.98.