The
Philippine Privatization Program
The
Philippine Privatization Program
The Philippine Government is committed to a free market economy.
There is, however, significant direct government involvement in
the country’s economic activity through both economic planning
and the state-ownership of numerous corporations involved in certain
strategic sectors, such as banking, power-generation, oil production
and transportation.
Structural reforms have been instituted in the public sector since
1986. The government embarked on a privatization program that
was authorized under Proclamation
No. 50 issued on December 8, 1986. This program was implemented
by the Asset Privatization Trust (APT) under the guidance of an
inter-agency Committee on Privatization (COP) and intended to
reduce substantially the size of the government corporate sector
by limiting government corporations to areas where private sector
involvement is not feasible, or where intervention can favor disadvantaged
sectors of society. The term of the COP and APT expired on December
31, 2001.
On December 6, 2001, then President Joseph E. Estrada issued Executive
Order No. 323, creating the Privatization Council
(PrC) and the Privatization and Management Office
(PMO). The PrC succeeded the COP and is now the central
agency of the government responsible for oversight of the government’s
privatization program. The PrC is responsible for formulating
policies and general guidelines on privatization issues, identifying
disposable assets, monitoring the progress of privatization activities
and approving the sale or divestment of assets with respect to
price and buyer.
The marketing of the assets or companies is handled by various
disposition entities with PMO at the forefront. The arrangement
between the PrC as the policy-making body and various disposition
entities handling the marketing of assets serves as the check
and balance.
Since its inception in December 1986, the program has caused an
increase in investments, broadened the ownership base of government
assets, developed the domestic capital markets and generated revenues.
As of July 31, 2001, the government has generated gross revenues
of P 200.76 Billion from the privatization of 480 government-owned
assets and corporations out of approximately 575 accounts that
had been approved for privatization.
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