PHL’s much-reduced GOCC lineup still enmeshed in strategic sectors — OECD

THE PHILIPPINES has seen a sharp decline in the number of its state-owned enterprises (SOEs) over the past decade, though remaining government firms continue to control strategic areas of the economy, according to a report by the Organisation for Economic Co-operation and Development (OECD).

“Between 2011 and 2024, the number of SOEs declined from 158 to 118 due to privatization, mergers, and closure of loss-making entities,” the OECD said.

However, government-owned and -controlled corporations (GOCCs) remain active in key industries like hydrocarbons, energy, finance, transportation and utilities, it said.

“Under the GOCC Governance Act of 2011, they conduct both commercial and non-commercial activities and contribute to national development by providing essential public services and infrastructure,” it said.

“SOEs may also be tasked with promoting social stability through employment creation,” it added.

The OECD said the Philippines has yet to fully integrate sustainability into SOE target-setting and monitoring systems.

“In the Philippines, the Governance Commission for GOCCs (GCG) has a central monitoring role but it provides general governance and performance oversight rather than a dedicated SOE sustainability monitoring framework,” it said.

The report noted that some sustainability-related key performance indicators have been incorporated into the performance evaluation system for GOCCs.

The Philippines revised its performance evaluation system in 2024 to include disaster risk reduction and management, as well as gender-equality, disability, and social inclusion measures.

Meanwhile, the OECD also highlighted the role of governments in influencing sustainability outcomes through procurement contracts.

Advanced economies such as China, India, Japan, and South Korea have overarching laws governing green public procurement (GPP), while countries like the Philippines promote GPP through broader sustainability and climate-related laws, strategic roadmaps, national plans, and eco-labeling and certification systems, it said. 

The Philippines, along with Singapore and Thailand, was among only three of the 10 countries reviewed in the report that implement voluntary compliance for GPP practices applicable to SOEs. — Justine Irish D. Tabile