Senator Panfilo “Ping” Lacson recommended on Thursday, August 27, that the national government cease funding consistently underperforming government-owned and controlled corporations (GOCCs) to optimize the country’s limited budget.
Speaking during the Senate Development Budget Coordinating Committee (DBCC) hearing on the proposed ₱7.2-trillion national budget for 2027, Lacson challenged economic managers to rethink their strategy regarding state-run firms that consume annual subsidies without generating revenue or providing meaningful public service.
He suggested that completely withholding allocations could prove more effective than merely reducing subsidies, allowing fiscal resources to be redirected toward higher-performing agencies.
“What is the new policy of the government on non-performing GOCCs? These are the ones that the national government subsidizes every year but don’t give any important revenue or service in return – all expenses and subsidies but no revenues,” Lacson asked.
“Why not just abolish them, or not fund them for that matter? Even if they are not abolished by law, they can no longer function without funding,” he added.
In response, Finance Secretary Frederick Go disclosed that the Governance Commission for GOCCs is currently evaluating 21 entities for potential closure, abolition, or merger, though he acknowledged that the procedure remains “very slow, long and tedious.”
Budget Secretary Kim Robert de Leon noted that authorities are also formulating separation packages for personnel who might be affected by these organizational shifts.
While recognizing the impact on affected personnel, Lacson insisted that fiscal realities must take priority over humanitarian concerns given the nation’s tight budget constraints.
“I understand the complexities because there will be staff who will be displaced. What are your contingency plans in case the GOCCs are abolished? These are government employees. Maybe that’s one reason why you find difficulty in abolishing these GOCCs. But we cannot afford to consider humanitarian reasons in view of the very tight fiscal space we’re having now,” Lacson emphasized.