Public Enterprises Overview

Study Notes

Definition of Public Enterprises

Public Enterprises involve state ownership and operation of diverse sectors including industrial, agricultural, financial, and commercial activities.
They can be autonomous or semi-autonomous corporations controlled by the state, engaging primarily in commercial operations.

Role of Government in Public Enterprises

Government provides capital (either solely or in partnership) for Public Enterprises.
It establishes the organizational structure and retains control over management.
Profits or losses are distributed based on the ratio of capital provided.

Nature of Public Economic Enterprises

These enterprises are business entities, either fully or partially owned by local government, designed to meet specific public demands.
Examples of Local Public Enterprises include:
- Transport terminals
- Public markets
- Slaughterhouses
- Fish landing and cold storage facilities
- Water supply systems
- Sanitation services
- Public parks
- Public cemeteries

Government-Owned or Controlled Corporations (GOCCs)

The term "public enterprise" is internationally recognized, while "Government-Owned or Controlled Corporation" (GOCC) is used in the Philippines.
GOCCs are defined by Presidential Decree (PD) No. 2029 as corporations created by special laws or incorporated under the general corporation law, where the government holds majority ownership.

Expansion of GOCC Definition

Executive Order No. 64 of 1993 broadened GOCCs' definition to include those where the government, directly or indirectly, owns the majority of capital stock.

Reasons for Creation of GOCCs

GOCCs are established to address market failures and protect public interests.
They are recognized as efficient vehicles for mobilizing government assets.

Historical Context of GOCCs

Initially, in the mid-50s to early 60s, GOCCs faced significant financial difficulties.
37 GOCCs were recorded in 1965, which increased to 120 by 1975 during President Marcos's administration.
The number peaked at 303 GOCCs in 1984, reaching 604 by 2010, with 406 being operational water districts.

Monitoring and Supervision of GOCCs

There is no central agency overseeing the activities of GOCCs.
The Government Corporate Monitoring Committee (GCMC) was established for this purpose.
Presidential Proclamation No. 50 authorized the privatization of certain GOCCs, reducing the current count to 158.

Description

This quiz explores the concept of public enterprises as described by A.H. Hanson and Mallaya. It highlights the roles of the state in ownership, operation, and management of various sectors including industrial, agricultural, and commercial activities. Understand the significance of government involvement and the essential requirements for public enterprises.