GOCC urged: Compete on even terms with private sector

Proprietary or commercial functions enable GOCC to earn or derive income while regulatory functions are those that enable them to set rules in their specific sector or market.

Socioeconomic Planning Secretary Ernesto Pernia on Thursday underscored the role of government-owned and controlled corporations (GOCC) in fostering fair competition with the private sector.

He said competitive neutrality should be maintained among GOCC as they carry out their proprietary and commercial functions and pave the way for the private companies to carry out their commercial pursuits.

“GOCC should adopt structural measures to address any identified anti-competitive behavior relating to their mandate and operations,” Pernia said.

Pernia, who is also Director-General of the National Economic Development Authority (NEDA), noted that competitive neutrality requires GOCC operating as a business to compete with private firms on a level playing field, without enjoying preferential treatment in commercial activities that could put the private sector at a disadvantage.

He also said transparency must be observed in the procurement processes. Procurement laws, rules and regulations be applied equally and equitably on GOCC and firms in the private sector.

The Governance Commission for GOCC is tasked to review the mandate of GOCC and study possible conflicts in their proprietary and regulatory functions or role as operator and regulator.

Proprietary or commercial functions enable GOCC to earn or derive income while regulatory functions are those that enable them to set rules in their specific sector or market.

In relation to Pernia’s call, the NEDA said it has drafted a National Competition Policy designed “to enhance market competition by fostering an environment that facilitates entry of business players.”