Philippines cracks whip on state-run 'white elephants'
Philippines cracks whip on state-run 'white elephants'
Agence France-Presse/Manila
Government-run corporations blamed for contributing to a looming fiscal crisis in the Philippines should reverse huge losses or risk being abolished or privatized, President Gloria Arroyo's spokesman said on Monday.
"The ball is in the court of the losing government firms," presidential spokesman Ignacio Bunye said in a statement.
He said the board and management of the companies in question are being given a "fair chance" to turn around their performance and make a profit or they will preside "over the abolition or privatization of the hopeless cases."
"They must repay the trust and confidence bestowed upon them by he national leadership and the people by meeting pressing expectations of performance and managerial ability," Bunye said.
The warning came a day after Budget Secretary Emilia Boncodin identified at least 15 government-owned and -controlled corporations and financial institutions as being the most to blame for Manila's ballooning debt.
The agencies, she said, were inefficient, have insufficient funds to cover operations and money-losing subsidiaries while their charters prevent them from increasing revenue.
Among those bleeding red ink are the state utility National Power Corp. Others are the operators of two railway systems, the irrigation administration, three housing agencies, officers overseeing the tobacco and coconut industries as well as the Philippine National Oil Corp. and the state-run Islamic Bank.
Boncodin on Sunday said the budget and finance departments were to conduct a joint review of the firms before deciding what to do with them.
The heads of these agencies should start looking for ways to improve their finances as the government would no longer subsidize "inefficiently run corporations," she said.
Among measures being considered are to merge money-losing institutions with other firms, streamlining or deactivating them and transferring some of their functions.
Arroyo has previously said the Philippines was "in the midst of a fiscal crisis" amid a widening budget deficit and huge debts.