The Philippine Government is committed to a free market economy. There is, however, significant direct government involvement in the country’s economic activity through both economic planning and the state-ownership of numerous corporations involved in certain strategic sectors, such as banking, power-generation, oil production and transportation.
Structural reforms have been instituted in the public sector since 1986. The government embarked on a privatization program that was authorized under Proclamation No. 50 issued on December 8, 1986. This program was implemented by the Asset Privatization Trust (APT) under the guidance of an inter-agency Committee on Privatization (COP) and intended to reduce substantially the size of the government corporate sector by limiting government corporations to areas where private sector involvement is not feasible, or where intervention can favor disadvantaged sectors of society. The term of the COP and APT expired on December 31, 2000.
On December 6, 2000, then President Joseph E. Estrada issued Executive Order No. 323, creating the Privatization Council (PrC) and the Privatization and Management Office (PMO). The PrC succeeded the COP and is now the central agency of the government responsible for oversight of the government’s privatization program. The PrC is responsible for formulating policies and general guidelines on privatization issues, identifying disposable assets, monitoring the progress of privatization activities and approving the sale or divestment of assets with respect to price and buyer.
The marketing of the assets or companies is handled by various disposition entities with PMO at the forefront. The arrangement between the PrC as the policy-making body and various disposition entities handling the marketing of assets serves as the check and balance.
Since its inception in December 1986, the program has caused an increase in investments, broadened the ownership base of government assets, developed the domestic capital markets and generated revenues. As of July 31, 2001, the government has generated gross revenues of P 200.76 Billion from the privatization of 480 government-owned assets and corporations out of approximately 575 accounts that had been approved for privatization.