1. BACKGROUND AND PURPOSES

1.1 With Executive Order No. 43, s. 2011 as its legal basis, the GCG issued Memorandum  Circular (MC) No. 2013-03 (Re-Issued)  on 21 February 2014 to:

œ(a) Balance the principle of operational autonomy in the GOCC Sector with the need for inter-agency coordination towards paving the way for the convergence  of  the  GOCC  Sector  and  the  National  Government  in pursuing inclusive and sustainable economic growth and development;

(b)  Clarify  in  operational  terms  the  interfacing  of  RA  No.  10149  with  the œPublic-Private  Partnership  (PPP) Law  (R.A. No. 7718) which requires every GOCC, whether Chartered or Nonchartered, to submit for approval their PPP Projects to the Investments  Coordination  Committee  (ICC) of the National Economic Development Authority (NEDA) and/or the NEDA Board, regardless of whether such projects are part of a GOCC ™s list of priority projects or corporate plans; and

(c)  Address  policy  gaps  wherein  Major  Development   Projects  or  Major Contracts  may be ancillary to the primary purpose of a GOCC and yet are not required under existing laws to go through any competitive or regulatory process, such as but not limited to, leasing out government property  to  a private  sector  entity  under  Executive  Order  No.  301,  s. 1987; 

1.2 On 16 May 2017, President Rodrigo R. Duterte issued Executive Order (EO) No. 24, s. 2017, amending EO No. 43, s. 2011, reorganizing the Cabinet into six (6) clusters  in order to œstreamline  their functions  and improve  existing procedures to achieve a more efficient and effective integration of programs, activities,  and  priorities   and  with  the  objective  to,  among  others,  œregain people ™s trust in public institutions and cultivate trust among fellow Filipinos, which could be achieved by streamlining and reengineering the efforts of the various Executive Departments .^[1]

1.3 The GCG, as an attached agency to the Office of the President, was created by  Republic  Act  No.  101492   and  is  the  central  advisory,  monitoring,  and oversight body with authority to formulate, implement and coordinate policies for GOCC.

1.4 The current Commission has determined that there is a need to revisit GCG MC No. 2013-03 in light of the above-mentioned purposes of E.O. 24 and the following antecedent circumstances:

1.4.1  In consideration of the President ™s policy to expedite development and the implementation  of infrastructure  projects  under the public-private Partnership (PPP) scheme,^[3]   an appropriate policy is essential to guide the  GOCCs  in  aligning  with  the  Philippine  Development  Plan  and thereby efficiently contribute to the nation ™s economic growth; and

1.4.2 In his inaugural speech, the President has ordered all department secretaries and heads of agencies to œremove redundant requirements and  [that]  compliance   with  one  department   or  agency,   shall  be accepted as sufficient for all ;^[4]   thus, amendment of policies will guide the GOCCs to a simplified and efficient implementation  of their major development projects.

2. DECLARATION OF POLICIES

2.1 R.A. No. 10149 has declared that the state shall ensure:

2.1.1  The operations of GOCCS are rationalized and monitored centrally in order that government  assets and resources  are used efficiently  and the government  exposure to all forms of liabilities including subsidies is warranted and incurred through prudent means;^[5]

2.1.2  The governance of GOCCs is carried out in a transparent, responsible and     accountable    manner    and    with    the    utmost    degree    of professionalism and effectiveness;^[6]   and

2.1.3 A reporting and evaluation system, which will require the periodic disclosure and examination of the operations and management of the GOCCs,  their  assets  and  finances,  revenues  and  expenditures,  is enforced.^[7]

2.2 The GCG, as provided in R.A. No. 10149, has, among others, the following powers and functions:

2.2.1  Conduct  periodic  study,  examination,  evaluation  and  assessment  of the  performance  of the  GOCCs,  receive,  and  in appropriate  cases, require reports on the operations and management of the GOCCs including,  but  not  limited  to,  the  management   of  the  assets  and finances of the GOCCs;^[8]   and

2.2.2  Coordinate and monitor the operations of GOCCS, ensuring alignment and consistency    with    the   national    development    policies    and programs.^[9]

2.3 R.A.  No.  10149 also tates the following duties,  obligations, and responsibilities  of the members of the GOCC ™s Board of Directors/Trustees, in addition to the powers and functions provided in the individual charters or articles of incorporation and by-laws of the respective GOCCs:

2.3.1  As fiduciaries of the State, members of the Board of Directors/Trustees and  the  Officers  of  GOCCs  have  the  legal  obligation  and  duty  to always act in the best interest of the GOCC, with utmost good faith in all its dealings with the property and monies of the GOCC.^[10]

2.3.2 The  members  of  the  Board  and  the  Officers  must  exercise extraordinary  diligence in the conduct of the business and in dealing with the properties of the GOCC. Such a degree of diligence requires using the utmost diligence  of every cautious  person with due regard for all circumstances.^[11]

3. REVOCATION OF GCG MC NO. 2013-03

3.1 Upon  due  evaluation  by the GCG,  proposed  Major  Development  Projects and Major Contracts  of GOCCS  lie within the sound business  judgment  of the respective Governing Boards of the GOCCs. The Governing Boards are mandated by existing laws, rules, and regulations to exercise extraordinary diligence in the conduct of the business and in dealing with the properties of their respective GOCCs.

3.2 GCG MC. No. 2013-03 contains provisions and processes that unnecessarily impede the timely approval and implementation  of government projects. It is the government's priority to streamline its processes to ensure effective and timely implementation of projects to guarantee the immediate delivery of adequate and reliable government services.

3.3 THE  GOVERNANCE  COMMISSION HEREBY  RESOLVES  TO  REVOKE GCG MC NO. 2013-03 (RE-ISSUED).

4.  GOCC SUBMISSIONS TO OTHER GOVERNMENT AGENCIES.

4.1 Major Development  Projects and Major Contracts of GOCCs shall continue to fall under the review and decision-making  process  of the NEDA, NEDA lCC, and/or the NEDA Board, pursuant to all applicable existing laws, rules and  regulations,  including  any  amendments  and  changes  therein  in  the future.

4.2 In addition,  GOCCs with Major Development  Projects  and Major Contracts shall also submit the same to the Economic Development Cluster (EDC), whenever  applicable,  subject  to applicable  existing  laws,  rules  and regulations.

4.3 GOCCs shall ensure that all agreements entered by them including, but not limited to, those involving Major Development  Projects and Major Contracts shall  not  be  grossly  disadvantageous   to  the  government.  The  required favorable   legal   opinion   and/or   contract   review   by   the   Office   of   the Government  Corporate  Counsel  (OGCC)  shall  be  secured  by  the  GOCC before entering into said agreements.

4.4 All  other  required  approvals,  evaluations,  and  studies,  as  mandated  by applicable  laws, rules, and regulations  shall be submitted  by the GOCC to the relevant government agency.

5.    GOCC  SUBMISSIONS  TO  GCG.  -  GOCCs  covered  by  RA  10149  shall submit (both in hardcopy and electronic form) to the GCG a briefer of all Major Development Projects and Major Contracts for purposes of monitoring GOCC performance and asset utilization. The said briefer shall contain the following:

(i)   Description of the Project/Contract;

(ii) Enumeration  of funding  and  other  resource  requirements,  and  the source thereof (if applicable);

(iii)  Location map (if applicable);

(iv) Favorable legal pinion and/or contract review by the Office of the Government Corporate Counsel (OGCC); and,

(v)  Other aspects deemed important for consideration  by the GOCC Governing Board.

For projects or contracts involving properties of GOCCs with an area of less than one (1) hectare, GOCCs shall submit items (i) to (v) above on a quarterly basis. For properties  with  an area  of one  (1) hectare  or more,  GOCCs  shall  submit items (i) to (v) above, together  with the copy of the agreement/contract,  within fifteen  (15) days from the GOCC ™s  receipt  of the legal opinion  and/or  contract review   of  the  OGCC.   All  current/existing   contracts   involving   properties   of GOCCs, regardless of area size, shall be submitted to the GCG within three (3) months from the effectivity of this Memorandum Circular GOCCs shall likewise submit all other documents that the GCG may require from time to time.

6.  REPEALING CLAUSE. All other GCG orders, circulars, issuances, and decisions,  or  parts  of  the  foregoing,  which  are  inconsistent  with  this Memorandum Circular are hereby repealed or modified accordingly

7.   EFFECTIVITY CLAUSE. This circular shall take effect immediately upon its publication in the Governance Commission ™s website at  www.gcg.gov.ph.

(SGD) SAMUEL G. DAGPIN, JR. Chairman	(SGD) CARLOS G. DOMINGUEZ DOF Secretary
(SGD) MICHAEL P. CLORIBEL Commissioner	(SGD) BENJAMIN E. DIOKNO DBM Secretary
(SGD) MARITES C. DORAL Commissioner

^[1] See œWhereas  Clauses of EO 24, s. 2017

^[2] GOCC Governance Act of 2011.

^[3] http://manilastandard.net/business/208836/duterte-to-expedite-ppp-deals.html

^[4]   http://newsinfo.inquirer.net/793344/full-text-president-rodrigo-duterte-inauguration-speech

^[5]    Section 2(b), R.A. No. 10149;

^[6]   Section 2(c), R.A. No. 10149;

^[7] Section 2(d), R.A. No. 10149;

^[8]    Section 5(g), R.A. No. 10149;

^[9]   Section 5(j), R.A. No. 10149;

^[10] Section 19, R.A. No. 10149;

^[11] Section 21, R.A. No. 10149;