Restating the Privatization Policy of the Government

December 2, 1992 EXECUTIVE ORDER NO. 37 RESTATING THE PRIVATIZATION POLICY OF THE GOVERNMENT WHEREAS, Proclamation No. 50, s. 1986, launched a program for the disposition and privatization of government corporations and/or the assets thereof and created the Committee on Privatization (COP) and the Asset Privatization Trust (APT). WHEREAS, Republic Act No. 7181, s. 1992, extended the life of the COP and APT from December 8, 1991 up to December 31, 1993; WHEREAS, Administrative Order Nos. 8 and 9, s. 1992, directed the identification of idle government properties and recommended to the President an action plan for the disposition of such properties; WHEREAS, 122 government owned or controlled corporations (GOCCs) were approved for privatization while 179 GOCCs were identified for retention, abolition, regularization or other dispositive modes; WHEREAS, of the 122 GOCCs for privatization, 72 GOCCs were privatized/disposed as of September 30, 1992 generating gross sales proceeds of P22 billion; WHEREAS, 399 transferred assets were entrusted to APT for disposition, of which 288 were privatized/disposed as of September 30, 1992, generating gross sales proceeds of P31 billion; WHEREAS, the privatization program has proven successful and beneficial to the economy in terms of expanding private economic activity, improving investment climate, broadening ownership base and developing capital markets, and generating substantial revenues for priority government expenditures; WHEREAS, there is still such potential for harnessing private initiative to undertake in behalf of government certain activities which can be more effectively and efficiently undertaken by the private sector; NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. Restatement of Policy . The National Government hereby reaffirms its privatization policy to promote an orderly, coordinated and efficient program for the privatization of government entities, assets or activities which are better managed, undertaken or owned by the private sector. SECTION 2. Privatization of GOCCs approved for Disposition . Pursuant to the principles provided in Proclamation No. 50, s. 1986, the COP designated disposition entities shall submit to the COP a privatization action plan for all GOCCs approved for divestment as listed in Annex "A" within one month (1) from issuance hereof; Provided, that said action plan must contain a description of the privatization process to be adopted and a time frame for each step thereof. Said action plan shall include an offer to sell the company's shares/assets within five (5) months from its approval by the COP. cd SECTION 3. Review of GOCCs for Retention . The Government Corporate Monitoring and Coordinating Committee (GCMCC) shall review the need to retain the GOCCs which were previously approved for retention, including but not limited to those listed in Annex "B" hereof, and submit its recommendation of companies, activities or assets thereof of a second group of GOCCs for privatization, to the COP within two (2) months from issuance hereof. SECTION 4. Designation of Disposition Entity . The COP shall review the list of disposition entities designated for the privatization of GOCCs and designate another disposition entity, such as the APT or the National Development Company (NDC) if it is necessary for the effective and expeditious privatization of certain GOCCs. SECTION 5. Sale of Idle Government Properties . The Committees created pursuant to Administrative Order Nos. 8 and 9, s. 1992, shall submit its recommended action plan for the disposition of idle government properties to the President, through the COP, within three (3) months from issuance hereof. SECTION 6. Privatization of Other Activities . All heads of departments, bureaus, agencies and other government corporations shall identify their assets or activities which may be more efficiently, effectively and economically undertaken by the private sector through such arrangements as sale of physical assets, leasing of assets, management and maintenance contracts or build-operate-transfer (BOT) schemes. Where these are within their competence, they shall implement such privatization directly. Where these require actions of the Office of the President or legislation, they shall submit their recommendations to the COP not later than three (3) months from issuance hereof. Where further assistance is needed, they may consult the COP and avail of grants for technical assistance for privatization, administered by the Department of Finance. SECTION 7. Distribution of Net Proceeds . Except for subsidiaries of the Government Service Insurance System and the Social Security System, all GOCCs shall remit to the National Government at least fifty per cent (50%) of the net proceeds derived from the sale of shares of assets effective October 1, 1992. Net proceeds shall mean gross proceeds less related liabilities and selling expenses. SECTION 8. Implementing Rules . The COP shall issue the necessary rules and regulations for the implementation of this Order within thirty (30) days from issuance hereof. SECTION 9. Effectivity . This Order shall take effect immediately. DONE in the City of Manila, this 2nd day of December, in the year of Our Lord, Nineteen Hundred and Ninety-Two. Published in the Official Gazette, Vol. 89 No. 1 Page 2 on January 4, 1993. REMAINING GOCCs FOR PRIVATIZATION CORPORATION AREA OF ACTIVITY ASSET PRODUCTION TRUST 1. APO Production Unit Inc. Printing services 2. Associated Bank Commercial banking 3. Basin Dredging and Development Corporation Dredging and reclamation 4. Bicolandia Sugar Development Corporation Sugar milling 5. East Visayas Agricultural Projects, Inc. Swine, poultry, farming 6. Leyte Park Hotels, Inc. Hotel operations 7. Northern Foods Corp. Tomato paste production 8. Philippine Fruit and Vegetable Industries Inc. Tomato paste production 9. Philippine Shipyard Engineering Corp. Ship repair and fabrication of steel prod. 10. Philippine Sugar Corporation Finance acquisition, rehab/expansion of sugar mills 11. Phividec Panay Agro-Industrial Corp. Plantation farming/fertilizer production and trading 12. Ridge Resort and Convention Center, Inc. Resort and convention facility mgt. 13. San Carlos Fruit Corp. Fruit puree production DEVELOPMENT BANK OF THE PHILIPPINES 1. DBP Data Center Inc. Dev't. and mgt. of DBP computer sys. and personnel 2. Philippine Amanah Bank Commercial banking DEPARTMENT OF AGRICULTURE 1. Food Terminal, Inc. Food, trading, processing, storage, real estate mgt. 2. Republic Transport And Shipyard Corp. Sugar terminal and shipyard operation DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS 1. Metro Manila Transit Corp. Passenger bus operation and leasing 2. Philippine Aerospace Development Corp. Aircraft mgt., maintenance eng., selling 3. Philippine Helicopter Services Inc. Maintenance and overhaul of helicopters GOVERNMENT SERVICE INSURANCE SYSTEM 1. Manila Hotel Corporation Hotel operation and management 2. Meat Packing Corporation of the Philippines Meat processing/canning NATIONAL DEVELOPMENT COMPANY 1. Batangas Land Company Inc. Land ownership 2. GY Real Estate Inc. Land ownership 3. Kamayan Realty Corp. Land ownership 4. Nadeco Realty corp. Land ownership 5. National Steel Corp. Steel production 6. National Trucking and Forwarding Corp. Trucking, freight forwarding 7. NDC-Guthrie Estates, Inc. Palm oil production 8. NDC-Guthrie Plantations, Inc. Palm oil production 9. Philippine Associated Smelting and Refining Corp. Copper smelting and refining 10. Philippine Phosphate Fertilizer Corp. Fertilizer production 11. Philippine Plate Mills Company, Inc. Manufacturing of steel plates 12. Philippine Pyrite Corp. Production of pyrite concentrates 13. Pinagkaisa Realty Corp. Land ownership 14. Refractories Corporation of the Philippines Production of basic refractories 15. Semirara Coal Corp. Coal mining PRESIDENTIAL MANAGEMENT STAFF 1. Integrated Food Mills Corp. Feed production 2. Marawi Resort Hotel Inc. Hotel operation 3. Mindeva Coco-Coir Industries, Inc. Production of coco-coir fiber product 4. Mountain Springs Development Corp. Swine raising 5. Panaon Prawn Development Corp. Prawn pry and larvae raising 6. Shoe Technology Corp. Footwear manufacturing PHILIPPINE NATIONAL OIL COMPANY 1. Filoil Industrial Estates Inc. Land ownership 2. Filoil Refinery Corp. Oil refining 3. Malangas Coal Corp. Coal refining Int'l. 4. PNOC Oil Carriers, Inc. Oil Tanker operation NATIONAL IRRIGATION AUTHORITY 1. NIA-Consult, Inc. Consultancy, mgt. and special services of projects Source: Committee on Privatization October 31, 1992. ANNEX "B" LIST OF RETAINED GOCCs As of 31 August 1992 NAME OF CORPORATIONS OFFICE TO W/C ATTACHED 1 National Food Authority DA 2 National Irrigation Administration DA 3 National Tobacco Administration DA 4 Philippine Coconut Authority DA 5 Philippine Fisheries Development Authority DA 6 Philippine Rice Research Institute DA 7 Quedan and Rural Credit Guarantee Corporation DA 8 Sugar Regulatory Administration DA 9 National Electrification Administration DENR 10 Natural Resource Development Corporation DENR 11 Philippine Veterans Assistance Commission DND 12 Philippine Veterans Bank DND 13 Philippine Veterans Investment Development Corporation DND 14 Phividec Industrial Authority DND 15 Veterans Federation of the Philippines DND 16 Philippine Crop Insurance Corporation DOF 17 Philippine Export & Foreign Loan Guarantee Corporation DOF 18 Lung Center of the Philippines DOH 19 National Kidney Institute DOH 20 Philippine Children's Medical Center DOH 21 Philippine Heart Center DOH 22 Employees Compensation Commission DOLE 23 Philippine Convention & Visitors Corporation DOT 24 Philippine Tourism Authority (Including Duty Free Shops, other assets or subsidiaries) DOT 25 Light Rail Transit Authority DOTC 26 Manila International Airport Authority DOTC 27 Philippine National Railways DOTC 28 Philippine Ports Authority DOTC 29 Postal Service Corporation DOTC 30 Local Water Utilities Administration DPWH 31 Metropolitan Waterworks & Sewerage System DPWH 32 Asean Copper Products, Inc. DTI 33 Center for International Trade & Exposition Mission, Inc. DTI 34 Cottage Industries Technology Center (Formerly NACIDA) DTI 35 Export Processing Zone Authority DTI 36 National Development Company DTI 37 a. Manila Gas Corporation DTI 38 a.1. Inter-Island Gas Service, Inc. DTI 39 a.2. Pagkakaisa Gas Storage Corporation DTI 40 b. Philippine International Trading Corporation DTI 41 Small Business Guarantee and Finance Corporation DTI 42 Home Development Mutual Fund HUDCC 43 Home Insurance and Guarantee Corporation HUDCC 44 National Home Mortgage Finance Corporation HUDCC 45 National Housing Authority HUDCC 46 Philippine Deposit Insurance Corporation NEDA 47 Philippine Institute for Development Studies NEDA 48 Bases Conversion and Development Authority OP 49 Central Bank of the Philippines OP 50 a. Philippine International Convention Center, Inc. OP 51 b. Private Debt Restructuring & Repayment Corporation OP 52 Cultural Center of the Philippine OP 53 Development Academy of the Philippines OP 54 Development Bank of the Philippines OP 55 Government Service Insurance System OP 56 Land Bank of the Philippines OP 57 a. LBP Insurance Brokerage, Inc. OP 58 b. LBP Leasing Corporation OP 59 c. Lumang Bayan Realty Development Corporation OP 60 d. Masaganang Sakahan, Inc. OP 61 Livelihood Corporation OP 62 National Agri-Business Corporation OP 63 National Power Corporation OP 64 PAGCOR Services, Inc. OP 65 People's Television Network, Inc. OP 66 Philippine Center for Economic Development OP 67 Philippine National Oil Company OP 68 a. Petron Corporation OP 69 b. Petron Tankers Corporation OP 70 c. Petrophil Tankers Corporation OP 71 d. PNOC Energy Development Corporation OP 72 e. PNOC Exploration Corporation OP 73 f. PNOC Shipping & Transport Corporation OP 74 g. PNOC Tankers Corporation OP 75 Philippine Retirement Authority OP 76 Public Estates Authority OP 77 Social Security System OP 78 Southern Philippines Development Authority OP 79 Strategic Investment Development Corporation OP 80 Subic Bay Metropolitan Authority OP 81 Technology & Livelihood Resource Center OP