Withdrawal of Subsidy Availment in Case of Privatization and Requirement of Certification from the Committee on Privatization as to Status of Privatization

September 25, 1992 FIRB RESOLUTION NO. 035-92 SUBJECT : Withdrawal of Subsidy Availment in Case of Privatization and Requirement of Certification from the Committee on Privatization as to Status of Privatization WHEREAS, subsidy availment is generally resorted to by government corporations as a means by which to discharge their tax and duty liabilities; WHEREAS, the FIRB on the basis of certain justifications has endorsed subsidy availment to such government corporations; WHEREAS, the FIRB has adopted the policy that the provisions of subsidy availment cannot be utilized by private entities in view of the constitutional limitation on the use of government funds for strictly public purposes; WHEREAS, there is a need to reiterate the foregoing policy in view of the fact that some government corporations have been lined up for privatization purposes; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, That all provisions of subsidy availment in favor of any government corporation shall be deemed automatically withdrawn on the date when its privatization becomes effective, i.e., on the date when the elements of government control (when the majority or all of the members of the governing body of the corporation are appointed by the President of the Philippines in their individual capacity or as ex-officio) or ownership (when government owns at least 51 per cent of the capital) are lost and/or phased out. BE IT FURTHER RESOLVED, AS IT IS HEREBY RESOLVED, That in order to effectively implement the foregoing provision, all applications for subsidy availment of government corporations that have been lined up for privatization purposes shall be accompanied by a certification from the Technical Board of the Committee on Privatization or its Chairman, as regards the continued compliance by the subsidy applicant with the elements of government control or ownership, as defined in the preceding paragraph. (SGD.) MA. CECILIA G. SORIANO Acting Secretary of Finance Chairman FIRB References : FIRB Technical Committee Meeting dated July 21, 1992 and August 28, 1992 FIRB Meeting dated August 6, 1992 and September 11, 1992