DoF Identifies 10% of GOCCs for Potential Abolition to Optimize Public Resources

The Department of Finance (DoF) has indicated that approximately 10% of government-owned and -controlled corporations (GOCCs) may be abolished due to underperformance and inefficient use of public funds. Finance Secretary Frederick D. Go emphasized that GOCCs failing to fulfill their mandates effectively or those that unnecessarily drain government resources should either be dissolved or have their functions transferred to other agencies. This move aims to reallocate public resources toward programs and services that provide greater benefits to the population.

In a recent radio interview, Secretary Go noted that the government oversees over 100 GOCCs, and about 10% of these are either slated for closure or are already undergoing the process. He acknowledged that the abolition process within government requires adherence to formal procedures, which can slow progress. Nonetheless, the objective remains to streamline operations and improve fiscal efficiency.

GOCCs often rely on monthly subsidies from the National Government to sustain their operations when their revenues fall short. In June 2026, subsidies to these corporations more than doubled compared to the same month in the previous year, reaching P16.56 billion. Despite this increase in subsidies, dividend remittances from GOCCs have reached unprecedented levels during the current Marcos administration.

Secretary Go reported that the government collected a total of P147 billion in dividends from government financial institutions and GOCCs in the recent period. Over the first four years of the administration, total remittances amounted to P501 billion, a figure substantially higher than those recorded in previous administrations: P84 billion during Arroyo’s term, P164 billion under Aquino, and P382 billion during Duterte’s tenure. The current administration’s average annual dividend collection stands at P125.36 billion.

Turning to the broader economy, Secretary Go highlighted plans to accelerate infrastructure spending in the latter half of 2026 to stimulate growth. He attributed the recent slowdown in economic expansion primarily to reduced public spending since the president’s last State of the Nation Address. The government is now prioritizing the restoration of public expenditure, particularly on infrastructure projects.

Economic data showed that the Philippine economy grew by only 2.3% in the second quarter of 2026. This slowdown was driven by elevated inflation, which suppressed household consumption, and a sharp decline in public construction that weighed on investment. The growth rate lagged behind the 5.4% expansion recorded in the same quarter a year earlier and the 2.8% growth in the first quarter of 2026. Consequently, the economy’s growth for the first half of the year stood at 2.6%, falling short of the government’s revised target range of 3.5% to 4.5%.

Public construction activity contracted by 32.4% in the second quarter, as infrastructure agencies exercised caution following a flood control corruption scandal that emerged the previous year. Despite these challenges, Secretary Go pointed out that the gross domestic product (GDP) growth averaged 5.8% during the first four years of the Marcos administration, outperforming the global average GDP growth of 2.5% to 3%.

He acknowledged that growth slowed somewhat over the past three years but expressed optimism about the future trajectory. Secretary Go projected that the country would resume a growth rate of 5% to 6% starting in 2027 and continuing through 2028, signaling a return to stronger economic performance.