Power Point Presentation of BPA B31 (Finals)

1. Public
Administration
TOPIC:CHARACTERISTIC AND
POWERS OF GOCC,
CLASSIFICATION OF GOCC AND
RELATIONSHIP WITH THE
LOCAL GOVERNMENT.

2. PUBLIC ADMINISTRATION
WHAT IS GOCC?
-Government-owned and controlled corporation
WHY GOCC CREATED?
- Grounded on the idea that market failures do
exist and government needs to intervene to
protect the public interest.
- What is Market Failure?
- Market failure is the economic situation
defined by an inefficient distribution of goods
and services in free market.

3. MARKET FAILURE
6 SITUATIONS WHERE MARKET FAILURE
ARISES.
1. FAILURE OF COMPETITION
2.PUBLIC GOODS
3.EXTERNALITIES
4.INCOMPLETE MARKETS
5.INFORMATION FAILURES
6. UNEMPLOYMENT

4. FAILURE OF COMPETITION
MONOPOLY
It is a form of market where there is a single seller
selling a particular commodity for which there are no close
substitution of there product. (e.g. Meralco, Manila Water
Company, Inc., or Maynilad Water Services)
OLIGOPOLY
It is a characterized by few seller dominate the market
and have control over the price of the product. (e.g. DITO
Telco, PLDT, Smart or etc.)
MONOPOLISTIC
Monopolistic competition occurs when an industry has
many firms offering products that are similar but not identical.
(e.g. Apple Store)

5. PUBLIC GOODS
It is refers to commodity or service that is made available
to all members of the society.
There are two(2) characteristics of Pure Public Goods:
 Non-Excludability
It is impossible to exclude individuals from enjoying the benefits of the
goods.
 Non-Rival Consumption
The marginal cost of an additional individual enjoying the goods is zero
and does not reduce the amount available for other.
(e.g. street lights, Flood Control System, National Defense, Clean Air, Roads)

6. EXTERNALITIES
 Any valued impact (positive/negative) resulting from any action
(whether related to production or consumption) that affects someone
who did not fully consent to it through participation in voluntary
exchange.
 Two(2) Types of Externalities
 Positive Externalities
which individual’s actions confer a benefit on others.
E.G
 EDUCATION
 VACCINATION
 INSURANCE
 Negative Externalities
which individual’s action impose a cost on others.
E.G.
PASSIVE SMOKING
PANDEMIC
NOISE POLLUTION

7. INCOMPLETE MARKETS
Markets for certain things are incomplete or missing
under perfect competition.
The absence of markets for such things as public
goods and common property resources is a cause of
market failure.
There is no way to equate their social and private
benefits and costs either in the present or in the future
because their markets are incomplete or missing.

8. INFORMATION FAILURES
 Markets may not provide enough information because, during a
market transaction, it may not be in the interests of one party to
provide full information to the other party.
E.G.
Misunderstanding the true costs or benefits of a product: E.g. the
side effects of using tanning salons or painkillers.
Inaccurate or misleading information - persuasive advertising may
'oversell' the benefits of a product leading to more consumption
than is optimal. Spam mail can be a cause of misinformation for
consumers.
Addiction e.g. drug addicts may be unable to stop consumption of
harmful substances

9. UNEMPLOYMENT
 This means that a change in the structure of industry leaves some
people unable to respond by changing job, industry, or location and
as a result, they remain temporarily or permanently unemployed.
 Labor immobility
It means that labor does not ‘move’ to where it is in greatest
demand.
Three(3) types of Labor Immobility
Geographical immobility – it occurs when workers are not willing or
able to move from region to region, or town to town.
Industrial immobility – it occurs when workers do not move
between industries, such as moving from employment in the motor
industry to employment in the insurance industry.
Occupational immobility – it occurs when workers find it difficult to
change jobs within an industry.

10. CHARACTERISTICS AND
POWER OF GOVERNMENT-
OWNED AND CONTROLLED
CORPORATION

11. CHARACTERISTICS OF GOCC
 To give and take – in a way rendering a services but not for
free.
 Improve the quality of products and services of the
organization
 Sustain the needs of the public
 Do not have an activities that are in competition with private
sector.

12. Power and Function of GOCC
 Evaluate the performance and determine the relevance of the
GOCC, to ascertain whether such GOCC should be organized,
merged, streamlined, abolished, or privatized.
 Filing criminal and administrative charges of its
directors/employees
 Conduct periodic study, examination, evaluation and
assessment of performance of GOCCs.
 Review function of each the GOCC and, upon determination
that there is conflict between regulatory and commercial
functions of GOCC
 Prepare semi-annual progress report to be submitted to the
President and Congress.

13. CLASSIFICATION OF
GOVERNMENT-OWNED AND
CONTROLLED
CORPORATION

14. CLASSIFICATION OF GOCC
 Government Financial Institutions Sector
 Trade, Area Development and Tourism Sector
 Educational and Cultural Sector
 Gaming Sector
 Energy and Materials Sector
 Agriculture, Fisheries and Food Sector
 Utilities and Communications Sector
 Healthcare Services Sector
 Realty and Holding Companies
 GOCCs by PCGG
 Under Privatization
 Non-Operational or Inactive
 Under Abolition
 Dissolved or Abolished
 GOCCs Disposed by PMO
 GOCCs exclude from the coverage of RA no. 10149

15. RELATIONSHIP WITH THE
LOCAL GOVERNMENT

16. RELATIONSHIP WITH THE
LOCAL GOVERNMENT
 Section 3 of R.A. 7656 require all GOCC to remit 50% of
annual net earning in cash, stock or property dividends to
national government.
35.7 billion collected from GOCC in 2009 or 25.3% of total non-
tax revenue.
 GOCC’s constitutes expenditures, they deemed to be entitled
to financial support in form of subsidies, equity infusion and
lending.
23.8 Billion of financial aid or 1.7% in government budget in
2009.