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QUESTIONS & ANSWERS on the PRIVATIZATION OF THE INTERCONTINENTAL BROADCASTING CORPORATION (IBC-13)

POSTED LAST 25 Jan 2016 - 11:41 am

Q: Why should the State own a television broadcasting company?

A: A state-owned broadcaster ensures supply of free-to-air broadcasting for the public regardless of ability or willingness to pay. It also ensures that the public is provided with welfare-enhancing programs balanced against programs driven purely by advertising and business motives.

      In 2013, the state-owned broadcast network, People’s Television Network, Inc. (PTNI or commonly known as PTV-4), was revitalized under R.A. No. 10390. The law addressed its problem of depleting capital by directing the proceeds from the privatization of the State’s equity holdings in Radio Philippines Network (RPN-9) and IBC-13 to fund the capitalization of PTV-4.

      In turn, PTV-4 is regularly monitored under the Performance Evaluation System (PES) of the Governance Commission.

      RPN-9 is a private corporation with the State only owning a minority share.

Q: What are the reasons for privatizing a GOCC?

A: Under Section 5(a) of R.A. No. 10149, the GCG shall be guided by any of the following standards for the abolition to evaluate the performance and to determine the relevance of a GOCC:

  • The functions or purposes for which the GOCC was created are no longer relevant to the State or no longer consistent with the national development policy of the State;
  • The GOCC’s functions or purposes duplicate or unnecessarily overlap with the functions, programs, activities, or projects already provided by a Government Agency;
  • The GOCC is not producing the desired outcomes, or no longer achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical, and economic returns vis-à-vis the resource inputs;
  • The GOCC is in fact dormant or nonoperational;
  • The GOCC is involved in an activity best carried out by the private sector; and
  • The function, purpose, or nature of operations of any group of GOCCs requires consolidation under a holding company.

Q: Why was IBC-13 privatized? Which of these criteria did the IBC-13 meet?

A:  IBC-13 was evaluated and found to meet the following criteria:

MANDATE/PURPOSE

REASONS FOR PRIVATIZATION

  • To provide adequate public service time to enable the government, through the said broadcasting stations or facilities, to reach the population on important public issues.
  • Functions or purposes duplicate or unnecessarily overlap with the functions, programs, activities, or projects already provided by a Government Agency (i.e. PTV-4)
  • The GOCC is involved in an activity best carried out by the private sector (the State only needs one television broadcasting company to meet its limited purpose).
  • The GOCC is not producing the desired outcomes, or no longer, achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical, and economic returns vis-à-vis the resource inputs

Despite being subsidized by the government, IBC-13 was found to be operating at an average net loss of P 45.26 million from 2010 to 2014.

 (In P Millions)

2010

2011

2012

2013

2014

 Revenues

120.031 

203.065 

276.999 

183.825 

73,662 

 Expenses

213.244 

204.020 

243.851 

244.777 

171,447 

 Net Income (Loss)

(92.213) 

(0.956) 

33.148 

(60.952) 

(97.785) 

Nonetheless, the company still has commercial value as a broadcasting company, making it a proper subject for privatization.

Q: How will the privatization proceed?

A: The privatization will be done through public bidding, which will be implemented by an inter-agency committee composed of representatives from GCG, the Presidential Communications Operations Office (PCOO), and IBC-13.

 

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

[email protected]

www.gcg.gov.ph