POSTED LAST 03 Sep 2018 - 05:56 pm

(Released on 03 September 2018)

The Governance Commission clarifies that GCG Memorandum Circular (M.C.) No. 2018-02 was issued to revoke GCG M.C. No. 2013-03 (Re-Issued) after its evaluation that the revoked M.C. contained provisions and processes that unnecessarily impede the timely approval and implementation of government projects.

The GCG regularly reviews its existing circulars and policies in keeping with its mandate to ensure the alignment and consistency of the GOCCs’ operations with the national development policies and programs, resulting to a more efficient and effective integration of programs, activities and priorities of the GOCCs.

In consideration of the current Administration’s policy to remove redundant requirements and align the development and implementation of infrastructure projects under the Private-Public Partnership (PPP) scheme, the Governance Commission issued GCG M.C. No. 2018-02 to effectively streamline the process of implementing Major Development Projects and Major Contracts of GOCCs.

Under GCG M.C. No. 2018-02, Major Development Projects and Major Contracts of GOCCs shall continue to strictly fall under the review and decision-making process of the National Economic Development Authority (NEDA), the NEDA Investment Coordination Committee (ICC), the NEDA Board, and/or the Economic Development Cluster (EDC), pursuant to all applicable existing laws, rules and regulations. GOCCs shall submit to the Governance Commission a report on said projects and contracts entered into for purposes of monitoring GOCC performance and asset utilization.

It should be noted that in all cases, GCG M.C. No. 2018-02 emphasizes that all agreements shall not be grossly disadvantageous to the government, and that GOCCs shall comply with existing laws, rules and regulations, regardless of covered land area and/or period.  To ensure this, the new M.C. now even requires the favorable legal opinion or contract review of the OGCC on GOCC contracts before entering into the said agreement.

GCG M.C. No. 2018-02 does not prescribe nor dispense a specific mode of procurement of Major Development Projects and Major Contracts. It stipulates that proposed Major Development Projects and Major Contracts of GOCCs lie within the sound business judgement of the respective Governing Boards of GOCCs who are constituted under Republic Act No. 10149 as “fiduciaries of the State,” with the “legal obligation and duty to always act in the best interest of the GOCC, with utmost good faith” and who “must exercise extraordinary diligence in the conduct of the business and in dealing with the properties of the GOCC using the utmost diligence of a very cautious person with due regard for all the circumstances.”[1]


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Veronica Paula D. Castro

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[1]Sec. 19, R.A. No.10149.