MALACAÑAN PALACE
MANILABY THE PRESIDENT OF THE PHILIPPINES
EXECUTIVE ORDER No. 596
DEFINING AND INCLUDING “GOVERNMENT INSTRUMENTALITY VESTED WITH CORPORATE POWERS” OR “GOVERNMENT CORPORATE ENTITIES” UNDER THE JURISDICTION OF THE OFFICE OF THE GOVERNMENT CORPORATE COUNSEL (OGCC) AS PRINCIPAL LAW OFFICE OF GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCs) AND FOR OTHER PURPOSES
WHEREAS, the Office of the Government Corporate Counsel (OGCC), as the principal law office of all Government-Owned or Controlled Corporations (GOCCs), including their subsidiaries, other corporate offsprings and government acquired assets corporations, plays a very significant role in safeguarding the legal interests and providing the legal requirements of all GOCCs;
WHEREAS, there is an imperative need to integrate, strengthen and rationalize the powers and jurisdiction of the OGCC in the light of the Decision of the Supreme Court dated July 20, 2006, in the case of “Manila International Airport Authority vs. Court of Appeals, City of Parañaque, et al.” (G.R. No. 155650), where the High Court differentiated “government corporate entities” and “government instrumentalities with corporate powers” from GOCCs for purposes of the...
Details
Amends
n/a
Amended by
n/a
Executive Orders
Defining And Including "Government Instrumentality Vested With Corporate Powers" Or "Government Corporate Entities" Under The Jurisdiction Of The Office Of The Government Corporate Counsel (OGCC) As Principal Law Office Of Government-Owned Or Controlled Corporations (GOCCS) And For Other Purposes
Executive Order No. 596
Summary of Executive Order No. 596
Defining and Including "Government Instrumentality Vested with Corporate Powers" or "Government Corporate Entities" under the Jurisdiction of the OGCC
• The Office of the Government Corporate Counsel (OGCC) is the principal law office of all Government-Owned or Controlled Corporations (GOCCs), their subsidiaries, corporate offsprings, and government acquired asset corporations. (Section 1)
• The OGCC is also the principal law office of "government instrumentality vested with corporate powers" or "government corporate entity" as defined by the Supreme Court in the MIAA vs. Court of Appeals case. (Section 1)
• Examples of "government instrumentality vested with corporate powers" or "government corporate entity" include: Manila International Airport Authority (MIAA), Mactan International Airport Authority, Philippine Ports Authority (PPA), Philippine Deposit Insurance Corporation (PDIC), Metropolitan Water and Sewerage Services (MWSS), Philippine Rice Research Institute (PRRI), Laguna Lake Development Authority (LLDA), Fisheries Development Authority (FDA), Bases Conversion Development Authority (BCDA), Cebu Port Authority (CPA), Cagayan de Oro Port Authority, and San Fernando Port Authority. (Section 1)
Definition of GOCCs
• GOCCs are defined as a stock or non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law, is owned or controlled by the government directly, or indirectly, through a parent corporation or subsidiary corporation, to the extent of at least a majority of its outstanding capital stock or of its outstanding voting capital stock. (Section 2)
• A government "instrumentality" refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law; endowed with some, if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. (Section 2)
Conditions and Circumstances for Considering Corporations as GOCCs
• A corporation organized under the general corporation law under private ownership, at least a majority of the shares of stock of which were conveyed to a government financial institution, whether by foreclosure or otherwise, or a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease, or operate specific assets acquired by a government financial institution in satisfaction of debts incurred therewith, and which in any case by enunciated policy of the government is required to be disposed of to private ownership within a specified period of time, shall not be considered a GOCC before such disposition and even if the ownership or control thereof is subsequently transferred to another GOCC. (Section 3a)
• A corporation created by special law which is explicitly intended under that law for ultimate transfer to private ownership under certain specified conditions shall be considered a GOCC, until it is transferred to private ownership. (Section 3b)
• A corporation that is authorized to be established by special law, but which is still required under that law to register with the Securities and Exchange Commission in order to acquire a juridical personality, shall not, on the basis of the special law alone, be considered a GOCC. (Section 3c)
Definitions of Parent Corporation, Subsidiary, and Affiliate
• A parent corporation is one which is created by special law. (Section 4a)
• A subsidiary corporation is one organized under the general corporation law (1) under private ownership at least a majority of the shares of stock of which were conveyed to a government corporation in satisfaction of debts incurred with a government financial institution, whether by foreclosure or otherwise, or (2) as a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease, or operate specific physical assets acquired by the government financial institution in satisfaction of debts incurred therewith, and which in any case by enunciated policy of the government is required to be disposed of to private ownership within a specified period of time. (Section 4b)
• An affiliate corporation is one where total government ownership comprises less than the majority of its outstanding capital stock and its outstanding voting capital stock. (Section 4c)
Repealing Clause and Effectivity
• All executive issuances, rules and regulations or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly. (Section 5)
• This Executive Order shall take effect after fifteen (15) days from date of publication in a national newspaper of general circulation. (Section 6)
Defining and Including "Government Instrumentality Vested with Corporate Powers" or "Government Corporate Entities" under the Jurisdiction of the OGCC
• The Office of the Government Corporate Counsel (OGCC) is the principal law office of all Government-Owned or Controlled Corporations (GOCCs), their subsidiaries, corporate offsprings, and government acquired asset corporations. (Section 1)
• The OGCC is also the principal law office of "government instrumentality vested with corporate powers" or "government corporate entity" as defined by the Supreme Court in the MIAA vs. Court of Appeals case. (Section 1)
• Examples of "government instrumentality vested with corporate powers" or "government corporate entity" include: Manila International Airport Authority (MIAA), Mactan International Airport Authority, Philippine Ports Authority (PPA), Philippine Deposit Insurance Corporation (PDIC), Metropolitan Water and Sewerage Services (MWSS), Philippine Rice Research Institute (PRRI), Laguna Lake Development Authority (LLDA), Fisheries Development Authority (FDA), Bases Conversion Development Authority (BCDA), Cebu Port Authority (CPA), Cagayan de Oro Port Authority, and San Fernando Port Authority. (Section 1)
Definition of GOCCs
• GOCCs are defined as a stock or non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law, is owned or controlled by the government directly, or indirectly, through a parent corporation or subsidiary corporation, to the extent of at least a majority of its outstanding capital stock or of its outstanding voting capital stock. (Section 2)
• A government "instrumentality" refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law; endowed with some, if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. (Section 2)
Conditions and Circumstances for Considering Corporations as GOCCs
• A corporation organized under the general corporation law under private ownership, at least a majority of the shares of stock of which were conveyed to a government financial institution, whether by foreclosure or otherwise, or a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease, or operate specific assets acquired by a government financial institution in satisfaction of debts incurred therewith, and which in any case by enunciated policy of the government is required to be disposed of to private ownership within a specified period of time, shall not be considered a GOCC before such disposition and even if the ownership or control thereof is subsequently transferred to another GOCC. (Section 3a)
• A corporation created by special law which is explicitly intended under that law for ultimate transfer to private ownership under certain specified conditions shall be considered a GOCC, until it is transferred to private ownership. (Section 3b)
• A corporation that is authorized to be established by special law, but which is still required under that law to register with the Securities and Exchange Commission in order to acquire a juridical personality, shall not, on the basis of the special law alone, be considered a GOCC. (Section 3c)
Definitions of Parent Corporation, Subsidiary, and Affiliate
• A parent corporation is one which is created by special law. (Section 4a)
• A subsidiary corporation is one organized under the general corporation law (1) under private ownership at least a majority of the shares of stock of which were conveyed to a government corporation in satisfaction of debts incurred with a government financial institution, whether by foreclosure or otherwise, or (2) as a subsidiary corporation of a government corporation organized exclusively to own and manage, or lease, or operate specific physical assets acquired by the government financial institution in satisfaction of debts incurred therewith, and which in any case by enunciated policy of the government is required to be disposed of to private ownership within a specified period of time. (Section 4b)
• An affiliate corporation is one where total government ownership comprises less than the majority of its outstanding capital stock and its outstanding voting capital stock. (Section 4c)
Repealing Clause and Effectivity
• All executive issuances, rules and regulations or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly. (Section 5)
• This Executive Order shall take effect after fifteen (15) days from date of publication in a national newspaper of general circulation. (Section 6)