Privatization and

Deregulation
A quick approach to privatization and
deregulation

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Definitions
Privatization
The conveyance of ownership from government
to private
The transition from an active public company to a
non-active private company
The repurchasing of all of a
company's outstanding stock by employees or
a private investor.

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Affected:

Power companies
Banks power companies, banks, water
companies, telecommunications
Water companies
Telecommunications

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Schemes of
Privatization:
Build Own-Operate-Transfer or BuildOperate- Transfer (BOOT or BOO)
Rehabilitate-operate-transfer (ROT)
Build-transfer-operate (BTO)
Joint Venture

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In the Philippines
Waves of Transferees

First Wave:
(1986-1987)
Non performing assets of government
Government banks
President Ferdinand Marcos
Everything is a loss
Economic crisis
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In the Philippines
Waves of Transferees

Second Wave
Started in 1990
Power sector was involved
Used BOT law

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In the Philippines
Waves of Transferees

Third Wave
The current wave
Housing ,health, postal services and pension
plans.
GCG (Governance Commission for GOCCs)
GOCC (government-owned and controlled
corporation)
PPP Program
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What is GCG?
Authored by Sen. Franklin Drilon
Signed June 6, 2011
Assessing and Overseeing GOCCs and
Government Financial Institutions
Watch money
Shortlist of GOCCs and GFIs
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MRT, LRT Privatization

A P15 Million bid

LRTA- LRT line

LandBank and DBP MRT
Studied by the GCG

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In the Philippines
Landmarks of Privatization

Asset Privatization Trust (APT)

Executive Order No. 215
Pres. Cory Aquino in 1987

Republic Act No. 6957

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In the Philippines
Working Progress

Power Sector
Transport Sector
Water and Waste Sector
Information Technology

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Why promote
Privatization?

Being Efficient and Effective

Profit Maximization
Less budget concern
Global trend

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Definitions
Deregulation
Reduction or Elimination of control by the
government
No government interference
Enacted to create competition
Usually targets Utility industry
Different from Liberalization

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In the Philippines
Oil Deregulation

Republic Act No. 8180

Downstream Oil Industry Deregulation Act
of 1996
Pres. Fidel V. Ramos
1997

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In the Philippines
Oil Deregulation

Republic Act. No. 8479

Downstream Oil Industry Deregulation Act
of 1998
Complete no government interference
DTI as monitor

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In the Philippines
Electricity Deregulation

December 26, 2011

Open Access
Big Consumers
Energy Regulatory Commission

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In the Philippines
Issues

Oil Deregulation
Economic crisis
Opposition of mass

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Why promote
Deregulation?
Enhances competition

Comparison

Privatization

Deregulation

Ownership

11

Interference

Public to Private

22

Private

Promotes Efficiency and Effectivity

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33

Promotes Competition