(in ₱ Millions)


The reforms introduced by the Governance Commission in the early years of its operations were meant to ensure financial viability of the public corporate sector. With an asset base of P4.851 Trillion in 2011, the public corporate sector settled at P7.260 Trillion in 2016. Ten years since, government corporate assets now stand at P10.820 Trillion by end of 2021 posting an annual average growth rate of 8% within the ten-year period. Despite the pandemic, revenues grew by 14% in 2021 (35% of 2021 GDP at current prices) reversing the negative growth rate registered in 2020.

However, such growth was negated by the increase in total liabilities which grew to P16.627 Trillion in 2021. The growth of the assets of the GOCC Sector was overshadowed by the significant increase in liabilities and negative net worth by end of the ten-year period. Total liabilities spiked starting 2018 due to the Government Service Insurance System’s (GSIS) and Social Security System’s (SSS) implementation of accounting standard, the Philippine Financial Reporting Standards (PFRS) 4.

Accounting Standards

A set of accounting standards that are widely and generally accepted is issued by the International Accounting Standards Board (IASB). These standards are referred to as International Financial Reporting Standards (IFRS). In the Philippines, accounting standards are mirrored after IFRS with some minor modifications to fit the Philippine setting and requirements. These standards applicable in the country are referred to as the Philippine Financial Reporting Standards (PFRS).

To ensure alignment with the prevailing international standards and provide quality accounting standards and uniformity of financial reporting in the public sector, the Commission on Audit (COA) issued Resolution No. 2014-003 prescribing the adoption of the Philippine Public Sector Accounting Standards by the National Government Agencies, Local Government Units, and Government-Owned and Controlled Corporations [1]. The COA issued various circulars in relation to such, one of which is the adoption of the PFRS.

[1] Conversion from the Philippine Government Chart of Accounts Under the New Government Accounting System per Commission on Audit Circular No. 2004-008 dated September 20, 2004, as amended, to the Revised Chart of Accounts for National Government Agencies Under Commission on Audit Circular No. 2013-002 dated January 30, 2013, Additional Accounts Revised Description Title of Accounts and Relevant
Philippine Financial Reporting Standards (PFRS) 4

For the insurance business, the current accounting standard adopted in the country is the PFRS 4, which was adopted from International Financial Reporting Standard (IFRS) 4 (Insurance Contracts) issued by the International Accounting Standards Board in March 2004.

The IFRS 4 was issued to improve disclosures for insurance contracts and the recognition and measurement practices. The standard was intended to apply to all insurance contracts (including reinsurance contracts) that an entity issues and to reinsurance contracts that it holds. It does not apply to other assets and liabilities of an insurer, such as financial assets and financial liabilities [1].

In the Philippines, the PFRS 4 provides for the adoption of the IFRS. As provided, when an insurance entity receives money from its clients and enters into a contract with them to provide benefits when certain events occur, it must set aside a reserve to cover its liabilities. Accordingly, premiums, fees, and contributions that the institutions receive must be reported both as income and liability in their financial statements.

The transition to PFRS 4 on the reporting of financial condition started in 2020 in compliance with the directive of the Department of Finance for government insurance institutions (GIIs) under its supervision. With the adoption of the PFRS 4, Insurance Contracts, GSIS and SSS are required to recognize and set aside reserves for contractual benefits that are expected to be incurred in the future for policies in force as of the reporting date. Previously, the required reserves to guarantee the fulfillment of the obligations of these GOCCs were recorded as retained earnings. The adoption of the PFRS 4 resulted in negative balance of retained earnings since all actuarial reserves shall be recorded as liabilities. The GOCCs concerned also applied it retrospectively.

The retrospective application came from paragraph 19 of PAS 8 [2]. It requires entities to apply the change in accounting policy RETROSPECTIVELY if the said change results from the initial application of a PFRS in accordance with the specific transitional provisions, if any, in that PFRS. It is also required when an entity changes an accounting policy upon initial application of a PFRS that does not include specific transitional provisions applying to that change or changes an accounting policy voluntarily. Further, paragraph 22 of PAS 8 states that "...when a change in accounting policy is applied retrospectively in accordance with paragraph 19(a) or (b), the entity shall adjust the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the new accounting policy had always been applied". In addition, paragraph 10(f) of PAS 1 [3] requires the "...(f) statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes retrospective restatement of items in its financial statements..." as part of a complete set of financial statements. In line with the adoption of the PFRS 4 and consistent with the requirements under PAS 1 and PAS 8, the reserve fund as at 31 December 2019, of GSIS and SSS were restated.

[2] Accounting Policies, Changes in Accounting Estimates and Errors
[3] Presentation of Financial Statements


The GFIs Sector drove the growth of the GOCC Sector, particularly the GSIS and SSS. Each represent an average of 14% and 6% of the total assets of the GOCC Sector, respectively.

GOCC Sector Assets in ₱ millions


Notably, the combined net worth of GSIS and SSS prior to the adoption of the PFRS 4 of P1.6 Trillion account for 45% of the total GOCC Sector. Such significant share and the adoption of the PFRS 4 resulted in the deficit registered by the entire sector starting 2018.

GOCC Sector Net Worth in ₱ millions


As presented here, net of the share of GSIS and SSS, the GOCC Sector would still register growth amidst the pandemic.

Notwithstanding the negative effects of the adoption of PFRS 4, GSIS and SSS remain to continue as a going concern, and do not affect the abilities of the respective corporations to generate and increase their revenues. Guided with principles of prudent fund management and good corporate governance practices, GSIS and SSS are expected to withstand the initial blow resulting from the change in accounting treatment.

GOCC Sector Revenues in ₱ millions
GOCC Sector Adjusted Net Income in ₱ millions



In the midst of economic slowdown, the GOCC Sector continues to contribute to the government’s response to the pandemic as it remits significant amount of its income to the national coffers.

Under R.A. No. 7656, otherwise known as the “Dividends Law,” GOCCs are required to declare and remit at least fifty percent (50%) of their annual net earnings as cash, stock or property dividends to the National Government. In response to the call of the National Government and in line with the inherent mandate of GOCCs to be socially responsible and to act and operate as good corporate citizens, the Bureau of Treasury (BTr) collected a total P39.42 Billion dividends from 41 GOCCs covered by R.A. No. 10149. This amount is significantly lower by 57% than the P91.70 Billion total remittance in 2020. The following table shows the GOCCs which remitted at least P1 Billion in 2021:

GOCCs Remitting at Least ₱1B in Dividends in 2021

While it may be the case that the 2021 dividend remittance pales in comparison with the 2020 accomplishment, it must be noted that aside from the extraordinary financial contributions in 2020, the 2021 remittance pertains to GOCC operations in 2020. However as it is, it is also worth noting that the 2021 remittance is 8% higher compared with the 2017-2019 (pre-pandemic) average.

Moreover, even with the effects of the COVID-19 pandemic, the total remittance as well as the number of remitting GOCCs in 2021 is even higher than the highest remittance in the 10-year period before the enactment of R.A. No. 10149.

With the GOCC Governance Act of 2011 celebrating its 10th anniversary, the GCG recognizes the significant improvement in the GOCC Sector’s response to the needs of the public, particularly with its contribution to the national coffers. Comparing the sector’s performance for the period 2002-2011 and 2012-2021, we see a 431% increase in the 10-year total remittance from P68.71 Billion to P364.52 Billion. Excluding the 2020 extraordinary remittance of P91.70 Billion, the total for the period 2012-2021 is still 297% higher than the previous 10-year period performance. Moreover, the latest 10-year period also saw a doubling of the average number of remitting GOCCs from 21 in 2002-2011 to 45 in 2012-2021.

Data Sources:
Annual Audited Reports 2016-2021, Commission on Audit.
GOCC Submission 2021 Unaudited Financial Statements
Bureau of Treasury, Monthly Consolidated Report on NG Exposures to/Receivables from GOCCs as of 31 December 2020 and NG Collections from GOCCs for the period 1 January to 31 December 2021.