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Privatization and deregulation
This document discusses the objectives, definitions, schemes, waves, landmarks, and progress of privatization and deregulation in the Philippines. Privatization involves transferring ownership from government to private entities, while deregulation reduces or eliminates government control and interference to promote competition. Major sectors affected include power, banks, water, telecommunications, and oil. The Philippines has pursued privatization and deregulation in three waves since the 1980s, most notably in the power, transport, water, and oil industries.
Privatization and deregulation
- 1. A quick approachto privatization and deregulation… Privatization and Deregulation Fin 111 –AY02
- 2. Objectives: To be ableto differentiate Privatization and Deregulation To know the importance of Privatization and Deregulation To know the latest work in Privatization and Deregulation To know the definition of Privatization and Deregulation This is an example text. Go ahead and replace it To know the significance of Privatization an Deregulation To know the effects of Privatization and Deregulation 1 2 3 4 5 6 7 To know the scopes of Privatization and Deregulation
- 3. Fin 111 –AY02 •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. Definitions
- 4. • Power companies •Banks • Water companies • Telecommunications Affected: power companies, banks, water companies, telecommunications Fin 111 – AY02
- 5. • Build –Own-Operate-Transferor Build- Operate- Transfer (BOOT or BOO) • Rehabilitate-operate-transfer (ROT) • Build-transfer-operate (BTO) • Joint Venture Schemes of Privatization: Fin 111 – AY02
- 6. • First Wave: –(1986-1987) – Non performing assets of government – Government banks – President Ferdinand Marcos – Everything is a loss – Economic crisis In the Philippines… Waves of Transferees Fin 111 – AY02
- 7. • Second Wave –Started in 1990 – Power sector was involved – Used BOT law In the Philippines… Waves of Transferees Fin 111 – AY02
- 8. • 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 In the Philippines… Waves of Transferees Fin 111 – AY02
- 9. • Authored bySen. Franklin Drilon • Signed June 6, 2011 • Assessing and Overseeing GOCCs and Government Financial Institutions • Watch money • Shortlist of GOCCs and GFIs What is GCG? Fin 111 – AY02
- 10. • LRTA- LRTline • LandBank and DBP – MRT • Studied by the GCG MRT, LRT Privatization A P15 Million bid… Fin 111 – AY02
- 11. • Asset PrivatizationTrust (APT) • Executive Order No. 215 – Pres. Cory Aquino in 1987 • Republic Act No. 6957 In the Philippines… Landmarks of Privatization Fin 111 – AY02
- 12. • Power Sector •Transport Sector • Water and Waste Sector • Information Technology In the Philippines… Working Progress Fin 111 – AY02
- 13. • Being Efficientand Effective • Profit Maximization • Less budget concern • Global trend Why promote Privatization? Fin 111 – AY02
- 14. Fin 111 –AY02 •Deregulation • Reduction or Elimination of control by the government • No government interference • Enacted to create competition • Usually targets Utility industry • Different from Liberalization Definitions
- 15. • Utility Industries –Power companies – Water companies – Light companies – Oil companies Affected: Fin 111 – AY02
- 16. • Republic ActNo. 8180 • Downstream Oil Industry Deregulation Act of 1996 • Pres. Fidel V. Ramos • 1997 In the Philippines… Oil Deregulation Fin 111 – AY02
- 17. • Republic Act.No. 8479 • Downstream Oil Industry Deregulation Act of 1998 • Complete no government interference • DTI as monitor In the Philippines… Oil Deregulation Fin 111 – AY02
- 18. • December 26,2011 • Open Access • Big Consumers • Energy Regulatory Commission In the Philippines Electricity Deregulation Fin 111 – AY02
- 19. • Oil Deregulation •Economic crisis • Opposition of mass In the Philippines… Issues Fin 111 – AY02
- 20. • Enhances competition Whypromote Deregulation?
- 21. Comparison… Interference Deregulation Ownership Privatization 11 2 3 2 3 Fin 111 –AY02 Public to Private Promotes Efficiency and Effectivity Promotes Competition Private
- 22. • http://www.investopedia.com/terms/p/privatization.asp#axzz1XKGNO3kT • http://en.wikipedia.org/wiki/Deregulation •http://www.gmanews.tv/story/220681/business/recto-let-gocc-super-body-look-first-at- p15-b-mrt-lrt-privatization • http://www.investorwords.com/3863/privatization.html • http://www.adb.org/Documents/Conference/Carec/Energy/chap15.pdf • http://www.collegegrad.com/industries/trans03.shtml • http://ezinearticles.com/?Philippine-Oil-Deregulation---A-Policy-Research- Analysis&id=1915890 • http://www.ide.go.jp/English/Publish/Download/Asedp/011.html • http://www.ehow.com/list_7328401_oil-deregulation-laws-philippines.html • http://www.scribd.com/doc/39468428/Deregulated-Power-Systems-in-the-Philippines Sources: Fin 111 – AY02
- 23. THANK YOU! Fin 111– AY02
Editor's Notes
- #4 As a result of such an initiative, the company stops being publicly traded. Sometimes, the company might haveto take on significant debt to finance the change in ownership structure. Companies might want to go private in order to restructure their businesses (when they feel that the process might affect their stock prices poorly in the short run). They might also want to go private to avoid the expense andregulations associated with remaining listed on a stock exchange.Â
- #6 BOOT or BOO systems: where there would not be a transfer of ownership;• rehabilitate-operate-transfer (ROT): if there is an existing facility or infrastructure;• build-transfer-operate (BTO): if there is a restriction on ownership of the facility – for instance if it is still owned by the state but the private sector operates and maintains the facility; and• joint venture: If the government wants to participate as an equity holder or investor in a financially viable project that would give a good return.
- #7Â ECONOMIC CRISIS- double-digit inflation, a deficit in the balance of payments, gross international reserves below $1 billion
- #9 PPP- Private –Public Privatization Program of the Aquino AdministrationGCG regulates the GOCCs
- #11Â LRTA- Light rail Transit
- #12 • Assets Privatization Trust (APT): Basically pertaining to the first wave, APT concerns the disposition of nonperforming assets.• Executive Order No. 215: This was the first legal framework for power and was passed by President Corazon Aquino in 1987, resulting in the implementation of about 20 power projects.• Republic Act No. 6957: Congress passed this Act in July 1990. However, only two projects were implemented under this law: the Light Rail Transit (LRT) Line 3, an overhead railroad along a key route, EDSA; and a public market in Mandaluyong City, in the north of Manila.
- #13 Power sectorCompleted operational projects and those in the pipeline in the power sector amount to about $11 billion.Transport sectorAbout 52 projects in transport total about $6.9 billion. The Government is negotiating two rail projects and two toll roads. Unlike the case of EDSA LRT Line 3, the Government will take the market risk on subsequent transport projects.Water and waste sectorsThis is a remarkable sector of infrastructure development. Two concessions for the Metropolitan Water Sewerage contract were awarded in 1997 to two consortia headed by two local companies. The Government is at the negotiation stage for a $400 million bulk water supply in Cebu, central Philippines.Information technologyThe Government is trying to computerize the country’s passport system, civil registry, car registrations, and land titling, as well as other smaller projects. These are but some of the achievements of a legal framework written into the Constitution, which specifies the private sector as the engine of growth for national development.
- #15Â No government interference even in pricing, exportation and importation MORE LIKE THE FREE MARKET- ruled by laws of Supply and demand Liberalization has little regulations and protects consumers