Finally, a GOCC that earns money for gov’t

AFTER THE solemnity and sadness of Holy Week, replaced by the joy of Easter (for which I wish everybody a Happy Easter), we deserve to hear more happy news. The happy news I bring is this: After hearing of so much taxpayers’ money lost by GOCCs (government-owned or -controlled corporations) through excessive allowances and bonuses of their officials, there is at least one little known GOCC that not only has not lost a single centavo but has declared a P3.003-billion stock dividend to the national government in just three months of operation. This is the PNOC-EC (Philippine National Oil Co.-Exploration Corp.).

This first quarter (2011) stock dividend of PNOC-EC is 200 percent higher than the dividends it declared for the whole year of 2010 which amounted to only P1.001 (one billion and one million pesos). In September 2010, PNOC declared a stock dividend of P440 million, and in December 2010, P561 million.

The P3.003-billion stock dividend for the first quarter of 2011 is different from the cash dividend of more than P3 billion declared for the whole year of 2010.

How did PNOC-EC accomplish this when most other GOCCs are losing money? By simply changing the free-spending top officials appointed by President Gloria Macapagal-Arroyo with new ones who adopted cost-cutting measures. The GMA-appointed officials, mostly political hacks and protégés of politicians, regarded GOCCs as gold mines from which they were free to get as much as they could as fast as they could. Do you know that each board member of PNOC-EC spent at least P150,000 on golf club fees alone?

President Benigno Aquino III’s appointee as chairman and chief executive officer of PNOC-EC, former Manila Mayor Mel Lopez, simply ordered an end to the excessive perks of top executives and managers, including expenses for golf and tennis clubs and travel. He also banned the playing of golf and tennis during office hours.

When P-Noy appointed Lopez to head PNOC-EC, many critics smirked that Lopez, who they thought had no experience in running a big business, would run PNOC-EC like a sari-sari store. They got a surprise. They did not know that Lopez ran a successful company, the Pacific Concrete Products Corp., that manufactured and sold concrete products and constructed roads and highways. It constructed the six-lane Mindanao Avenue from Quezon City to the North Luzon Expressway (NLEX) in Bulacan.

Three months after assuming office, the “sari-sari store operator” disclosed to the Philippine Stock Exchange a record high net income of P680 million. That income was driven mainly by the company’s share in the Malampaya gas project with the disciplined trading of coal and the intensified operations of the company’s Batangas port. This income was 259 percent higher than the first quarter financial performance in 2010.

PNOC-EC is engaged mainly in the exploration, development and production of petroleum, coal and natural gas deposits, the operation of several coal mines as well as the Malampaya natural gas project in Palawan, the trading and marketing, here and abroad, of coal and natural gas, and the operation of the Energy Supply Base, a private commercial port owned by PNOC-EC in Batangas that provides berthing, cargo handling, storage and warehousing facilities to its clients. The ESB earned higher revenues in 2010 mainly due to an increase in service and warehousing rates, as well as a higher volume of fuel sold compared to what was targeted for the year.

Lopez handed to President Aquino a check for P3.003 billion representing the cash dividend of PNOC-EC during the ceremonies last April 20 for the 35th founding anniversary of the corporation.

The biggest portions of the cash and stock dividends will go to the Philippine government which owns 99.7 percent of the stocks of PNOC-EC. The rest, amounting to 0.29 percent, is held by the public. The P3 billion cash dividend will be deposited in the Philippine national treasury and will bolster government finances to fund infrastructure and other projects.

Lopez said that PNOC-EC has already made preparations for the sale to the public of additional shares of stock to comply with the requirement of the SEC for all publicly listed companies to allocate at least 10 percent of their shares to public ownership.

Lopez also disclosed that PNOC-EC is currently in talks with the presidents and deans of engineering colleges and universities to recruit new graduates of engineering, especially cum laude and other honor graduates, to man the corporation’s new engineering division.

“We will get the best and the brightest young engineers to boost our company’s capability to fully explore and exploit our native energy resources in the face of rising global energy prices. We want to industrialize and modernize our economy to create more jobs and income for our people,” Lopez said.

The engineering division will enable PNOC-EC to accomplish its own infrastructure, exploration and production projects without having to outsource the work to private companies.

And as proof of the banking community’s high regard for PNOC-EC’s financial standing, a number of the world’s leading banks have offered to give the corporation credit facilities in the tens of billions of pesos although the corporation has not asked for any loan as it does not need any. The list of banks offering loans reads like a who’s who in the industry: BNP Paribas, Philippine National Bank, Land Bank of the Philippines, Standard Chartered Bank, Hong Kong and Shanghai Banking Corp., Development Bank of the Philippines, United Coconut Planters Bank, Bank of the Philippine Islands, ANZ Banking Group Limited, and Munzuho Corporate Bank, Ltd.