INTRO-TO-PUBLIC-ENTERPRISE-Lecture-1.pptx

Introduction to public Enterprises leacture

1. INTRODUCTION TO PUBLIC ENTERPRISE VICTORIA P. VALENZUELA, DPA, FRIPA Professor

2. WHAT IS PUBLIC ENTERPRISE? ? A.H. Hanson describes “PE mean state ownership and operation of industrial, agricultural, financial and commercial undertakings”.

3. WHAT IS PUBLIC ENTERPRISE? ? Mallaya explains “PEs are autonomous or semi- autonomous Corporations and companies owned and controlled by state and engaged in commercial activities”.

4. WHAT IS PUBLIC ENTERPRISE ? PE’s are known for the economic activity. Govt has to provide following for PEs  Capital (Alone or Jointly)  Structure  Control of Management  Takes or Bears Profits or Losses according to the ratio of capital supplier

5. Example of Economic Activity

6. WHAT IS PUBLIC ENTERPRISE ? The International Monetary Fund, defined public enterprises as a government-owned and/ or controlled industrial units of financial institutions which either sell goods and services to the public on a large scale, accept demand, time or savings deposit or both incur liabilities and acquire financial assets in the market. (“ A Manual on Government Finance Statistics”, 1974, page 340)

7. WHAT IS PUBLIC ENTERPRISE ? The United Nations Department of Economics and Special Affairs, defined public enterprises as publicly owned and/or controlled enterprises. These are incorporated public corporations or large unincorporated units (government enterprises) that sell most of the goods they produce to the public. (“A System of National Account”, 1968,page78)

8. WHAT IS PUBLIC ENTERPRISE ? The Commission on Reorganization, defined public enterprises as corporate bodies, stock or non-stock, owned or controlled by the government created by special law under the corporation law for the purpose of performing governmental or proprietary functions which are socio-economic in nature. (“Integrated Reorganization Plan”, dated March 1972, page 35)

9. Why does government engage in public enterprise? Prof. Avelino P. Tendero in his book on Theory and Practices of Public Administration in the Philippines, 1993 edition, T he answer to this question would require a description of the boundaries of what is private and what is public. The private sector is comprised of all household and privately-owned and operated entities; the public sector refers to government and public enterprises which provides goods and services, regulates, control, taxes and subsidize the private sector.

10. Why does government engage in public enterprise? The international term used to describe the government corporation phenomenon is “public enterprise” while in the Philippines, the phrase used is “Government-Owned or Controlled Corporation” or GOCC.

11. Characteristics of Public Enterprises The primary characteristics of public enterprises are: 1. They function under the direct control of the government and some are even established under statutes and Companies Act. Therefore, public enterprises are autonomous or Semi-Autonomous in nature. 2. Either the State or the Central government can control a public sector enterprise. 3. Primarily, the objective of establishing a public enterprise is to serve the public. They can supply essential goods/services at reasonable prices and also create employment opportunities.

12. Characteristics of Public Enterprises The primary characteristics of public enterprises are: 4. A public enterprise endeavors to serve all section of people in the community. 5. In some sectors, private organizations do not have permission to operate. Therefore, the public sector enterprises enjoy a monopoly in operation. For example, the State enterprises have a monopoly in Energy production, Railways, and Post and Telegraph services. 6. Sometimes, the country receives financial/technological assistance from the international community for the development of industries. These grants are applied through public enterprises.

13. Characteristics of Public Enterprises The primary characteristics of public enterprises are: 7. Public sector enterprises are liable to the general public for their actions. 8. These enterprises help in the implementation of the economic plans and policies of the government. 9. The government makes the primary investment in a public sector enterprise. However, they arrange finance for the day-to-day operation making it financially independent.  

14. LOCAL PUBLIC ENTERPISES (LPEs) Transport Terminal Public Market Slaughter houses Fish landing and cold storage Post harvest facilities Water supply Sanitation Public Parks Public cemeteries

15. END! THANKS FOR LISTENING!!