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COMMISSION ON AUDIT
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CIRCULAR

TO

All Heads of Government Owned and/or Controlled Corporations;


Heads of Finance/Comptrollership/Financial Management Services;
Chief Accountants/Heads of Accounting Units; COA Assistant
Commissioners, Directors, Supervising Auditors/Audit Team
Leaders; and All Others Concerned.

SUBJECT:

Classification of all Government Corporations and other


entities/instrumentalities with corporate powers as Government
Business Enterprises (GBEs) or Non-GBEs for the purpose of
determining the applicable Financial Reporting Framework in the
preparation of their Financial Statements and Prescribing
Guidelines therefor

1.0

Rationale
1.1

To align with International Financial Reporting Standards (IFRS), the


Philippine Financial Reporting Standards Council (PFRSC) of the
Board of Accountancy of the Philippines, issued starting in CY 2005 a
series of pronouncements called the Philippine Financial Reporting
Standards (PFRS).

1.2

Since then, the Bangko Sentral ng Pilipinas (SSP) prescribed the


adoption by all banks and non-bank financial institutions of the PFRS
as their financial reporting framework. The Securities and Exchange
Commission (SEC) also adopted the PFRS as part of SEC rules to be
followed by all SEC reg istered entities.

1.3

international standards and


Likewise, to align with
provide quality accounting standards to enhance the quality and
uniformity of financial reporting by Philippine public sector entities, thus
ensuring accountability, transparency and comparability of financial
information with other public sector entities around the world , COA
issued Resolution No. 201 4-003 dated January 24, 2014 prescribing
the adoption of the Philippine Public Sector Accounting Sta ndards
(PPSAS) by the National Government Agencies (NGAs), Local
Government Units (LGUs) and.Government Corporations and entities/
instrumentalities which are Non-GBEs.

1.4

In the light of the f9regoing developments, there is now a need to


classify the different Government Corporations\ and other entities/
instrumentalities. with corporate powers a " fer GBEs or Non-GBEs

the.~iling

for the purpose of determining the financial reporting framework


applicable thereto.

2.0

Definition of Terms
2.1

Government corporations refer to government-owned or controlled


corporations (GOCCs), government financial institutions (GFis), and
government instrumentalities with corporate powers (GICPs)/
government corporate entities (GCEs), including their subsidiaries, and
water districts. The regional, branch and field offices are component
units of the corporation.

2.2

GOCCs refer to any agency organized as a stock or non-stock


corporation, vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government
of the Republic of the Philippines directly or through its
instrumentalities either wholly or, where applicable as in the case of
stock corporations, to the extent of at least a majority of its outstanding
capital stock. The term "GOCC" shall include GICP/GCE and GFI as
defined herein.

2.3

GFis refer to financial institutions or corporations in which the


government directly or indirectly owns majority of the capital stock and
which are either: (a) registered with or directly supervised by the BSP;
or (b) collecting or transacting funds or contributions from the public,
and places them in financial instruments or assets such as deposits,
loans, bonds and equity including, but not limited to, the Government
Service Insurance System and the Social Security System.

2.4

GICPs/GCEs refer to instrumentalities or agencies of the government,


which are neither corporations nor agencies integrated within the
departmental framework, but vested by law with special functions or
jurisdiction, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy usually
through a charter.

2.5

have all the following


GBEs are government
characteristics as defined under the pertinent provisions of the
International Public Sector Accounting Standards (IPSAS) as adopted
under the PPSAS:

corporati~hich

a.)

Is an entity with the power to contract in its own name;

b.)

Has been assigned the financial and operational authority to


carry on a business;

c.)

Sells goods and services, in the normal course of its business,


to other entities at a profit or full cost recovery;

2.6

d.)

Is not reliant on continuing government funding to be a going


concern (other than purchases of outputs at arm's length); and

e.)

Is controlled by a public sector entity.

GBEs include both trading enterprises, such as utilities, and financial


enterprises, such as financial institutions. GBEs are, in substance, no
different from entities conducting similar activities in the private sector.
GBEs generally operate to make a profit, although some may have
limited community service obligations under which they are required to
provide some individuals and organizations in the community with
goods and services at either no charge or a significantly reduced
charge. 1
In addition , GBEs shall also include banks and non-bank financial
institutions under the supervision of the BSP and entities registered
with the SEC required to adopt PFRS.

2.7

Non-GBEs refer to entities which do not meet all of the above


characteristics.

2.8

Public sector entities refer to national, regional, and local governments,


and other governmental entities such as agen cies, boards,
commissions and enterprises. They are typically subject to budgetary
limits in the form of appropriations or budget authorizations (or
equivalent), which may be given effect through authorizing legislation.

2.9

Small and Medium-sized Entities (SMEs) are corporations that:


a.)

Have total assets of between P3 Million and P350 Million or total


liabilities of between P3 Million and P250 Million;

b.)

Are not required to file financial statements under Rule 68.1 of


the Securities and Regulation Code {SRC);

c.)

Are not in the process of filing their financial statements for the
purpose of issuin~ pn y;:fass of instruments in a public market;
1

d.)

e.)

3.0

Are not public utilities.

Guidelines and Procedures


3 .1

Are not holders ~condary licenses issued by a regu latory


agency, such as banks, investment houses, finance companies,
insurance companies, securities brokers/dealers, mutual funds
and pre-need companies; an d

All Government Corporations which fall under the definition of GBEs in


paragraph 2.5 hereof, and classified as GBEs (Annex A) shall apply the

Philippine Public Sector Account ing Standards 1, Present ation of Financial Stat ements, Paragraph 12, Page 84

PFRS pursuant to: (a) paragraph 10 of Preface to IPSAS and the


pertinent provisions of applicable IPSAS as adopted in PPSAS 1; (b)
BSP Circular 494 series of 2005; and (c) SRC Rules 68 and 68.1, its
amendments, and other issuances of the SEC. GOCCs categorized
as SMEs in paragraph 2.9 may adopt the PFRS for SMEs pursuant to
SEC Notice dated December 11, 2009.

4.0

3.2

All other Government Corporations which do not fall under the


classification of GBEs as defined in paragraphs 2.5 and 2.6 hereof and
classified as Non-GBEs (Annex B) shall apply the PPSAS pursuant to
COA Resolution No. 2014-003.

3.3

All GBEs and Non-GBEs in their first-time adoption of PFRS and


PPSAS, respectively, shall cause the conversion of their financial
statements in accordance with the applicable financial reporting
framework herein prescribed. Specific guidelines on the conversion
and reconciliation of converted accounts in the financial reporting
framework shall be prepared by the Government Accountancy Sector
(GAS) in consultation with the Corporate Government Sector (CGS)
and the concerned government entities.

34

The Revised Chart of Accounts (RCA) prescribed under COA Circular


No. 2014-003 dated April 15, 2014 shall be updated by the GAS to
include (a) the accounts prescribed by the BSP Financial Reporting
Package (FRP) and the pertinent accounts of other GBEs; and (b)
pertinent accounts of Non-GBEs. For agencies implementing the
electronic-New Government Accounting System (e-NGAS), procedures
on the conversion of e-NGAS database to the RCA for NGAS shall be
covered by separate guidelines. The Chart of accounts of GOCCs and
LGUs and its conversion to the New Chart of Accounts shall, likewise,
be covered by separate guidelines.

3.5

The Chief Accountants/Heads of Accounting Units and Budget


Officers/Heads of Budget Units of GBEs/Non-GBEs and other
concerned offices of all entities covered by this Circular shall be
responsible for the proper conversion of the financial statements and
reconciliation of the accounts upon their entities' first-time adoption of
the PFRS/PPSAS, as applicable, and the separate submission of the
copy of the Journal Entry Voucher (JEV) and the Financial Statements
and Reports to the CQ~itor and the GAS.

3.6

All Heads of Government Corporations shall oversee the proper


conversion of the financial statements of their respective agencies.

Saving Clause

Cases not covered in this Circular shall be referred to the GAS, for resolution.

5.0

Repealing Clause
All issuances inconsistent herewith are deemed repealed or amended
accordingly.

6.0

Transitory Provision
Pending the updating of the Revised Chart of Accounts prescribed by COA to
include specific requirements of GBEs and Non-GBEs, the following shall be
observed:

7.0

a.)

New accounts prescribed for the implementation of the PPSAS shall be


used in accordance with such standards.

b.)

For PFRS-compliant financial statements, GBEs shall use all


applicable accounts prescribed under COA Circular No. 2014-003 and
those prescribed by their respective regulatory bodies.

c.)

Accounts that have not been converted due to issues not settled as of
conversion date shall be converted by the Government Corporations to
the most appropriate account in the RCA until a supplemental circular
or clarification is issued on this matter.

Effectivity
This Circular shall take effect fifteen (15) days after publication in a
newspaper of general circulation .

~ ..
...

O~FICif 0~ TliK t:OiolloltSSIO .. 51C:Iti'T.O.Iti~T


CO..MISSION Otl .O.<lOtT

Commissioner
Officer-in-Charge

JOS~
Commissioner

AnnexA
List of GOCCs and GFis Identified as Government Business Entreprises (GBEs)
Acronym

Agency

Bangko Sentral ng Pilipinas


Philippine International Convention Center, Inc.
Development Bank of the PhH"ippmes
AI-Amanah Islamic Investment Bank of the Philippines
DBP Data Center, Inc.
DBP Leasing Corporation
DBP Management Corporation
Land Bank of the Philippines
9 LBP Insurance Brokerage, Inc.
10 LBP Leasing Corporation
11 Masaganang Sakahan, Inc.
12 LBP Resources and Development Corporation
13 People's Credit and Finance Corporation
14 National Livelihood Development Corporation
15 Philippine Deposit Insurance Corporation
16 Philippine Postal Savings Bank, Inc.
17 Government Service Insurance System
18 GSIS Family Bank
19 AFP Retirement and Separation Benefits System
20 Southern Utility Management Services, Inc.
21 Social Security System
22 Home Development Mutual Fund
23 National Home Mortgage Finance Corporation
24 Social Housing Finance Corporation
25 Palacio del Gobernador Condominium Corporation
26 Home Guaranty Corporation
27 Small Business Corporation
28 Trad~ and Investment Development Corporation of the
Phinp;iir(es
29 Phil~~ National Oil Company
30 PNOC Alternative Fuels Corporation
31 PNOC Development & Management Corp.
32 PNOC-Exploration Corporation
33 PNOC Malampaya Production Corporation
34 PNOC Renewables Corporation
35 PNOC Shipping and Transport Corporation
36 APO Production Unit
37 Philippine Ports Authority
38 Bases Conversion and Development Authority
39 BCDA Management and Holdings, Inc.
40 North Luzon Railway Corporation
41 Bataan Technology Park, Inc.
42 Clark Development Corporation

1
2
3
4
5
6
7
8

BSP
PI CCI
DBP
AIIBP
DCI
DLC
DBPMC
LBP
UBI
LLC
MSI
LBRDC
PCFC
NLDC
PDIC
PPSBI
GSIS
GFB
AFP-RSBS
SUMSI

sss
HDMF/Pag-IBIG Fund
NHMFC
SHFC
PDGCC
HGC
SBC
TIDCORP
PNOC
PNOC-AFC
PNOC-DMC
PNOC-EC
PNOC-MPC
PNOC-RC
PNOC-STC
APU
PPA
BCDA
BMHI
NLRC
BTPI
CDC

43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80

81
82

83
84
85
86
87
88
89
90
91

Clark International Airport Corporation


John Hay Management Corporation
Poro Point Management Corporation
Civil Aviation Authority of the Philippines
Philippine Economic Zone Authority
Cagayan Economic Zone Authority
Northeastern Luzon Pacific Coastal Services, Inc.
Philippine Reclamation Authority
PEA Tollway Corporation
National Development Company
Manila Gas Corporation
Inter-Island Gas Services, Inc.
Pinagkaisa Realty Corporation
Kamayan Realty Corporation
Batangas Land Company, Inc.
GY Real Estate, Inc.
First Cavite Industrial Eastate, Inc.
NDC-Philippine Infrastructure Corporation
Philippine National Construction Corporation
Alabang-Sto Tomas Development Inc.
CDCP Farms Corporation
DISC Contractors, Builders and General Services, Inc.
Tierra Factors Corporation
Traffic Control Products Corporation
Manila International Airport Authority
Philippine Aerospace Development Corporation
Food Terminal, Inc.
NIAConsult, Inc.**
Philippine Sugar Corporation
Human Settlements Development Corporation*
Philippine Agricultural Development and Commercial
Corporation**
ZNAC Rubber Estate Corporation**
National Agribusi ess Corporation**
Philippine Fi
1es Development Authority
Natural Res
s Development Corporation
'
Philippine Forest Corporation**
Philippine Mining Development Corporation
Philippine Crop Insurance Corporation
Philippine Charity Sweepstakes Office
Philippine Amusement and Gammg Corporation
Philippine Retirement Authority
Philippine International Trading Corporation
PITC - Pharma, Inc.
Duty Free Philippines Corporation
Intercontinental Broadcasting Corporation
Northern Foods Corporation
Authority of the Freeport Area of Bataan
Subic Bay Metropolitan Authority
Panay Railways

CIAC
JHMC
PPMC
CAAP
PEZA
CEZA
NLPCSI

PRA
PEATC
NDC
MGC
IIGSI
PRC
KRC
BLCI
GYRE I
FCIEI
NPIC
PNCC

ASDI
CFC
DCBGSI
TFC
TCPC
MIAA
PADC

FTI
NIACI
PHILSUCOR
HSDC
PADCC
ZREC
NABCOR
PFDA
NRDC
PFC
PMDC
PCIC
PCSO
PAGCOR

PRA
PITC
PPI
DFPC
IBC 13
NFC
AFAB
SBMA
PR

92 Mactan-Cebu International Airport Authority


93 Cebu Port Authority
94 Zamboanga City Special Economiz Zone Authority
95 Phivedec Industrial Authority
96 Marawi Resort Hotel, Incorporated
97 Bukidnon Forest, Inc.
98 PHIUA Development Center, Inc.
99 All Water Districts

*
**

Abolished, windinq up
Under liquidation

MCIAA
CPA
ZCSEZA
PIA
MRHI
BFI
PDCI
WDs

Annex B
List of GOCCs and GFis Identified as Non-Government Business Entreprises (NonGBEs)
Agency

1 Central Bank-Board of Liquidators

2 Credit Information Corporation


3 LandBank Countryside Development Foundation, Inc.
4 Millenium Challenge Account - Philippines
5 Occupational Safety and Health Center
6 Employees Compensation Commission
7 National Housing Authority
8 Philippine National Railways
9 Light Rail Transit Authority
10 National Power Corporation
11 Power Sector Assets and Liabilities Management Corporation
12 National Transmission Corporation
13 Local Water Utilities Administration
14 Metropolitan Waterworks and Sewerage System
15 National Electrification Administration
16 Philippine Postal Corporation
17 Laguna Lake Development Authority
18 Tourism Infrastructure and Enterprise Zone Authority
19 Corregidor Foundation, Inc.
20 National Food Authority
21 National Irrigation Administration
22 Philippine Coconut Authority
23 Sugar Regulatory Administration
24 National Dairy Authority
25 National Tobacco Administration
26 Quedan and Rural Credit Guarantee Corporation
'
27 Lung Center of the Philippines
28 National Kidney and Transplant Institute
29 Philippine Chil_dreijn's Medical Center
30 Philippine Heart C ter
31 Veterans Federa
of the Philippines
32 Boy Scouts of the Philippines
33 Overseas Workers Welfare Administration
34 Tourism Promotions Board
35 Nayong Pilipino Foundation
36 Philippine Health Insurance Corporation
37 Philippine Institute for Development Studies

38 Technology Resource Center

39 Philippine Institute of Traditional and Alternative Health Care


40 Philippine Center for Economic Development
41 Cottage Industry Technology Center
42 People's Television Network, Inc.

43 Cultural Center of the Philippines


44 Center for International Trade Expositions and Missions

Acronym
CB-BOL
CIC
LCDFI
MCA-P
OSHC
ECC
NHA
PNR
LRTA
NPC
PSALM
NTC
LWUA
MWSS

NEA
PPC
LLDA
TIEZA
CFI
NFA
NIA

PCA
SRA
NDA
NTA
QUEDANCOR
LCP
NKTI
PCMC
PHC
VFP
BSoP
OWWA
TPB
NPF
PHIC
PIDS
TRC
PITAHC
PCED
CITC
PTNI
CCP
CITEM

45 Development Academy of the Philippines


46 Aurora Pacific Economic Zone and Freeport Authority
47 Subic Clark Alliance Development Corporation
48 Partido Development Administration
49 Philippine Rice Research Institute
50 Southern Philippines Development Authority

DAP
APE CO
SCADC
PDA
PRRI/PhiiRice
SPDA.

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