THE Aquino administration will shut down all non-operational government owned or controlled corporations.

Department of Finance Undersecretary Jeremias Paul told reporters that the GOCC Commission will formalize the closure of state firms that are no longer performing their respective mandates in the next six months.

After heading the DOF-Corporate Affairs Group, Paul will soon take over as the head of the Domestic Finance Group and Legislative Liason to replace Undersecretary Gil Betran, who will handle the administrative concerns of the DOF.

“Those that are non-operational, we will formalize the closure. That is the logical move as embodied in the GOCC law,” Paul said.

“The direction is further reduction in the number of GOCCs,” he added.

The GOCC Governance Act of 2011, which took effect in June, provides for the rationalization of state-run firms, and the corresponding salaries and benefits of their officials and employees.

The DOF monitors 14 GOCCs, out of a total 158. If water districts are included in the list, the number would rise to 736, but most of these districts are no longer operational.

“Some of these require SEC requirements to be formally closed down. But I haven’t seen any charter on the GOCCs that needs legislative enactment to be shut down,” Paul said, referring to the Securities and Exchange Commission.

Besides shutting down non-operational state-owned firms, the GOCC Commission also is mulling over the merger of redundant or similarly situated GOCCs, and the privatization of some firms that provide social functions.

“For those that would be retained, it is critical to have good governance, quality of entry of the board of directors. There will be fitness test, among others,” Paul said.

“There can also be mergers and consolidations as stated in the GOCC law. The real politic would be dealing with people,” he said.

He said most of the non-operational GOCCs however no longer have employees. “At most, there are only two employees per GOCC that will be closed down,” he added.