References: Interview with Romeo Bernardo, business consultant (Lazaro Bernardo Tiu & Associates), vice chairman, Foundation for Economic Freedom, former undersecretary of finance, Sept. 13, 2007, Pasig City.

Peer Review Comments: The Commission on Audit is responsible for this. You can see the results of their audits at:

[ LINK ]

MinFin exercises oversight over the sector. You can also confirm this info with the IMF ROSC for the Philippines.

References: Interview with Romeo Bernardo business consultant, vice chairman of Foundation for Economic Freedom, Sept. 11, 2001, Quezon City.

Peer Review Comments: As previously noted, SOE managers are state civil servants and so covered by the Civil Service law (in theory).

We also know that regular review of SOE policy is conducted by Department of Finance and audit conducted by the COA.

We can argue that oversight is weak, but the mechanism seems to exist on paper. While SOEs themselves are prone to political interference, the oversight committee/agency (as previously discussed) is on paper "independent."

References: Interview with Romeo Bernardo, former undersecretary of finance; vice chairman of Foundation for Economic Freedom, Sept. 13, 2007, Pasig City.

Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

References: Interview with Felipe Medalla, Professor of Economics, University of the Philippines, September 13, 2007, Quezon City. Interview with Romeo Bernardo, former Undersecretary of Finance; Vice-Chairman of Foundation for Economic Freedom, September 13, 2007, Pasig City.

Peer Review Comments: Each agency in charge of oversight of SOEs has its own finance from the state coffers.

Each body of "mechanism" (as previously defined) does receive state funding which, according to the government accounts, appears relatively stable.

References: Interview with Romeo Bernardo, former undersecretary of finance; vice chairman of Foundation for Economic Freedom, Sept. 13, 2007, Pasig City.

Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Peer Review Comments: I am agreeing because the constellation of mechanisms involved in SOE oversight-- in my opinion -- provide only a slight risk of investigation to errant SOEs.

In theory, the Ombudsman also has the right to initiate investigations on SOEs. The COA conducts audits of SOEs (I have previously provided evidence of this and links to reports).

References: Interview with Romeo Bernardo, former undersecretary of finance; vice chairman of Foundation for Economic Freedom, Sept. 13, 2007, Pasig City.

Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Peer Review Comments: I have previously disagreed at length.

In addition, I see that the SEC is partly responsible for oversight and enforcement of corp govt of SOEs.

[ LINK ]

If that is true, we know the SEC has power of enforcement, and it therefore follows that, in addition to the previous mechanisms I have described of SOE oversight and enforcement, the SEC provides another "mechanism" (as called for in this question) of imposing discipline on SOEs.

References: The Commission on Audit is an independent body created by the Constitution. Art. IX "Constitutional Commissions", Part D, Sec. 2 gives it the power to audit government-owned or controlled corporations.

www.lawphil.net

Peer Review Comments: The fact that the COA has access (as does Congress and the President) is not equivalent to citizen access in my mind. I don't know whether in practice Article 3, section 7 of the constitution applies to GOCCs, but I would expect so.

References: Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Interview with Yvonne Chua, journalist (formerly Philippine Center for Investigative Journalism, now professor of mass communications, University of the Philippines), Sept. 12, 2007, Quezon City.

References: Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Interview with Yvonne Chua, journalist (formerly Philippine Center for Investigative Journalism, now professor of mass communications, University of the Philippines), Sept. 12, 2007, Quezon City.

Peer Review Comments: Although I agree with the score, the comment is vague and confusing. There cannot be a "standard" that is privy to the Commission on Audit and another that is accepted internationally. There may be some slight differences in the systems and procedures (e.g., the American and British systems), but they nonetheless are accepted internationally. In practice, the Philippine system -- and, in particular, COA -- uses the U.S. professional accounting and auditing standards. However, its auditors (as well as other private accountants and auditors) are not known for religiously adhering to the ethical standards that go with the professional standards. There is a tendency to change entries in the financial statements to appear that financial records of companies follow the usual and accepted accounting and auditing procedures and conform with international standards. Normally this is done in exchange for an additional "service fee."

References: Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Interview with Yvonne Chua, journalist (formerly Philippine Center for Investigative Journalism, now professor of mass communications, University of the Philippines), Sept. 12, 2007, Quezon City.

Peer Review Comments: Old records may be difficult to retrieve. This is due to the outdated system of storage and retrieval that some companies continue to maintain.

References: Interview with Felipe Medalla, professor of economics, University of the Philippines, Sept. 13, 2007, Quezon City.

Interview with Yvonne Chua, journalist (formerly Philippine Center for Investigative Journalism, now professor of mass communications, University of the Philippines), Sept. 12, 2007, Quezon City.