Press Releases

Statement on DBM comments on government rightsizing policy

July 15th, 2022

I support rightsizing. Secretary Pangandaman is pursuing the right direction there. In fact, I am a sponsor of a comprehensive rightsizing of government, in the Government Modernization Act.

At the same time, we have to think deeper about the idea of a “right size” for the government. Size has to follow volume and complexity of work. What can be automated should be automated, and we can save on personnel costs there. But, if we force cost-cutting on places that need government workers, service delivery will suffer. Sometimes, the right size is bigger, not smaller.

For example, there are around 500,000 corporations, but the Securities and Exchange Commission has a plantilla of just about 350 employees. That makes it very hard to enforce anti-investor-scam laws or conduct oversight of corporate abuses. I have been trying to give the SEC quasijudicial powers to oversee bankruptcy proceedings instead of bankruptcy courts, to make the process more affordable for small businesses. That would have helped greatly during the pandemic. But, the capacity doesn’t exist. The right size for SEC is probably bigger, if we include new quasijudicial functions to fill existing policy gaps.

For downsizing, I think we can look at is government -owned and -controlled corporations. There are around 200 GOCCs that receive subsidies from the national government for their operations. The financial services GOCCs have already been consolidated to a large extent. We have our own independent pharmaceutical importing GOCC, several obscure realty development GOCCs, and several development corporations for sectors where we have directly mandated government agencies. So, we can certainly cut down personnel costs by rationalizing the functions of these GOCCs.

So, when we right-size agencies, we have to assess the volume of work, the complexity of transactions undertaken, the costs and benefits of more personnel in certain agencies, among other factors. I would certainly want a bigger complement of experts on the digital economy within the BIR. They will probably rake in more in incremental collections than we will need to pay for their salaries. I would like to see greater capacity to inspect agricultural imports. These are national priorities where the right size is probably bigger staff.

Ultimately, rightsizing has to balance both the fiscal objective and the ultimate public objective of the civil service, which is effective public service delivery. Rightsizing can’t just be downsizing.

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