.'.

~epublit of tbt labiliplJiuts

COMMISSION ON AUDIT
<fommoniuealtb 2ltJrnuc, ~llt?on QI:icy, ~bilippincs>

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 Likewise, to align with the.~iling international standards and

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
 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 GBEs are government corporati~hich have all the following

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

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;

1 7
 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.

2.6 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.) 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
e.) Are not public utilities.

3.0 Guidelines and Procedures

3 .1 All Government Corporations which fall under the definition of GBEs in

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

1
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.

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.

4.0 Saving Clause

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

4
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:

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.

7.0 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)

Agency Acronym

1 Bangko Sentral ng Pilipinas BSP

2 Philippine International Convention Center, Inc. PI CCI
3 Development Bank of the PhH"ipp·mes DBP
4 AI-Amanah Islamic Investment Bank of the Philippines AIIBP
5 DBP Data Center, Inc. DCI
6 DBP Leasing Corporation DLC
7 DBP Management Corporation DBPMC
8 Land Bank of the Philippines LBP
9 LBP Insurance Brokerage, Inc. UBI
10 LBP Leasing Corporation LLC
11 Masaganang Sakahan, Inc. MSI
12 LBP Resources and Development Corporation LBRDC
13 People's Credit and Finance Corporation PCFC
14 National Livelihood Development Corporation NLDC
15 Philippine Deposit Insurance Corporation PDIC
16 Philippine Postal Savings Bank, Inc. PPSBI
17 Government Service Insurance System GSIS
18 GSIS Family Bank GFB
19 AFP Retirement and Separation Benefits System AFP-RSBS
20 Southern Utility Management Services, Inc. SUMSI
21 Social Security System sss
22 Home Development Mutual Fund HDMF/Pag-IBIG Fund
23 National Home Mortgage Finance Corporation NHMFC
24 Social Housing Finance Corporation SHFC
25 Palacio del Gobernador Condominium Corporation PDGCC
26 Home Guaranty Corporation HGC
27 Small Business Corporation SBC

Phinp;iir(es
29 Phil~~ National Oil Company
30 PNOC Alternative Fuels Corporation
31 PNOC Development & Management Corp.
r
28 Trad~ and Investment Development Corporation of the TIDCORP

PNOC
PNOC-AFC
PNOC-DMC
32 PNOC-Exploration Corporation PNOC-EC
33 PNOC Malampaya Production Corporation PNOC-MPC
34 PNOC Renewables Corporation PNOC-RC
35 PNOC Shipping and Transport Corporation PNOC-STC
36 APO Production Unit APU
37 Philippine Ports Authority PPA
38 Bases Conversion and Development Authority BCDA
39 BCDA Management and Holdings, Inc. BMHI
40 North Luzon Railway Corporation NLRC
41 Bataan Technology Park, Inc. BTPI
42 Clark Development Corporation CDC
43 Clark International Airport Corporation CIAC
44 John Hay Management Corporation JHMC
45 Poro Point Management Corporation PPMC
46 Civil Aviation Authority of the Philippines CAAP
47 Philippine Economic Zone Authority PEZA
48 Cagayan Economic Zone Authority CEZA
49 Northeastern Luzon Pacific Coastal Services, Inc. NLPCSI
50 Philippine Reclamation Authority PRA
51 PEA Tollway Corporation PEATC
52 National Development Company NDC
53 Manila Gas Corporation MGC
54 Inter-Island Gas Services, Inc. IIGSI
55 Pinagkaisa Realty Corporation PRC
56 Kamayan Realty Corporation KRC
57 Batangas Land Company, Inc. BLCI
58 GY Real Estate, Inc. GYRE I
59 First Cavite Industrial Eastate, Inc. FCIEI
60 NDC-Philippine Infrastructure Corporation NPIC
61 Philippine National Construction Corporation PNCC
62 Alabang-Sto Tomas Development Inc. ASDI
63 CDCP Farms Corporation CFC
64 DISC Contractors, Builders and General Services, Inc. DCBGSI
65 Tierra Factors Corporation TFC
66 Traffic Control Products Corporation TCPC
67 Manila International Airport Authority MIAA
68 Philippine Aerospace Development Corporation PADC
69 Food Terminal, Inc. FTI
70 NIAConsult, Inc.** NIACI
71 Philippine Sugar Corporation PHILSUCOR
72 Human Settlements Development Corporation* HSDC
73 Philippine Agricultural Development and Commercial PADCC
Corporation**
74 ZNAC Rubber Estate Corporation** ZREC
75 National Agribusi ess Corporation** NABCOR
76 Philippine Fi 1es Development Authority PFDA
77 Natural Res s Development Corporation ' NRDC
78 Philippine Forest Corporation** PFC
79 Philippine Mining Development Corporation PMDC
80 Philippine Crop Insurance Corporation PCIC
81 Philippine Charity Sweepstakes Office PCSO
82 Philippine Amusement and Gam·mg Corporation PAGCOR
83 Philippine Retirement Authority PRA
84 Philippine International Trading Corporation PITC
85 PITC - Pharma, Inc. PPI
86 Duty Free Philippines Corporation DFPC
87 Intercontinental Broadcasting Corporation IBC 13
88 Northern Foods Corporation NFC
89 Authority of the Freeport Area of Bataan AFAB
90 Subic Bay Metropolitan Authority SBMA
91 Panay Railways PR
 92 Mactan-Cebu International Airport Authority MCIAA
93 Cebu Port Authority CPA
94 Zamboanga City Special Economiz Zone Authority ZCSEZA
95 Phivedec Industrial Authority PIA
96 Marawi Resort Hotel, Incorporated MRHI
97 Bukidnon Forest, Inc. BFI
98 PHIUA Development Center, Inc. PDCI
99 All Water Districts WDs

* Abolished, windinq up
** Under liquidation
Annex B
List of GOCCs and GFis Identified as Non-Government Business Entreprises (Non-
GBEs)
Agency Acronym
1 Central Bank-Board of Liquidators CB-BOL
2 Credit Information Corporation CIC
3 LandBank Countryside Development Foundation, Inc. LCDFI
4 Millenium Challenge Account - Philippines MCA-P
5 Occupational Safety and Health Center OSHC
6 Employees Compensation Commission ECC
7 National Housing Authority NHA
8 Philippine National Railways PNR
9 Light Rail Transit Authority LRTA
10 National Power Corporation NPC
11 Power Sector Assets and Liabilities Management Corporation PSALM
12 National Transmission Corporation NTC
13 Local Water Utilities Administration LWUA
14 Metropolitan Waterworks and Sewerage System MWSS
15 National Electrification Administration NEA
16 Philippine Postal Corporation PPC
17 Laguna Lake Development Authority LLDA
18 Tourism Infrastructure and Enterprise Zone Authority TIEZA
19 Corregidor Foundation, Inc. CFI
20 National Food Authority NFA
21 National Irrigation Administration NIA
22 Philippine Coconut Authority PCA
23 Sugar Regulatory Administration SRA
24 National Dairy Authority NDA
25 National Tobacco Administration NTA
26 Quedan and Rural Credit Guarantee Corporation ' QUEDANCOR
27 Lung Center of the Philippines LCP
28 National Kidney and Transplant Institute NKTI
29 Philippine Chil_dreijn's Medical Center PCMC
30 Philippine Heart C ter PHC
31 Veterans Federa of the Philippines VFP
32 Boy Scouts of the Philippines BSoP
33 Overseas Workers Welfare Administration OWWA
34 Tourism Promotions Board TPB
35 Nayong Pilipino Foundation NPF
36 Philippine Health Insurance Corporation PHIC
37 Philippine Institute for Development Studies PIDS
38 Technology Resource Center TRC
39 Philippine Institute of Traditional and Alternative Health Care PITAHC
40 Philippine Center for Economic Development PCED
41 Cottage Industry Technology Center CITC
42 People's Television Network, Inc. PTNI
43 Cultural Center of the Philippines CCP
44 Center for International Trade Expositions and Missions CITEM
45 Development Academy of the Philippines DAP
46 Aurora Pacific Economic Zone and Freeport Authority APE CO
47 Subic Clark Alliance Development Corporation SCADC
48 Partido Development Administration PDA
49 Philippine Rice Research Institute PRRI/PhiiRice
50 Southern Philippines Development Authority SPDA.