A comparative study on the effect of privatization on the profitability of selected government owned and/or controlled corporations in the Philippines

• Main Authors: Batac, Erica R., Cabuhat, Clarita M., Quidim, Gherlyn C.
• Format: text
• Language: English
• Published: Animo Repository 2005
• Subjects: Government corporations > Phiilippines; Government ownership > Philippines; Privatization > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18508
• Institution: De La Salle University

The study discusses the effects of privatization on the profitability as measured by the return on equity of selected government owned and/or controlled corporations in the Philippines. The two GOCCs selected are Petron Corporation and Philippine National Bank. This study included the comparison of the pre- and post-financial conditions of the said companies, in which net profit margin, total asset turnover and financial leverage multiplier are used to evaluate profitability. A modified time frame of 15 years is used i.e. five years before and after privatization, excluding the five (5) years in between i.e. five year adjustment period wherein the GOCC underwent the privatization process. The Du Pont system of analysis and time series analysis are utilized in the study to compare the effects of privatiziation on the profitability of GOCCs. The study showed that privatization indeed affects the profitability of selected GOCCs. However, it is not solely privatization that influenced the firms but other factors such as political uncertainties and economic conditions.