PRIVATIZATION

 naimbento yung term na ‘privatization’ sa Great Britain to describe the policy of transforming
government organizations into investor-owned companies.
 in a simple way, nag o’occur ang privatization kapag trinansfer yung pag h’handle ng mga public
assets ng government sa private sector para sila yung mag control and mag operate non. (yung
private sector comprises of enterprises na ang nagpapatakbo is yung mga private individual and
groups na ang purpose is to make a profit)

 nag occur ang pag-p’pirivatized ng numerous national assets sa Great Britain sa administration ni
Margaret Thatcher during the late 1970s and early 1980s. During that time one of the examples
that they privatized are their “British airport” in order to remove the financial burdens to the
government where it led to growing and earning faster than state-owned airports.

 It led to restructuring, cost-cutting and a more market-focused posture

 privatization led to restructuring or reorganizing to improve their competitiveness by cutting
costs, improving efficiency, and boosting profits.
 privatization led to cost-cutting which it reduces the fiscal burden on the state particularly if they
are facing financial challenges. Kapag na privatized ang mga public assets magkakaroon ng cost-
cutting or ma r’reduce ang cost where the government can save money by not having to fund
public corporations and their activities dahil handle na ito or controlled na ito ng private sector.
 nagiging market focus ito kapag hawak na ng private sector since gumagawa sila ng mga
strategies on how they would improve their service to their consumer to meet their satisfaction.

5 FORMS OF PRIVATIZATION:

1. Complete privatization is the outright sale of government assets to the private sector. Meaning
of outright sale is without further payments due, restrictions, or qualifications, simply directed
or completely na privatized or naibenta yung public assets sa private sector where wala ng
control yung public sector.

2. Privatization of Operations is the transfer of the managerial and operational duties of publicly
owned facilities to businesses in the private sector. In this structure, fees from individual users of
the government asset are collected by the private sector company, which makes money.

3. Contracting Out is when a private company produces certain services in accordance with a
contract meaning may kontrata kung hanggang kailan lang itutuloy ng private sector yung
service. So here, babayaran ng government yung private sector for doing its services. One the
example nito is yung mga collection and disposal of solid waste.

4. Franchising - The process by which a government agency gives a private company the sole right
to provide services within a certain region is known as franchising. The private firm generates
revenue by collecting user fees. Cable television is the most prevalent example of this kind of
privatization.
 5. Open competition is comparable to pure competition in that it permits numerous private
companies to compete for customers inside a certain political territory Potential example of this
kind of privatization include internet and phone service providers.

REASONS FOR PRIVATIZATION:

 Cost-Cutting - kapag na privatized ang public assets, na r’reduce nito ang cost ng government sa
mga properties nila because they don’t have to funds its activities or operations dahil handle na
ito ng private sector.

 Risk transfer - government often privatize in order to transfer the risk to the private sector in
certain project. Particularly if the for of privatization is contracting out, kapag hindi kaya ng
government gawin ang isang activities they transfer the risk to the private sector kapalit ng
monetary sum or amount of money.

 Source of Revenue - new source of revenue is also one of the reasons kung bakit nagkakaroon
ng privatization. Kapag binenta ng government ang public assets sa private sector magbibigay ng
monetary sum ang private sector sa government kapalit ng public assets particularly if the form
of privatization is complete privatization. In this case, that monetary sum can be the new source
of revenue ng government kung saan pwedeng gamitin ito para ipambayad ng debt ng bansa, or
gamitin yung monetary sum pandagdag sa revenue para matapos ang mga new projects ng
government and pwede rin ito magamit to meet the budgetary needs ng isang bansa.

 Quality of Service -the government may be looking to provide a higher level of service for the
people but they cannot provide it by themselves so they privatize certain assets or services to
improve its quality of service. Kapag na privatize ang isang assets which is handle na ng private
sector na i’improve nila yung service quality dahil they are competitive to the market kung saan
naka focus sila kung paano sila makakapag provide ng efficient customer service by making
strategies and innovative ways.

 Expertise – there are cases that they privatize certain operations because it needs expertise so
trina-transfer yung pag h’handle ng operations or services sa private sector because they may be
able to have expertise to that operation and most of the private sector offers many programs to
enhance their skills at work kaya nagiging expert sila sa gawain in order to provide the best
quality of service.

 Timeliness - there are some situations na yung government na mayroon silang skills to complete
the project pero hindi nila ma c’complete within the desired timframe due to lack of time or
resources kaya priniprivatized nila yung projects since private sector is profit driven where they
can hire employees that are efficient to finish the work before the deadline.
  Flexibility - private companies usually have more flexibility than the government in their
management and decision-making processes due to fewer regulatory oversight and reporting
requirements since yun lang ang focus nila unlike sa government na maraming kailangan na i
‘prioritize na operations and services to the citizens.

PRIVATIZATION EXAMPLE (MERALCO):

 In 1970, the Philippine Government made it a state policy for the government to own all major
generating facilities na kung saan kasama dito yung utility na electricity which is the Meralco.
 Then afterwards, during the administration of former President Corazon Aquino, na launched
yung Philippine privatization program in 1986 which is the purpose of this program was to sell all
state-owned companies to the private sector in order to lessen the financial burdens na finaface
ng Philippine government that time. As a result of this, na restore ulit ng lopez family yung
kanilang ilang holdings including the Meralco.
 So, after ma privatize ng company na ito, the Meralco launched a large-scale investment program
to upgrade its distribution system in 1989, Moreover they also enhance their customer service
component by restructuring their organization into regional components, which is inomprove
nila yung kanilang service after ma privatize yung Meralco
 And in present time, it’s still a private owned company with JG summit holding and other major
shareholders.

 As time goes by, services are evolving and the Meralco mission is to offer the best value in
energy, goods, and services. In addition, we can imply it during the pandemic where Meralco
demonstrated that it was fulfilling this goal by coming up with innovative with innovative ways to
make utility transactions safer, easierand more convenient for customers.
 Na kung saan, according to the in Integrated Report of Metro Pacific Investments Corporation
(2022) that Meralco received an 8.1 customer satisfaction rating in 2021, 7.4% higher than its
score in 2020.

one of their innovative solutions that they made are:

 Meralco invested in its SMS iniatives in order to keep customers updated with information
relevant to them, including bill reminders and payment confirmation, and other service-related
information to provide customers proactive updates.

 They also invest in Virtual Customer Service or VCA which is beneficial nung pandemic kase it
offers convenience, accessibility, and safety to customers when discussing their concerns Kahit
nag w’work lang from home yung Meralco representatives.

 Online Customer Appointment (OCA) so they created it para ma reduce yung waiting time ng
mga customers, so here customers can make a schedule appointment if they want to speak in
person sa mga customer care representative ng company which really convenient kase hindi na
nila kailangan pang mag intay because they already have a schedule appointment
  Customer Account Number (CAN) the customer can use their permanent 10-digit CAN para
makapag pay yung mga customers sa payment partners ng Meralco such as Meralco app, bpi
quick pay and more.

Moreover, they also invested to certain tools to improve the service ng kanilang mga employees;

 Meter Reading App (MRA), here each crew member has (MRA) so that they can now calculate
the best routes between their locations and meters they will be servicing. It also alerts crewmen
about potential concerns involving meters, allowing them to address these more efficiently.
 Realtime Payment Validation App – nakakatulong to sa kanilang disconnection personnel to
validate the status of disconnection Field orders before nilang i’disconnect yung meter ng
kanilang customer. This serves as an additional safeguard which prevents the occurrence of
"salisi," where yung new Meralco crew arrives sa meter ng customer on the same day na
magbabayad yung customer. The positive results of this are that nakakatulong ‘to para hindi ma-
interrupt yung service sa mga customers.

 Furthermore, we can imply to the privatization example how service are evolving in the world
like the company Meralco they enhance their distribution ystem, they enhance their customer
service into regional components para mas marami silang ma bigyan ng service and they also
make innovative ways during pandemic wherein nakasabay sila sa challenges ng COVID19 and
hindi ito naging reason para matapos yung pagbibigay nila ng good service for their customer
which caused to positive results kung saan naging convenient yung transaction between the
company and customers with the help of their innovative solutions na kung saan mataas yung
nakuha nilang rating ng customer satisfaction noong 2021.