The postal business has no future. The value of Philippine Postal Corporation (PHLPost) does not lie in the mailing service. Mail revenue does not cover operating cost and has no prospect of competing against private couriers. PHLPost's true value lies in its vast landholdings.
PHLPost operates 1,220 post offices in 1,037 cities and municipalities (PHLPost Annual Report CY2024), and the post office in a Philippine municipality is typically sited at the poblacion, adjacent to the municipal hall, church, plaza or public market. No private courier could now assemble a portfolio of town-center lots at that scale.
PHLPost is a chartered GOCC under R.A. No. 7354 (1992) and carries a universal service obligation (Sec. 5(c)) and the franking privilege of designated national offices (Sec. 35), compensated through annual subsidy.
Its revenues fell from P4.17 billion in 2019 to P2.16 billion in 2020 (COA Annual Audit Report, PHLPost, CY2020) and were P2.197 billion in 2024 (PHLPost Annual Report CY2024). Net deficit before subsidy was P740.40 million in 2020 (COA AAR CY2020) and a P433 million loss before a P515 million subsidy. For 2024, PHLPost told Congress that a P546 million subsidy was required to avoid a P549 million loss. Subsidies of P541.32 million (2019), P500.26 million (2020), P520.256 million (2021) and P515 million (2022) show a structural dependence on the General Appropriations Act of roughly P500 million per year.
PHLPost held about 15 percent of the business-to-consumer small-package market in 2019. The rest of the market is served by J&T Express, LBC, Ninja Van, Flash Express, and other private courier services, and they do so without government subsidy. In 2024, PHLPost missed its own domestic express delivery standards in Metro Manila and the provinces. Only 70 percent of outlets could track and trace. Only 55 percent of employees met the competency standard. 3,018 regular employees were outnumbered by 3,302 contract-of-service workers. And 616 municipalities had no post office (PHLPost Annual Report CY2024).
Article XII, Section 16 of the Constitution permits the creation of GOCCs by special charter only “in the interest of the common good and subject to the test of economic viability.” An enterprise requiring about P500 million in annual subsidy since 2019 to remain solvent does not satisfy that test. R.A. No. 10149 (GOCC Governance Act of 2011), Sec. 5(a), charges the Governance Commission for GOCCs to determine whether a GOCC should be “reorganized, merged, streamlined, abolished or privatized.”
No new legislation is required to privatize PHLPost. The Privatization Council and the Privatization and Management Office under E.O. No. 323 (2000) and Proclamation No. 50 (1986) are the standing machinery for disposition of government corporate assets.
If privatized, foreign ownership is permissible, except for the ownership of land (which could be leased at market rate). Postal service is not a public utility under Commonwealth Act No. 146 as amended by R.A. No. 11659 (2022), and the 13th Regular Foreign Investment Negative List contains no restriction on foreign ownership of a postal service.
The privatization of PHLPost will rise and fall on the sale and turnover of its real estate portfolio. Thus, there should be a title audit of every PHLPost lot and registration in the name of the Republic.
The franking privilege under Sec. 35 must be converted into a budgeted purchase of postal services at published rates, chargeable to the Judiciary, which generated approximately 85 percent of franked volume in 2022.
The state has spent over P2.5 billion in subsidy over five years to keep an unprofitable mail business attached to an unregistered land bank. It is time to sell the post office.
