SBMA, BCDA among losing state firms

Published by rudy Date posted on August 17, 2010

MANILA, Philippines—Two government owned and controlled corporations (GOCCs), whose executives have been listed as among the highest paid officials in the country, are among those losing state-run firms, a government official told a Senate hearing on Tuesday.

Testifying at the hearing of the joint committees on finance, and government corporations, Finance Undersecretary Jeremias Paul Jr. identified the Subic Bay Metropolitan Authority (SBMA) and the Bases Conversion Development Authority (BCDA) as among government corporations that incurred losses in 2008.

At present, there are 157 state firms and only 26 of them are exempted from the Salary Standardization Law.

Paul’s revelation caught Senator Franklin Drilon, chairman of the finance committee, by surprise.

“SBMA and BCDA are losing corporations? And yet their executives are the highest paid in the country, in the entire bureaucracy? Is that what you are telling us?” asked Drilon.

Paul answered yes, citing the 2008 report of the Commission on Audit.

“And yet in 2008, the chair and the administrator of the BCDA made a P30 million per COA report? Wow!” the senator exclaimed.

Paul said he was told that the losses were due to foreign exchange.

Based on COA report, SBMA chairman Armand Arreza was consistently listed as the highest paid government official from 2007 to 2009 while BCDA president Narciso Abaya landed in the top 10 highest paying official for the same period.

In 2008, Arreza received the most salaries, allowances and “extraordinary and miscellaneous fees” with over P30 million, while Abaya got P6.2 million during the same period.

Senators were also shocked to find out during the hearing that on top of his basic salary, allowances and bonuses, Arreza’s budget in 2009 included some P18.1 million in “extraordinary” and miscellaneous expenses, P5 million intelligence fund and another P1.7 for gasoline allowance.

Arreza’s basic salary for 2009 was P1.5 million, COA chairman Reynaldo Villar told committee members.

Because of this, Arreza and other top GOCC executives will be summoned by the Senate next week to explain what Drilon described as “excessive and abusive” pays and allowances.

At a press conference after the hearing, Drilon also noted an apparent failure of the state corporations to comply with the law, requiring them to remit to government at least 50 percent of their earnings.

To address these problems, Drilon said Congress should pass a measure that will delegate to the Department of Budget and Management the power “to fix” the compensation package of employees and officials of government corporations based on certain standards that will be defined in the proposed legislation.

“Maybe part of the suggested legislation is to impose standards for arriving at a compensation package for these executives so that again, it’s not an absolute discretion on the part of anyone, including the President, but the DBM that sets the salary in accordance with reasonable standards,” said the senator during the hearing. –Maila Ager
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