E0 can’t cover all GOCCs – Drilon

EXECUTIVE Order (EO) 7 issued by President Benigno Aquino 3rd cannot cover the government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs) that are exempted by law from the Salary Standardization Law, Sen. Franklin Drilon said Thursday.

The EO suspends for three months the excessive perks and bonuses of members of the board of directors or trustees of GOCCs and GFIs pending issuance of new policies and guidelines on their compensation.

Drilon, a former justice secretary, said that an EO could not possibly amend or repeal the law passed by Congress exempting 27 GOCCs and GFIs from the coverage of the Salary Standardization Law. These laws also granted the boards of the 27 exempted GOCCs and GFIs the authority to determine their compensation.

“The compensation of the employees is being fixed and decided by the board of directors by virtue of their charters enacted by Congress. These are specific charters where the power to fix the salary is in the board of directors. The EO cannot deprive the board of directors of the power to decide on the compensation scheme of the GOCC,” he contended.

He said that abuses by the boards of the 27 GOCCs and GFIs could be corrected only through legislation. He said that the Senate Committee on Finance which he heads is crafting a bill that would bring the salary structure of the 27 GOCCs and GFIs into the review process, which will be done by the executive branch.

“By next week, we should be able to already discuss the proposed legislation. On Monday, we will be inviting some resource persons to help us and comment on the draft piece of legislation that we will propose to be adopted by Congress,” he added.

He said the proposed legislation is the result of the series of inquiries by his committee into the excessive pay and perks of top executives of GOCCs and GFIs.

In a related development, Sen. Ralph Recto urged the executive department Thursday to exempt from the chopping block the GOCCs and GFIs that were not meant to make money.

At least 52 of the 736 GOCCs have registered losses in 2008, according to Department of Finance data, with the National Food Authority (NFA) posting the highest net loss followed by Light Rail Transit (LRT) National Power Corp., Bases Conversion Development Authority, and Metropolitan Waterworks and Sewerage System.

“Not all GOCCs are there to make money but were chartered to make the lives of our people a little better,” he explained.

Recto, the chairman of the Senate Committee on Government Corporations and Public Enterprises, urged that in purging non-performing GOCCs, the administration should consider that some state enterprises were bestowed the unique mandate of delivering basic services to the people.

Bite the bullet

“Government must have to bite the bullet for now and allow losing government-owned and -controlled corporations performing ‘missionary’ services to continue flourishing amid their flunking revenue numbers,” he said.

Among the GOCCs performing missionary functions, according to Recto, are the NFA, National Electrification Administration (NEA) the Local Water Utilities Administration (LWUA), the Philippine Postal Corp. (Philpost), the Metro Rail Transit (MRT) and the LRT.

Recto said NFA plays a key role in stabilizing food supply such as rice, the NEA engages in energizing far-flung villages only reached by “petromax” while LWUA delivers water services to areas where big business would not dare to thread.

He said the Philpost, which delivers snail-mail for our internet-resistant population, should be allowed to continue their “missionary” work despite losing money.

Recto said the government might also have to continue the operating losses of MRT-LRT in exchange of providing efficient and cheap mass transportation system to the commuting public.

He, however, said “fat cats” in these missionary GOCCs must shed their indecent bonuses and perks “to reduce the national guilt of exempting them from the purge.”

Meanwhile, House Speaker Felicia-no Belmonte Jr., a former GOCC official himself, backed the President’s decision to suspend the hefty bonuses received by GOCC employees.

“He has done this [stopping allowances], I go along with him. The job of those working in the GOCCs can be very demanding. They should have some perks, but it should be tempered,” Belmonte said in a press conference.

The Speaker made the statement a day after Mr. Aquino ordered three months’ suspension of excessive perks and bonuses of top executives of GOCCs and GFI thru EO 7.

Belmonte, however, cited that the task of the GOCC people are no walk in the park and that the recent EO does not seek to deprive the GOCC officials what is due them. –Efren L. Danao, Senior Reporter with Report From Llanesca T. Panti, Manila Times