Even Christmas bonuses have been disallowed

PRESIDENT Benigno Aquino III has issued an Executive Order suspending all allowances and incentives—including Christmas bonuses—to the board members of government-owned corporations amid a public outcry over these officials’ excessive perks.

These officials will receive only their basic salaries and “reasonable per diem” until Dec. 31, and there will be a moratorium on the increases in salaries, allowances, incentives and other benefits—except those covered by the Salary Standardization Law—until the increases are approved by the Palace.

The President also created a task force on corporate compensation that will review all remuneration granted, including the discretionary funds to the board members, officers and rank-and-file employees of government corporations.

The task force will be led by the Office of the President and have representatives from the Finance and Budget Departments and the Civil Service Commission.

In a text message from Hanoi, Budget Secretary Florencio Abad said the task force hoped to finish its review before Christmas.

The task force is expected to recommend measures to rationalize the compensation system in government-owned and -controlled corporations, including a ceiling on total compensation.

All such companies have been ordered to submit information on all salaries, allowances, incentives and other benefits under both direct and indirect compensation to the task force. Indirect compensation includes provident fund benefits and additional health insurance.

Mr. Aquino listed six guiding principles for the rationalization of compensation:

• All government personnel will be paid just and equitable compensation in accordance with the principle of equal pay for work of equal value

• Compensation will be comparable with those in the private sector to attract, retain and motivate a corps of competent civil servants

• Compensation will be made standard

• A performance-based incentive plan will be established

• A periodic review of the compensation system will be conducted, taking into account the changes in skills and competency requirements and the possible erosion in purchasing power due to inflation

• Compensation will be kept fair and reasonable in recognition of fiscal realities.

In keeping with the cost-cutting mood in the Palace, Foreign Affairs said a reduction in its budget for 2011 would slow plans to buy or repair Philippine property abroad and postpone plans to buy new cars for its embassies there.

Foreign Affairs Secretary Alberto Romulo said the lower spending plan would also reduce legal assistance funds for Filipinos abroad and the department’s ability to protect workers overseas who faced prosecution.

Senator Ralph Recto on Wednesday urged the President to put one person in charge of government-owned and -controlled corporations to ensure they performed well and remitted their earnings to the National Treasury.

Following reports that some executives were enjoying up to 25 bonuses a year, Recto said some government corporations were in need of “adult supervision.” –Joyce Pangco Pañares with Karl Allan Barlaan and Christian Cardiente, Manila Standard Today