Palace clips GOCC perks

President Benigno Aquino 3rd has ordered three months’ suspension of excessive perks and bonuses of top executives of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs).

Malacañang on Wednesday issued Executive Order (EO) 7 directing rationalization of compensation and position classification system in GOCCs and GFIs.

EO 7 suspends the grant of the “allowances, bonuses, incentives and other perks” to members of the board of directors or trustees of GOCCs and GFIs until December 31, 2010, pending issuance of new policies and guidelines on their compensation.

The executive order, signed on September 8 by President Aquino, will take effect immediately.

It called for a moratorium on increases in rates of salaries, allowances and other benefits of top officials of the GOCCs and GFIS, except salary adjustments provided under EO 811 and EO 900.

The latest executive order also mandates the creation of Task Force on Corporate Compensation (TFCC) to review “all renumerations granted to members of the board of directors or trustees, officers and rank-and-file employees, as well as discretionary funds of GOCCs and GFIs.”

The TFCC is composed of the Office of the President as chairman, and the Department of Budget and Management, the Department of Finance and the Civil Service Commission as members.

EO 7 also directed all GOCCs and GFIs to submit to the TFCC “information on all salaries, allowances, incentives and other benefits under both direct and indirect compensation, granted to members of the board of directors or trustees, officers and rank-and-file employees, as well as discretionary funds.”

The excessive perks of GOCC and GFI officials came under fire after the Senate Committee on Finance headed by Sen. Franklin Drilon uncovered bonuses covering several months granted to officials of the Metropolitan Waterworks and Sewerage System (MWSS), among others.

MECO admits excesses

After several hearings revealing the excesses of GOCCs, Drilon evidently found something to smile about.

“It is quite refreshing that once in a while, the head of a GOCC will admit that the salary structure in the GOCC concerned is scandalous,” he said, referring to Chairman Amadeo Perez of the Manila Economic and Cultural Office (MECO) in Taiwan.

During Wednesday’s hearing, Perez admitted that the retirement benefits of MECO directors were excessive and should be reviewed.

“A director who has served two consecutive years and then retire on the third year will get P600,000 for each year of service,” he said.

Perez added that in his 27 years of public service as mayor and Pangasinan congressman, he got a retirement pay of only a little more than P1 million.

He promised to submit MECO books for scrutiny by the Commission on Audit (COA).

Assistant Commissioner Jaime Naranjo of the Audit commission had always refused COA access to the MECO books.

MECO is audited by a foreign firm based in Taiwan. It does not have any charter.

Created under the Corporation Law, MECO often describes itself as a “private corporation.”

It was established to take care of Philippine trade relations with Taiwan after the Philippines pursued the One-China policy.

China considers Taiwan as its mere province.

Perez, who got appointed to MECO by the Aquino administration, said the office gets revenues from the issuance of passports and visas and notarization of employment papers.

Drilon said that documents submitted to him showed that MECO in Taiwan earned $3.4 million in the last two years that it remitted to the main office in Manila.

He added that this should have been remitted to the National Treasury.

Drilon said that for the last 20 to 30 years, the MECO board prepared the agency’s budget and disbursed its funds as if it were a government on its own.

He cited the Philippine Deposit Insurance Corp. for adopting a Code of Ethics, which includes treatment of perks from banks propped up by PDIC funds.

“We will see if we could include this Code of Ethics in the bill we are drafting for GOCCs,” Drilon said.

Strange compensation

The senator criticized the National Home Mortgage Finance Corp. (NHMFC) for its “strange” compensation package for its chairman.

“Records show that in 2009, the NHMFC president had a basic salary of P439,500 and a discretionary allowance of P2.3 million. This is the first time I have seen this kind of salary structure where the discretionary allowance is almost six times the monthly pay!” Drilon said.

During the same hearing, Jose Ferdinand Rojas 2nd, the general manager of the Philippine Charity Sweepstakes Office (pcso), confirmed that the PCSO had lost about P1 billion as mentioned by Chairman Margarita Juico at a recent House hearing.

“There was a lot of spending by PCSO so we have a lot of payables although we have revenues,” Rojas said.

He added that the PCSO is aiming to increase revenues and cut costs.

Sen. Ralph Recto said that he found it hard to believe that PCSO could suffer losses.

He asked Rojas for more details about PCSO revenues and the operation of the Small Town Lottery.

Rojas was asked to return to the next committee hearing with the data needed by Recto.

He also submitted to Drilon the pays and perks of the board of the PCSO but the senator did not ask any questions about them.

“This is something that the PCSO can justify as being in accordance with the ongoing practices,” Drilon explained. –EFREN L. DANAO SENIOR REPORTER AND CRIS G. ODRONIA REPORTER, Manila Times