No more fat bonuses, allowances to GOCCs heads seen

The proposed law effectively clipping President Aquino’s authority in granting excessive bonuses and allowances to government-owned and controlled corporations (GOCC) executives is seen to be approved by the Senate soon.

Officials from the Executive Branch stood amenable to that bill and even insisted on placing under the Departments of Finance (DoF) and Budget and Management (DBM) the control of the proposed board that will rationalize the compensation and perks of GOCC officials, Sen. Franklin Drilon said yesterday.

The GOCCs account for one-third of the national expenditures for salaries and maintenance and other operating expenses and have not been dutifully submitted to DBM for review.

Drilon, who presided over the hearing on Senate bill No. 2566 or the proposed GOCC Governance Act which he incidentally authored, told reporters that the a committee report will be presented in the plenary soon as the Executive does not stand opposed to the measure.

There were, however, a number of amendments in the provisions of the bill, the principal features of which is the creation of a governing council that will reorganize the various boards and set the compensation package for the board of directors in various GOCCs, proposed by DoF Sec. Cesar Purisima as well as other resource persons that included DBM Sec. Florencio Abad, Civil Service Commission (CSC) Chairman Dr. Francisco Duque and Deputy Government Corporate Counsel Elpidio Vega.

“They have all favorably endorsed the enactment of the bill. There is no opposition. There are proposed amendments as for example the structure of the GOCC Governance Council, which we proposed to create in the bill. There are proposed amendments that it should be under the DoF rather than under the Office of the President. There are proposed amendments to the structure of the council which we will adopt.

“There are a number of amendments submitted and the committee will now go through it and the committee is inclined to accept them. We will include some of these amendments in the committee report. We are confident that with the bill, once it becomes a law, the abuses that we saw on the part of the GOCCs will no longer be possible,” Drilon said in briefing to reporters after the hearing.

Purisima, in explaining their position on the matter, said the proposed Governance Council for GOCC should be attached to the DoF “since it has the mandate of ensuring that the overall fiscal resources of government is properly managed.”

“We view DoF’s role as the chief financial officer of the country which includes the overall fiscal management of the government corporate sector.

“We respectfully suggest that the council be chaired by the secretary of finance in view of its mandate to judiciously manage the country’s financial resources,” he said, adding that the DOF should also have a say on contracts that GOCC would enter into.

For his part, Abad said he welcome that creation of the GCG to supervise the GOCCs but stressed that it should not be under the OP.

Abad said he supports the position of the DOF that the envisioned GCG be put under the finance department as an attached agency.

“Attach the GCG to the Department of Finance, for the latter’s competencies and functions allow it to better provide leadership to the GCG,” the DBM chief said.

But Abad further said that DOF should be named as GCG chairman, while the DBM head be appointed as “alternate” chairman.

Among the purposes of the bill is the improvement of corporate governance in GOCC’s by setting a just and equitable compensation system at reasonable levels that takes into account the results of operations of GOCC’s and offers enough incentives to attract the best talents to manage these enterprises; introduce a transparent process for the selection of board members that ensures qualifications and expertise; create a more effective oversight mechanism through the GOCC Council for Governance (GCG); and introduce a performance evaluation system to help assess and evaluate the effectiveness and efficiency of GOCC’s, enabling the GCG to make recommendations, when necessary, for their reorganization, streamlining, merger, abolition or privatization.

These recommendations will be submitted to the President, who shall be vested with the delegated authority based on a set of reasonable standards, to undertake the reorganization of the GOCC’s.

“The days when the 157 boards can act independently of the national government is over, once we have this bill passed into law. We are confident that we would be able to have this measure passed in the Senate, and we will work on its passage in the House of Representatives.

“We will now submit a committee report and we will incorporate the amendments suggested by the different resource persons. The next step is that we will be ready to sponsor it on the floor,” said Drilon.

The Senate measure was an off-shoot of Senate Resolution 66 which investigated the fat paychecks and other perks enjoyed by GOCC heads. –Angie M. Rosales, Daily Tribune