Perks for GOCC execs to be based on size, revenues

SIZE AND PROFITABILITY will be used to determine compensation at state-owned firms and board members can shortly expect to see their perks slashed, officials yesterday said.

The recommendation was made by a Palace-created task force as a suspension of bonuses, allowances and incentives at government financial institutions (GFIs) and government-owned and -controlled corporations (GOCCs) ended yesterday.

“The GOCCs were categorized from ‘small’ to ‘very large’ based on their assets and annual revenue takes. It means the larger the GOCC, the bigger the allowable per diem compensation for its officials,” Budget Secretary Florencio B. Abad said.

The proposals, Mr. Abad said, include the “decreasing of allowable per diem” for GOCC board members and the grant of “reasonable performance-based incentives.”

GFIs such as the Social Security System (SSS), Government Service Insurance System and Land Bank of the Philippines would be particularly affected, Civil Service Commission (CSC) Chairman Francisco T. Duque III said, but could still end up with the biggest incentive packages given their “huge assets and revenues”.

The “very large” category, said Mr. Duque, involves GOCCs and GFIs with “more than P100 billion in assets and higher than P10 billion in revenues,” while at the other end are entities with “less than P1 billion in assets and P100 million in revenues”.

Based on Commission on Audit data, the SSS had assets of P272.6 billion and a net income of P16.21 billion while Landbank had P515.6 billion in assets and P6.81 billion in net income as of 2009.

“Basically we reduced the compensation packages but not to the levels where they (GOCC board members) will be discouraged to work for the government,” said Mr. Duque, a member of the Task Force on Corporate Compensation (TFCC).

“I won’t like to preempt the president since the recommendations are with him now. It is up to him if he will approve it. Otherwise, he can give it back to us for revisions,” he said as he declined to provide more details.

Finance Undersecretary Jeremias N. Paul, Jr., another TFCC member, said they would be meeting with GOCC boards “to work out performance contracts”.

The TFCC previously missed a Dec. 31 deadline to submit its recommendations, prompting Malacañang to extend the ban on perks — which was ordered last September — for another month.

The task force, composed of representatives from the Office of the President, the Budget and Finance departments, and the CSC, is expected to expand its work to cover compensation at all GFI/GOCC organizational levels.

President Benigno S. C. Aquino III has criticized GOCC/GFI officials for enjoying substantial perks while the government struggled to balance its budget. — from a report by P. P. Magtulis, Businessworld