PRESIDENT Benigno Aquino 3rd on Thursday issued an order standardizing salaries and bonuses of executives of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs).
President Aquino signed Executive Order (EO) 24, prescribing rules to govern the compensation of members of the Board of Directors/Trustees of such companies.
The EO aims to lay out policies on compensating high-ranking officials of the GOCCs and GFIs to the level that is “reasonable, justifiable and appropriate to prevent abuses in the grant of salaries, per diems, allowances, bonuses, incentives and other benefits.”
Mr. Aquino said that board members of some government corporations granted their members “excessive salaries, per diems, allowances, bonuses, incentives and other benefits, which cause demoralization in the bureaucracy and depletion of government revenues.”
According to Executive Secretary Paquito Ochoa Jr., the order “will serve as a stop-gap measure to rein in excessive pay of GOCC boards of directors and trustees until a law is passed mandating such.”
“Consistent with the precept of public accountability, it becomes imperative for the President of the Philippines to exercise his power of control over GOCCs to rationalize the compensation of the members of their Board of Directors/Trustees,” the EO says.
The order covers board members and directors of GOCCs and GFIs whose compensation shall be subject to the President’s approval.
It also includes representatives of GOCCs in the boards of private corporations wherein they have investments.
Under the new guidelines, the nature of corporations in terms of size, strategic positioning, nature of operations and financial capability should be taken into consideration in determining a compensation system.
The maximum amount of performance-based incentives to be granted to board members or trustees should depend on the size of the GOCC and GFI, but not to exceed reasonable percentage of the board member’s actual annual per diems received.
Reimbursable expenses cover performance of official functions, such as transportation going to and from the place of meetings; travel during official trips; and communication and meals during business meetings.
According to the EO, these expenses are subject to budgeting, accounting and auditing rules and regulations.
It also directs the Board of Directors/Trustees of all chartered and non-chartered GOCCs—whether covered by the Salary Standardization Law— to comply with the policies and guidelines it sets on compensation and reimbursable expenses.
“Non-compliance with any of the provisions of this executive order shall be considered insubordination or neglect of duty and such other administrative offenses as may be warranted and shall be dealt with accordingly,” the EO states. –Cris G. Odronia, Reporter, Manila Times
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