The Senate and the House of Representatives on Wednesday approved a Malacañang priority legislation, the proposed government-owned and controlled corporation governance act, which sets a one-year term for all-appointive executives of state corporations and prevent GOCC board members from awarding themselves with fat allowances and bonuses.
Senator Franklin Drilon, chairman of the Senate committee on GOCC, said the bill was the first in the administration’s reform agenda to be approved curtailing abuses and stopping irregularities in these cash-rich companies.
In a bicameral session, both chambers of Congress approved the measure, which is expected to be ratified in time for President Aquino’s first state of the nation address in July.
Rep. Joseph Abaya, Drilon’s counterpart in the House of Representatives, said the bill will immediately terminate all government appointments to 157 state firms on June 20, 2011 and will place all those without replacements on “hold-over” capacity.
Abaya said the bill will also freeze the salary levels of the incumbent Palace appointments to the December 30, 2010 level to prevent mid-night salary increases as experienced in the case of the Manila Water and Sewage System where the board of directors allotted for themselves 36 months of bonuses.
“I want to emphasize that a policy has been made to rectify whatever wrong has been done,” Abaya said.
Abaya added a performance based salary matrix will be formulated among the appointed executives that will be implemented as a standard to all GOCCs and GFIs. He clarified, however, that rank and file employees of state firms will not be affected by the new salary scheme.
Drilon said the bill will create a give-man governing body, the Governance Commission, to oversee the GOCCs which will be headed by a chairman and 2 commissioners which will be appointed by the president joined by ex-officio members represented by the secretaries of Budget and Management, and Finance.
The proposed commission will have its initial budget coming from the President’s contingent fund and subsequently from the General Appropriations Act.
Abaya said the commission will have the power to over ride corporate charters of each GOCC to arrest built-in loopholes which get xploited by chief executive officers, presidents and directors of GOCCs.
Drilon said the bill will also check on GOCCs which are not retaining income and not remitting to the government that has ballooned to billions of pesos.
The proposed law requires 50% of the net earnings to be remitted as dividends. They must justify why they are not declaring dividends out of those billions in retained earnings. –Rey T. Salita, Manila Standard Today
