Meco excluded from GOCC coverage

Published by rudy Date posted on May 26, 2011

The Manila Economic and Cultural Office (Meco), the country’s de facto embassy office in Taiwan, will not be covered by the proposed law overseeing supervision of government-owned and -controlled corporations (GOCCs) due to possible diplomatic and political repercussions.

Sen. Franklin Drilon, proponent and sponsor of the proposed GOCC Governance Act of 2011, yesterday said this was the subject of the deliberations of the bicameral conference committee on the disagreeing provisions of Senate Bill 2640 and House Bill 4067, a major amendment in the said measure.

The lawmaker, however, warned Meco

officials, specially those found to be receiving hefty compensations that if they will not turn over to the national coffers their excess funds, “I will file a case for malversation of public funds (charges).”

“I warn the board and the officers of Meco, while you have excluded yourselves from this measure because of the political and diplomatic implications of considering Meco as GOCC, it doesn’t mean that Congress will be remiss in its duty to our people to monitor your operations particularly your use of public funds,” he told a press conference.

Meco, organized under the Corporation Code as a private corporation, was among the GOCCs investigated by the Senate last year allegedly providing government officials with huge salaries and exorbitant allowances and other perks.

“It has taken its status very seriously so that they have not been audited by CoA (Commission on Audit), notwithstanding the fact that they have been collecting public funds. The excess of the funds are not turned over to the National Treasury but I think to the President’s Social Fund. They set their own terms of compensation including a very generous retirement plan to the board of directors, where after attending 24 board meetings in Taiwan, they can retire at P600,000 per year of service. All of these prompted the committee and the authors of this measure and the bicam to agree that Meco should be subjected to stricter rules of governance as outlined in this measure,” Drilon, also the Senate finance committee chairman, said.

“But the Secretary of Foreign Affairs has made a representation to us that this could have political and diplomatic implications. Notwithstanding my previous agreement with the board, Chairman Amadeo Perez has apparently changed his mind. We do not want to have this bill snagged because of that one issue and therefore we have agreed to the exclusion of Meco.

“We expect the measure to be ratified either today or by Monday in the House and in the Senate and we expect the President to sign it afterwards as this is one of the priority measures enumerated in the Ledac. We hope that this is now the start of the reform in the government corporate sector,” he said.

In a letter addressed to Cavite Rep. Joseph Emilio Abaya, chairman of the House committee on appropriations and a member of the bicameral panel, Foreign Affairs Secretary Albert del Rosario said Meco’s creation as a private non-stock corporation was one of the pre-conditions when Philippines established diplomatic ties with the People’s Republic of China and agreed to a one-China policy.

Members of the House minority bloc, however, vowed to take the “unconstitutional” measure to the Supreme Court (SC) should the bill be enacted into law.

House Minority Leader and Albay Rep. Edcel Lagman, during a press briefing, also yesterday revealed that with the members of the bicameral committee refusing to acknowledge the unconstitutionality of the GOCC Bill, they will be compelled to question it before the high tribunal.

“The Aquino administration’s priority bill known as the ‘GOCC Governance Act of 2011’ which is House Bill 4067 and Senate Bill 2640, entitled ‘An Act to Promote Financial Viability and Fiscal Discipline in Government-Owned or Controlled Corporations and to Strengthen the Role of the State in its Governance and Management to Make Them More Responsive to the Needs of Public Interest and For Other Purposes’ is constitutionally infirm and cannot measure up to the scrutiny of the Supreme Court,” Lagman stressed.

“The reconciled bill which was taken up by the bicameral conference committee which was reconvened today (Wednesday) contains provisions which violate the security of tenure of GOCC officials and abdicate the inherent power of the Congress to reorganize government agencies and entities,” he added.

Lagman noted that the bill contains provisions which pre-terminates the terms of office of GOCCs officials which are chartered by special law and guaranteed fixed terms by providing that “all incumbent CEOs and appointive members of the board of GOCCs shall, upon approval of this act, have a term of office until June 30, 2011.”

“This is repugnant to the security of tenure of GOCC officers under Section 2(3) of Article IX of the Constitution which provides that ‘No officer or employee of the civil service shall be removed or suspended except for cause provided by law,’” he said.

“Under Section 2(1) of the same Article,’The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or -controlled corporations with original charters,” Lagman said as he stressed that the term or tenure or GOCC officials cannot be pre-terminated by legislative fiat without any valid cause and without due process.

For his part, Quezon Rep. Danilo Suarez said the bill also creates a superbody to be known as the Governance Commission for Government-Owned or -Controlled Corporations (GCG) which is attached to the Office of the President which shall exercise monitoring and oversight powers over GOCCs, among other functions.

The GCG has been empowered to recommend for the President’s sole approval the abolition of GOCCs chartered under special law in derogation of the power of Congress to create and abolish government offices.

With the GOCCs numbering around 157, Suarez said it would be virtually impossible for the five-man GCG to monitor all the GOCCs.

“Last year, President Aquino issued an executive order declaring vacant some 3,000 government positions. Up to now, they have to be filled. Now, they want a five-man committee to monitor 157 corporations with thousands of employees. That is virtually impossible,” Suarez stressed.

“Originally, the concept of this body is to monitor and control the so-called excessive salaries and allowances of the GOCC officers. Up to now, they haven’t reduced their salaries. Maybe they just want to pre-terminate the terms of offices of the GOCC officers so they could replace them with their own men who have lost in the last election considering the one year ban in appointing losing candidates had already lapsed,” Suarez said.

Lagman further said that a law which creates a government office or GOCC can only be amended or repealed by an act of Congress, not by mere executive fiat.

He also noted that the GCG also duplicates and supplants the jurisdiction of the Civil Service Commission, a constitutional body which is the central personnel agency of the government which is empowered under the Constitution to “establish a career service and adopt measures to promote morale, efficiency, integrity, responsiveness, progressiveness and courtesy in the civil service” as well as to “strengthen the merit and reward system, integrate all human resources development programs for all levels and ranks and institutionalize a management climate conducive to public accountability.”

Moreover, according to Lagman, the GCG is also empowered to fix the salaries, emoluments and allowances of GOCC officials and employees contrary to the provision of Section 5 of Article IX wherein it shall be Congress which shall “provide for the standardization of compensation of government officials and employees, including those in government-owned and -controlled corporations with original charters.” –Angie M. Rosales, Charlie V. Manalo, Daily Tribune

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