GOCC Governance Act

BECAUSE of the greed and insensitivity of many of the lucky few Filipinos who have been made officers and board members of government owned and controlled corporations (GOCCs), the public pressured their lawmakers to pass a law to prevent GOCCs from being made a milking cow by their officials.

These GOCC officers not only leveraged their positions to enrich themselves by misusing the funds under their control. They also gave themselves astronomical salaries and allowances. And this they did even in corporations that were supposed to be losing money and depended on infusions of cash from the national treasury.

On Monday, President Benigno Aquino 3rd signed the GOCC Governance Act of 2011. The bill is a historical landmark, it is the first time the power of the GOCCs’ directors and managers is being curtailed. It is also a milestone for the Aquino administration. We are told by the Malacañang press office that the President personally considers this law as the first important legislation to be enacted under his administration.

The bill provides for the rationalization of salaries and benefits of officials and employees of GOCCs. In the early months of his presidency, the President indicated his displeasure at the way these GOCCs were being run, some of them not even fulfilling the mission they were created for. He was displeased even with some of them that successfully enough rendered the services that are their reasons for being and making a profit while so doing. But he was contemptuous of nearly all of them because their directors, chairmen, presidents and managers paid themselves salaries and allowances even surpassing those for officials of similar private sector corporations.

These GOCC officials merrily enjoy their salaries and self-endowed perks and allowances as if they were not aware that more than 50 percent of the Filipinos are sliving below the poverty line or just barely keeping their noses above it.

The Palace announcement of the signing of the new law says the way the GOCCs are being governed and their governors’ “bloated compensations,” contribute “to a culture of political transactionalism.” For these GOCC officials have come to consider their positions — to which they were appointed by the former Philippine president — “as mere political currency,” granted on the basis of expediency and the appointees’ closeness to the president or to Cabinet members. The appointments, the Palace announcement says, were rarely based on character, virtues and competence.

It is hoped that this new law will lead to wide-ranging reforms in government corporations.

Mechanism against GOCC abuse

Justice Secretary Leila de Lima praised the GOCC Governance Act of 2011 as something that would help President Aquino and his team carry out the anti-corruption campaign and prevent abuses in the GOCCs.

The law establishes a “mechanism” by which the Filipino people can be assured that the funds held by the GOCCs are known to the public and the use of these funds is “adequately monitored.”

It creates a Governance Commission for GOCC (GCG) that will supervise the 157 government corporations. The GCG will have five members each with Cabinet rank. It is tasked with reviewing the charter and performance of each of the GOCCs. After the review, the GCG has the power to recommend to the President the abolition or privatization of a GOCC.

“(This law) demands more accountability from GOCCs and puts in place measures to curb abuses of their officials,” said Secretary de Lima in her statement. “GOCCs will no longer be able to operate like independent fiefdoms or ‘governments’ with their own set of rules.”

But not all are pleased with the new law.

Unconstitutional provisions

Members of the House minority, led by their leader, Albay Rep. Edcel Lagman, are getting ready to challenge at the Supreme Court provisions of the Act that they think are unconstitutional.

Mr. Lagman and Quezon province’s Rep. Danilo Suarez, who is the House’s deputy minority leader, find specially the new law’s setting June 30 for the termination of employment of career service officers in GOCCs as a provision that is of doubtful constitutional validity.

These two congressmen were participants in the bicameral conference meetings to complete the enactment of the law. At the bicam meetings they raised constitutional issues. But they majority outvoted them.

Rep. Lagman rightly contends that under the Constitution and the Civil Service Code government employees cannot be removed except for cause, which means committing wrongdoings, proving to be incompetent or neglectful, etc. The Albay congressman is right that passage of a law is not “a cause” that allows a career civil servant to be removed.

Congressman Suarez questions the absence in the law of a provision cutting the present salaries and allowances of GOCC officials. Why is this provision absent, if the excessiveness of the salaries of GOCC officers is supposed to be the main intention of the law?

Trimming the salaries would of course have to be done by the GOCC officers themselves, because they know what the situation their corporations are in. No general rule can be made applicable to all GOCCs.

What they see as defects in the law are there, Messrs. Lagman and Suarez think, because the purpose of the law is not at all as noble as the ruling party makes it out to be. The two congressmen then offer their suspicion that the GOCCs are being purged of their present officers — who were placed their by the Arroyo administration — so that the Palace can replace them with political allies.

We don’t quite agree. But the public must vigilantly watch how GOCCs will be handled from now on. –Manila Times