Top officials in 157 state firms to get axe

ALL government-appointed chief executives, board members and trustees in 157 state companies will lose their jobs on June 30, and those without replacements will continue only in a hold-over capacity under a law that President Benigno Aquino III will sign today.

The Government-Owned and Controlled Corporation Governance Act sets a one-year term for all appointed executives of state corporations and prevents board members from awarding themselves fat allowances and bonuses.

Deputy presidential spokeswoman Abigail Valte on Sunday confirmed that the measure will be the first to be passed into law as part of the administration’s reform agenda, and that it is aimed at curtailing abuses and stopping irregularities in cash-rich state companies.

The measure seeks to rationalize the perks of executives in state-owned companies, and it’s in line with the administration’s anti-corruption campaign, Valte says.

“The bill’s enactment into law is not just part of the policy of the Aquino administration, but a matter that has to be executed by law,” Valte said over Radyo ng Bayan.

Mr. Aquino had earlier identified the bill as one of the 23 priority measures he presented during the Legislative-Executive Development Advisory Council. The bill was authored by Senator Franklin Drilon and Cavite Rep. Emilio Abaya.

The new law freezes the salaries of incumbent Palace appointees to their Dec. 30, 2010 levels to prevent midnight salary increases.

That provision is widely seen as a reaction to the Manila Waterworks and Sewerage System whose board gave its members 36 months of bonuses.

Still, the rank-and-file employees of state companies will not be affected by the salary freeze.

The law calls for the creation of a Governance Commission, a super body that will have the power to override the corporate charters of each state-owned company to close the built-in loopholes that may be exploited by chief executives, presidents and directors.

Earlier, the opposition bloc in the House of Representatives led by Albay Rep. Edcel Lagman vowed to question the law before the Supreme Court, saying some of its provisions violated the Constitution.

Lagman said the inherent power to reorganize any body belonged to Congress.

A state-owned corporation or a chartered body created by special law may only be abolished by law and by an act of Congress, and not by the Executive, he said. –Maricel Cruz, Manila Standard Today