Aquino signs law on GOCC reforms

PRESIDENT Benigno Aquino 3rd on Monday signed into law the Government-Owned and Controlled Corporations Governance Act of 2011 that seeks to reform the operations of GOCCs by curbing the excesses in the pay and perks of its officials.

President Aquino signed Republic Act 10149 in the presence of Senate President Juan Ponce Enrile, House Speaker Feliciano Belmonte Jr. and other government and GOCC officials during a simple ceremony at the President’s Hall in Malaca˜ang.

“Walang duda na ang GOCC Governance Act ay isang makasaysayang batas na naipasa ng ating administrasyon sa loob lamang ng maikling panahon. Aayusin nito ang estruktura ng GOCCs, upang matuldukan ang pang-aabuso at pagmamalabis sa mga operasyon nito [There is no doubt that the GOCC Governance Act is one of the landmark laws passed by this administration in so short a time. Let us reform the structures of GOCCs, so we can put an end to the abuses and excesses of their operations],” the President said during his speech.

The bill covers all GOCCs, Government Instrumentalities with Corporate Powers, Government Corporate Entities and Government Financial Institutions, including their subsidiaries, but excluding the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts and research institutions.

The GOCC Governance Act also mandates the creation of Governance Commissions for GOCCs (GCG), which is authorized to evaluate the performance and determine the relevance of a GOCC, and implement the reorganization, merger or streamlining of a GOCC.

The GCG will be composed of five members to be headed by a Cabinet secretary.

It will also monitor the work efficiency and performance of GOCC personnel through an objective performance evaluation system, and the conduct of periodic assessments.

“Sa dating kalakaran, tila nakatago sa mata ng publiko ang palakad ng GOCCs at ang kanilang mekanismo sa pag-audit. Upang maging mas bukas at malinaw ang mga ito sa taumbayan, maaaring magsagawa ang GCG chairman ng isang special audit para sa alinmang GOCC para sa mga partikular na hangarin [Under the old system, it was as if the operations of GOCCs and their audit system were hidden from the public. To make those known and clear to the public, the GCG chairman can make a special audit on any GOCC for a certain purpose],” the President said.

He added that the law also requires all GOCCs to maintain a website that will be open for public viewing containing their financial statements, corporate operating budgets, summary of borrowings and other information that the GCG would require.

The law also provides that all incumbent chief executive officers and appointive members of the boards of GOCCs will have a term of office until June 30, 2011, unless sooner replaced by the President.

No political patronage

“Gagawin natin ito sa prosesong hindi paiiralin ang sistemang padrino. Ang husay, karanasan at dedikasyon sa trabaho ang magiging pangunahing pamantayan natin sa ating pagpili [We will undertake a selection process that does not advocate political patronage. The expertise, experience and dedication to work will be the primary criteria in choosing officials of GOCCs],” Mr. Aquino said.

Budget Secretary Florencio Abad said that more than 140 GOCCs would be examined by the GCG.

“Finally, governance of GOCCs is now lodged in an agency with a clear and effective mandate to pursue much-needed reforms in this sector,” Abad noted in a statement.

“The GCG will have the power to pursue the reorganization, merger, streamlining, privatization or even the abolition of agencies. It will also have the power to establish a fair and equitable compensation and position classification system for GOCCs and set compensation, per diems, allowances and bonuses of their board members,” he said.

According to the new law, any board member or officer found to have benefited from GOCC excess benefit or profit shall be subject to restitution without prejudice to any administrative, civil or criminal case.

Senator Franklin Drilon also on Monday lauded President Aquino signing into law the GOCC Governance Act of 2011.

“This will set the framework for reforms in a major sector of our economy. We are confident that we can harness GOCCs to perform effectively and efficiently to contribute to national development,” Drilon, principal author and sponsor of the measure, said in a statement.

The newly approved legislation largely tracks the President’s reform agenda and anti-corruption campaign.

In his first State of the Nation Address in 2010, Mr. Aquino exposed what he described as the scandalously high compensation equivalent to 36 months provided by the Arroyo administration to its officials at the Metropolitan Waterworks and Sewerage System despite the agency’s dismal performance in recent years.

Drilon expects the new law toa become effective 15 days after its publication or by July 1, 2011. –Cris G. Odronia, Reporter, Manila Times