20 January 2011

PRESS RELEASE: SENATE MOVING TO OKAY BILL REGULATING GOCCs

The Senate has been asked to approve a new proposed legislation seeking to end the
reported abuses in government-owned or controlled corporations (GOCCs),
advancing one of President Benigno Aquino III’s key policies in reforming and
rationalizing the operations of state enterprises.

This as the Senate Finance Committee chaired by Senator Franklin Drilon filed a
committee report Tuesday to set-up a wide ranging reform plan for GOCCs.

The committee report was signed by Drilon, Senate President Pro-Tempore Jinggoy
Estrada, Majority Leader Vicente Sotto III, Minority Leader Alan Peter Cayetano,
Senators Ralph Recto, Teofisto Guingona III, Edgardo Angara, Gregorio Honasan II,
Loren Legarda, Francis Escudero, Ramon “Bong” Revilla Jr., Manuel “Lito” Lapid,
Manuel Villar, Ferdinand Marcos Jr., Sergio Osmeñ a III, Pia Cayetano, Francis
Pangilinan and Juan Miguel Zubiri.

Under Senate Bill 2640 or the GOCC Governance Act of 2011 sponsored by Drilon,
new reasonable compensation packages for directors, trustees and employees of
GOCCs will be established. The Governing Commission for GOCCs, which will be
created under the proposal, will have the delegated powers of Congress to
reorganize the various boards and to set new compensation schemes for the
directors and employees, subject to the President’s approval.

“This reform measure is a timely response to widespread criticism over the abuse of
public funds by the directors, trustees and even employees of state-owned firms.
This landmark legislation is part of our broader effort to put an end to the bleeding
of government coffers,” Drilon noted.
 

The Senate is expected to tackle the measure, with Drilon eyeing its sponsorship in
plenary next week.

All GOCC personnel shall be paid just and equitable wages, and generally
comparable with those is the private sector, in accordance with the principle of
equal pay for work of equal value. Differences in pay shall be based on verifiable
Compensation and Position Classification factors in regard to the financial capacity
of the government.

No GOCC shall be exempt from the coverage of the new compensation system to be
developed by the commission under the proposed legislation.

The monitoring body may also recommend, subject to the President’s approval,
additional allowances for certain position titles, giving due consideration to the
necessity for such allowances and the good performance of the state enterprise.

The bill’s approval in the administration-dominated Senate would highlight the

widespread public frustration with the way state-owned enterprises operate,
particularly in granting the members of the governing boards and some officials
excessive allowances and bonuses despite the government’s tight fiscal position,
said Drilon.

State companies came under scrutiny by Drilon’s committee, which also exposed
officials of troubled government firms receiving unwarranted salaries and perks,
particularly the Metropolitan Waterworks and Sewerage System when it operated
on a negative revenue base but managed to grant generous perks to its employees.

 
President Aquino indicated that the Drilon bill has been discussed with the Cabinet
Tuesday as one of the administration’s priorities, ramping up support for the
measure.

Earlier, Drilon said that after floor debates on the bill, the chamber will ask
President Aquino to certify the bill as an urgent administration measure to pave the
way for its swift approval.