E0 19 EXTENDING SUSPENSION OF PERKS

Posted by Atty. Semaj

PIA Press Release
Tuesday, January 04, 2011


Palace extends suspension of GOCC and GFI allowances

MANILA, Jan. 4 (PIA) -- Malacañang has extended the suspension of all allowances, bonuses, incentives and other perks of board of directors and trustees of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs) until January 31, 2011, according to Executive Order No. 19 signed by President Benigno Aquino III.
The suspension was extended for another month pending the issuance of policies and guidelines by the Task Force on Corporate Compensation (TFCC), which was created by Executive Order No. 7 to review all remuneration granted to board directors or trustees, officers and rank-and-file employees, as well as discretionary funds of GOCCs and GFIs.
The President signed EO No. 19 on December 30, 2010.
EO No. 19 says that “complexity of issues and number of GOCCs and GFIs” merit the “need to further review the grant of all remunerations and discretionary funds of the board members.”
Executive Secretary Paquito N. Ochoa Jr. said the TFCC had requested a one-month extension to allow it to finish its study and finalize its recommendations.
“The additional time they requested is understandable. We know that they want to come up with recommended policies and guidelines that are fair and reasonable to all those concerned, as well as cognizant of the need to balance the need for prudent government spending and the operational flexibility accorded to GOCCs and GFIs to allow them to be effective,” Ochoa said.
The Palace issued EO No. 7 last September in light of the questions surrounding the allowances and benefits given to executives and staff of GOCCs and GFIs, which generally exceed those given to government employees.
Aside from creating the TFCC and requiring GOCCs and GFIs to provide the task force with the information it requires for the review, EO No. 7 also imposes a moratorium on “increases in the rates of salaries and the grant of new increases in the rates of allowances, incentives and other benefits” of GOCC and GFI employees, except salary adjustments provided in EO Nos. 801 and 900, unless specifically authorized by the President.
The TFCC is composed of representatives from the Office of the President, the Departments of Finance and Budget and Management, the Civil Service Commission.



semaj501
Number of posts: 54
Registration date: 2010-09-15
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MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER NO. 19

EXTENDING THE SUSPENSION OF ALL ALLOWANCES, BONUSES, INCENTIVES AND OTHER PERKS TO MEMBERS OF THE BOARD OF DIRECTORS OR TRUSTEES OF GOVERNMENT-OWNED AND-CONTROLLED CORPORATIONS (GOCCs) AND GOVERNMENT FINANCIAL INSTITUTIONS (GFIs) EXCEPT REASONABLE PER DIEMS

WHEREAS, Executive Order No. 7 (s. 2010) entitled “Directing the Rationalization of the Compensation and Position Classification System in the Government-Owned and-Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs), and for Other Purposes”, created the Task Force on Corporate Compensation (TFCC) to undertake the review of all remuneration granted to members of the board of directors/trustees, officers and rank-and-file employees, as well as discretionary funds of GOCCs and GFIs;

WHEREAS, Section 10 of Executive Order No. 7 suspended the grant of allowances, bonuses, incentives and other perks to members to the board of directors/trustees of GOCCs and GFIs, except reasonable per diems, until December 31, 2010, pending the issuance of new policies and guidelines on the compensation of these board members;

WHEREAS, the TFCC is in the process of conducting a review on all remuneration granted to the members of the board of directors/trustees, officers and rank and-file employees, as well as discretionary funds of GOCCs and GFIs;

WHEREAS, considering the complexity of issues and number of GOCCs and GFIs, there is a need to further review the grant of all remunerations and discretionary funds of the board members;

NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines, by virtue of the powers vested in me by law, do hereby order and direct the extension of suspension of the grant of allowances, bonuses, incentives, and other perks to members of the board of directors/trustees of GOCCs and GFIs, except reasonable per diems, until January 31, 2011, pending the issuance of new policies and guidelines on the compensation of said directors/trustees.

This Executive Order shall take effect immediately upon publication.

DONE in the City of Manila, this 30th day of December, in the year of our Lord, Two Thousand and Ten.

(Sgd.) BENIGNO S. AQUINO III

By the President:

(Sgd.) PAQUITO N. OCHOA, JR.
Executive Secretary



semaj501
Number of posts: 54
Registration date: 2010-09-15

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A reading of this EO indicates that what is extended is the suspension of the allowances of the members of the BODs of GOCCs - from Dec. 31, 2010 to Jan. 31, 2011. Nowhere could we find any deadline set for the submission of TFCC's report of its findings. Hanging na naman ang EO!!!

To Atty. JAMES:

Do you think we are affected by this EO#19??? It is clearly stated there that only the perks & bonuses of EXECUTIVES of GOCCs are suspended....can we fight for the immediate approval of our long pending salary increase??? your legal opinion regarding this matter is badly needed....

GOOD DAY!!!

It is my understanding that this EO does not concern us Alvein. The specific subjects are the salaries/allowances of the members of the board of GOCCs. The EO is intended primarily to address Sec. 10 of EO 7 which suspended all allowances, bonuses, incentives, etc. until Dec. 31, 2010 of the BODs of GOCCs. The issuance of EO 19 is inevitable considering that the task force created by EO 7 (TFCC) failed to submit a report on its findings and recommendations to the President within the 90-day prescribed period. Those who crafted EO 7 might have a positive outlook then that the 90-day period which expired Dec. 8, 2010 will be met, hence the Dec. 31, 2010 end of the suspension period. This is not the case, however.

In any event, management may not implement the pending salary increase because "formulation and recommendation of measures to rationalize the compensation system and the use of discretionary funds in specific GOCCs and GFIs, including putting a cap on total compensation (Sec. 7.c. of EO 7), which is within the ambit of the TFCC, is not done yet.

Having said these, there are also other concerns that we have to look into in relation to the subject matter, i.e. the possibility of declaring EO 7 as unconstitutional and the enactment of the pending bill of Sen. Drilion-Senate Bill 2566 or the proposed GOCC Governance Act of 2010. We will just hope and pray that the unfolding of events will work to our advantage. Thx!

For Atty. Semaj:
In your opinion, what do you think are the effects should EO7 be declared unconstitutional?
Thanks in advance..

for the information of the body, Pres. GEP received a letter from DBM last December 2010 stating that they have studied our Pay Plan. however, they are still waiting for the, much awaited, TFCC recommendation. It seems that the target period for the approval/disapproval of our Pay Plan by the DBM depends on the finalization of the said recommendation.
With this presumption, the possibility of declaring EO 7 as unconstitutional and the enactment of the pending bill of Sen. Drilion-Senate Bill 2566 or the proposed GOCC Governance Act of 2010, as mentioned by atty. james, will be our chance for the approval our Pay Plan.

I am waiting for the answer of Ms Sonia to your query 1neb. Sorry for replying late. Should EO 7 will be declared unconstitutional, of course the personalities who will benefit foremost are the members of the Board of the GOCCs because the glory days will be back again. Allowances/perks that they received previously (before the suspension imposed by EO7) will be restored.

On the part of employees, moves to increase salaries and other benefits may be pushed through. However, there is another impediment. This is Joint Resolution No. 4 because there is a provision in it, I think under Sec. 9 on Exempt Entities, which states in essence that increases on salaries and allowances of GOCCs that are exempt under the coverage of SSL 3 by virtue of their respective charters need the recommendation of DBM and approval of the President.

Let me emphasize, however, that JR No. 4 was also included in Atty. Galicto's petition with the SC because of some perceived irregularities. If in case said EO will be declared entirely unconstitutional and JR No. 4 partly unconstitutional, we will all rejoice because the setting of compensation package of LBP employees will be back at the exclusive authority of the BODs in accordance with the provision of LBP's charter.

1neb wrote:

For Atty. Semaj:
In your opinion, what do you think are the effects should EO7 be declared unconstitutional?
Thanks in advance..

The query of 1neb was particularly addressed to you Atty Semaj. I reserved my personal view after reading your well-crafted answer which really reflected your brilliance as a lawyer.

I would not dwell on the effects of EO 7 should it be declared unconstitutional as it was well within the expertise of Atty Semaj.

My point of argument is on Joint Resolution vis-a-vis the LANDBANK charter. Both are laws but one is general and the other is special which of the two would prevail. Joint resolution is general law according to Atty. Semaj and the LANDBANK charter is a special law. A general law cannot prevail over a special law. But with the unfolding of events, it seemed that the general law prevailed over special law.

It will be best academically and financially if JR No. 4 would be partly declared unconstitutional and EO 7 entirely unconstitutional. And I quote my good friend Atty. Semaj....

semaj501 wrote:

Let me emphasize, however, that JR
No. 4 was also included in Atty. Galicto's petition with the SC because
of some perceived irregularities. If in case said EO will be declared
entirely unconstitutional and JR No. 4 partly unconstitutional, we will
all rejoice because the setting of compensation package of LBP
employees will be back at the exclusive authority of the BODs in
accordance with the provision of LBP's charter.

why do the rank and file of Land Bank suffer the consequences of the wrong doing of other GOCCs and CFIs, wherein Land Bank is totally an earning institutions. Year after year, net income of LBP is doubling, unprecedented, hence we deserve to be rewarded. We have done our part for the government, so the government must done its part to ease the long time burden of rank and file government employees such high cost of transportation fares, soaring tuition fees/other educational expenses, utilities, necessities, medicines, hospitalization, etc. etc.

Please God have mercy on us.