Proposed GOCC Goverance Act 2011

Press Release
January 20, 2011
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 Osmeña 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.

Looks like our days are numbered, for sure it would trigger another "diaspora" of public sector employees.........

uh-ohhh....it seems na parang maapektuhan na naman bagong compensation plan natin nito!!! di pa naipapatupad heto't me masamang banta na naman!!!! hay naku, kelan ba nila makikita mga paghihirap nating mga landbankers!!!!

Thank you Atty. James for this vital information. Although I am quite apprehensive about this Act on the following points:

First, a Governing Commission for GOCCs will be established
which will have delegated powers of Congress to reorganize the various boards and to set new compensation schemes subject to the President;s approval.

-This would mean our charter will be partly repealed by this act specifically on the setting of compensation and other benefits which is under existing law within the authority of the Board of Directors.


Second, 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.

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.

-It is a fact that setting of compensation and benefits of those in private sector is done through collective bargaining.
-In the event that the compensation or benefits are unacceptable for GOCCs and GFIs, I wonder if collective negotiation is still possible.
-If it is then, the employees association will negotiate directly to the Governing Commission not to the management.
-Joining/forming a public union/association is a constitutional right, I don’t think the Act would curtail existing rights of the employees unions/associations.

I would appreciate it very much if Atty. James would be able to give his comment.

@Sonia: It is my opinion that once said bill will become a law, we at the lower echelon will be benefited foremost to the disadvantage of those at the top. This is so because our salary levels are low as compared with the provisions of SSL3 and those of comparable GFI/GOCCS. Framers of this pending law intend to curb the abuses of GOCCs in granting unwarranted salaries and perks to board members and officials/officers. Hence, I believe that it will work to our advantage.

In the meantime, let us push for the implementation of the pending salary increase because it may never be implemented anymore once the new law will become effective.