Perks for GOCC execs to be based on size, revenues

Perks for GOCC execs to be based on size, revenues
by Lbp Lbpea on Tuesday, February 1, 2011 at 9:32am
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Posted on February 01, 2011 12:10:01 AM

Perks for GOCC execs to be based on size, revenues

SIZE AND PROFITABILITY will be used to determine compensation at state-owned firms and board members can shortly expect to see their perks slashed, officials yesterday said.


The recommendation was made by a Palace-created task force as a suspension of bonuses, allowances and incentives at government financial institutions (GFIs) and government-owned and -controlled corporations (GOCCs) ended yesterday.

"The GOCCs were categorized from ‘small’ to ‘very large’ based on their assets and annual revenue takes. It means the larger the GOCC, the bigger the allowable per diem compensation for its officials," Budget Secretary Florencio B. Abad said.

The proposals, Mr. Abad said, include the "decreasing of allowable per diem" for GOCC board members and the grant of "reasonable performance-based incentives."

GFIs such as the Social Security System (SSS), Government Service Insurance System and Land Bank of the Philippines would be particularly affected, Civil Service Commission (CSC) Chairman Francisco T. Duque III said, but could still end up with the biggest incentive packages given their "huge assets and revenues".

The "very large" category, said Mr. Duque, involves GOCCs and GFIs with "more than P100 billion in assets and higher than P10 billion in revenues," while at the other end are entities with "less than P1 billion in assets and P100 million in revenues".

Based on Commission on Audit data, the SSS had assets of P272.6 billion and a net income of P16.21 billion while Landbank had P515.6 billion in assets and P6.81 billion in net income as of 2009.

"Basically we reduced the compensation packages but not to the levels where they (GOCC board members) will be discouraged to work for the government," said Mr. Duque, a member of the Task Force on Corporate Compensation (TFCC).

"I won’t like to preempt the president since the recommendations are with him now. It is up to him if he will approve it. Otherwise, he can give it back to us for revisions," he said as he declined to provide more details.

Finance Undersecretary Jeremias N. Paul, Jr., another TFCC member, said they would be meeting with GOCC boards "to work out performance contracts".

The TFCC previously missed a Dec. 31 deadline to submit its recommendations, prompting Malacañang to extend the ban on perks -- which was ordered last September -- for another month.

The task force, composed of representatives from the Office of the President, the Budget and Finance departments, and the CSC, is expected to expand its work to cover compensation at all GFI/GOCC organizational levels.
President Benigno S. C. Aquino III has criticized GOCC/GFI officials for enjoying substantial perks while the government struggled to balance its budget. -- from a report by P. P. Magtulis


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Fernando Martizano likes this.

Alvin Buiza
ngayon mga kapatid, sa palagay nyo, yung sinasabi bang "affected" dito ay pabor sa atin or hindi???? in my opinion, we, the RnF, will benefit if ever this will be implemented...sana tama palagay ko!!!! (cross fingers) :-)
38 minutes ago · Like

Fernando Martizano
well i think its good for us we are categorized under "very large" based on assets and annual revenues, but let see the entire EO to beissued by the President.
32 minutes ago · Like

Alvin Buiza
i just hope that the EO will be signed soon, kasi me kolatilya pa si Duque na if ever di sang-ayon si PNoy, for revision pa ulit....how long will it take na naman...hhhaayyy!!!
27 minutes ago · Unlike · 1 person

Fernando Martizano
kaya nga po abangan natin ang ilalabas na EO kung pabor po sa atin we will request for its immediate implementation kung sa tingin natin di pabor saka tayo gumawa ng action para maliwanag ang mensahe na gagawin natin sa ating position paper. Malalaman naman po agad natin ang EO kung mailalabas dahil may publication requirement po iyan at ilalagay naman po iyan sa official gazette ng Malacanang.....
20 minutes ago · Unlike · 1 person

Lbp Lbpea
ang laki naman ng income ng SSS compared to its assets. I think there is something wrong with it. Yong SSS and GSIS, all of their capital sources came from the members contributions, it should not be treated as income.
18 minutes ago · Like

Salamat Sir Specialist for sharing the above blogs from your Lbp Lbpea facebook account. Sana maging favorable sa atin ang recommendation ng TFCC.

Well, let's hope for the best and please don't cease praying.

Posted on February 01, 2011 10:27:54 PM

Perks at GOCCs on hold pending new Palace order

THE GRANT of bonuses, allowances and other incentives at state-owned firms will remain suspended pending the issuance of a Palace order setting new compensation guidelines, Malacañang yesterday said.

A draft executive order (EO) is now with the Executive Secretary and will shortly be signed by President Benigno S. C. Aquino III, Presidential Spokesperson Edwin Lacierda told reporters in a briefing.

He confirmed an earlier report that size and profitability would be used to set incentives at government-owned and -controlled corporations (GOCCs), adding: "We’ll just wait for about a day or two and the EO will come out."

While the suspension of perks ordered by Mr. Aquino ended last Monday, "It’s status quo first at the moment," Mr. Lacierda said.

"Once the EO will take effect, it will govern all GOCCs," he added.

"The policy on allowance per diem and bonuses will be rationalized and it will be enforced on all GOCCs. There will be a classification on their nature and size."

The new EO will govern remuneration at 158 state-owned firms until the GOCC bill -- a legislative measure Malacañang officials said would be pushed as a priority -- is passed by Congress. -- Ana Mae G. Roa

Based on the statements of Malacañang on the draft EO, it covers compensation packages of GOCCS. In effect, this EO will repeal provisions of the respective charters of some of these GOCCs like LBP on the setting of compensation packages. If this is the case, siguradong iassail na naman constitutionality kasi wala sa authority ng presidente ang mag set/prescribe ng compensation sa public sector. Ang power to set compensation is essentially congress' in accordance with Art. IX.B, Section 5 (1987 Constitution) which states: xxx Congress shall provide for the standardization of compensation of government officials and employees, including those in government-owned or controlled corporations with original charters,"xxx. Hindi ko makita kung saan hinugot ng mga authors ng EO ang authority kung sakali!

Posted on February 01, 2011 10:27:54 PM

Perks at GOCCs on hold pending new Palace order

THE GRANT of bonuses, allowances and other incentives at state-owned firms will remain suspended pending the issuance of a Palace order setting new compensation guidelines, Malacañang yesterday said.
A draft executive order (EO) is now with the Executive Secretary and will shortly be signed by President Benigno S. C. Aquino III, Presidential Spokesperson Edwin Lacierda told reporters in a briefing.
He confirmed an earlier report that size and profitability would be used to set incentives at government-owned and -controlled corporations (GOCCs), adding: "We’ll just wait for about a day or two and the EO will come out."
While the suspension of perks ordered by Mr. Aquino ended last Monday, "It’s status quo first at the moment," Mr. Lacierda said.
"Once the EO will take effect, it will govern all GOCCs," he added.
"The policy on allowance per diem and bonuses will be rationalized and it will be enforced on all GOCCs. There will be a classification on their nature and size."
The new EO will govern remuneration at 158 state-owned firms until the GOCC bill -- a legislative measure Malacañang officials said would be pushed as a priority -- is passed by Congress. -- Ana Mae G. Roa

semaj501 wrote:

Based on the statements of Malacañang on the draft EO, it covers compensation packages of GOCCS. In effect, this EO will repeal provisions of the respective charters of some of these GOCCs like LBP on the setting of compensation packages. If this is the case, siguradong iassail na naman constitutionality kasi wala sa authority ng presidente ang mag set/prescribe ng compensation sa public sector. Ang power to set compensation is essentially congress' in accordance with Art. IX.B, Section 5 (1987 Constitution) which states: xxx Congress shall provide for the standardization of compensation of government officials and employees, including those in government-owned or controlled corporations with original charters,"xxx. Hindi ko makita kung saan hinugot ng mga authors ng EO ang authority kung sakali!

Query, Atty. James, if ever this compensation package of ours be approved after the signing of this EO, are we entitled to salary differentials??? Or the EO will dictate as to when the compensations will be implemented??? Do you think we can implement retroactivity on dates of implementing the salary package?? As we all know, we are supposed to be paid from July, 2009 up to present if ever our compensation package will be approved...We need your legal view on the matter!! Thanks & GOD BLESS!!!!

@Alvein: It is hard to speculate on the contents of the impending EO that will issued as a result of TFCC's study. The "day or two" of waiting is already over from the original target date of its issuance as mentioned by Malacañang on Feb. 01, 2011. I think they have scrutinized the provisions very carefully para hindi na naman sila malagay sa alanganin.

Nonetheless, I believe that if ever the EO will be issued, its application is prospective. Meaning, it will take effect in the future and will not retroact to the past. However, retroactive application is possible if there is a provision on the EO expressly stating its retroactive application, i.e. a provision stating that pending compenasation packages will take effect on stated date in the past.

ganun po ba??? sayang yung 1-1/2 years natin sa paghihintay na maapprove yung payplan natin, if ever...sana naman the lbpea & the management will consider that!!! thanks Atty. James and GOD BLESS!!!! Mabuhay po kayo...

semaj501 wrote:

Based on the statements of Malacañang on the draft EO, it covers compensation packages of GOCCS. In effect, this EO will repeal provisions of the respective charters of some of these GOCCs like LBP on the setting of compensation packages. If this is the case, siguradong iassail na naman constitutionality kasi wala sa authority ng presidente ang mag set/prescribe ng compensation sa public sector. Ang power to set compensation is essentially congress' in accordance with Art. IX.B, Section 5 (1987 Constitution) which states: xxx Congress shall provide for the standardization of compensation of government officials and employees, including those in government-owned or controlled corporations with original charters,"xxx. Hindi ko makita kung saan hinugot ng mga authors ng EO ang authority kung sakali!

Noong lumabas ang Joint Resolution No. 4 sometime in July 2009, binasa at pinag-aralan na ng LBPEA with Management representative kung ano ang epekto nito sa Charter ng LBP. Ang provision sa Joint Reso No. 4 na nakaapekto daw sa Charter natin ay ito daw po:

(9) Exempt Entities - XXX. Exempt entities shall be governed by their respective Compensation and Position Classification Systems: Provided; That such entities shall observe the policies, parameters, and guidelines governing position classification, salary rates, categories and rates of allowances, benefits, incentives, prescribed by the President; Provided, further, That any increase in the existing salary rates as well as the grant of new allowances, benefits and incentives, or an increase in the rates thereof shall be subject to the approval by the President, upon recommendation of the DBM: XXXX.

Yan po ang ipinaliwanag na basehan sa amin.

Kung may counter argument po tayo sa provision na yan saliksikin at pag-aralan natin, maganda po yan hindi lamang para sa LBP employees, pati rin sa ibang GOCCs and GFIs na apektado ng JR No. 4 at EO 7.

Salamat.

@lbpea_1: Please allow me to elucidate on the issue at hand!

Congressional Joint Resolution No. 4 otherwise known as Salary Standardization Law III, or SSL3 is the latest enactment governing compensation and position classification of government workers. The law, however, does not cover GOCCs that are exempt from the coverage of SSL through the provision of their respective charters as correctly cited on item (9) of said JR.

Specifically, the law is described as a “Joint Resolution authorizing the President of the Philippines to modify the Compensation and Position Classification System of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and for other purposes.” It is effective July 1, 2009 to 2013. This JR is the legal basis of the President in issuing implementing rules such as EO 900 (Implementation of the 2nd Tranche of the Modified Salary Schedule for Civilian Personnel and Base Pay Schedule for Military and Uniformed Personnel in the Gov't). Without the delegation or given authority by congress to the executive, the President has no legal power to set compensation plans as the same is exclusive for congress.

The only effect JR No. 4 has on exempt entities is claearly stated in Item (9), thus: xxx any increase in the existing salary rates as well as the grant of new allowances, benefits and incentives, or an increase in the rates thereof shall be subject to the approval by the President, upon recommendation of the DBM xxx. Hence, proposed salary increases of GOCCs exempt from SSL, like LBP's, needs the approval of the president unlike before when it is the BODs who have authority to approve the same as provided for in their respective charters .

The propriety of the subsequent issuance of EO 7 which imposes Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits Suspension of All Allowances, Bonuses and Incentives for Members of the Board of Directors is still unresolved because issues on its constitutionality i.e. derogation of legislative power and legislative encroachment, is still pending with the SC (the question was filed by a certain Atty. Galicto of Philhaeth Butuan).

These are the legal bases to support my opinion re said EO as earlier posted. Thank you for the interaction!