SIGNIFICANT LAWS AFFECTING OUR COMPENSATION

RA 10149 GOCC Act of 2011
An act to promote financial viability and fiscal discipline of GOCC
July 2011

CHAPTER II
The Governance Commission for Government-Owned or -Controlled Corporations (GCG)

SEC. 5. Creation of the Governance Commission for Government-Owned or -Controlled Corporations.—There is hereby created a central advisory, monitoring, and oversight body with authority- to formulate, implement and coordinate policies to be known as the Governance Commission for Government-Owned or -Controlled Corporations, hereinafter referred to as the GCG, which shall be attached to the Office of the President.
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Upon determination by the GCG that it is to the best interest of the State that a GOCC should be reorganized, merged, streamlined, abolished or privatized, it shall:
(i) Implement the reorganization, merger or streamlining of the GOCC, unless otherwise directed by the President; or
(ii) Recommend to the President the abolition or privatization of the GOCC, and upon the approval of the President, implement such abolition or privatization, unless the President designates another agency to implement such abolition or privatization.
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(b) Classify GOCCs into: 

(1) Developmental/Social Corporations; 

(2) Proprietary Commercial Corporations; 

(3) Government Financial, Investment and Trust Institutions; 

(4) Corporations with Regulatory Functions; and 

(5) Others as may be classified by the GCG, without prejudice to further sub classifications in each category and/or any other classification based on parameters as it may find relevant or . material such as, but not limited to, industry type. The classification shall guide the GCG in exercising its powers and functions as provided herein;
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(d) Without prejudice to the filing of administrative and criminal charges, recommend to the Board of Directors or Trustees the suspension of any member of the Board of Directors or Trustees who participated by commission or omission in the approval of the act giving rise to the violation or noncompliance with the ownership manual for a period depending on the nature and extent of damage caused, during which period the director or trustee shall not be entitled to any emolument;
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(h) Conduct compensation studies, develop and recommend to the President a competitive compensation and remuneration system which shall attract and retain talent, at the same time allowing the GOCC to be financially sound and sustainable;
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CHAPTER III
COMPENSATION AND POSITION CLASSIFICATION SYSTEM FOR GOCCS
SEC. 8. Coverage of the Compensation and Position Classification System.—The GCG, after conducting a compensation study, shall develop a Compensation and Position Classification System which shall apply to all officers and employees of the GOCCs whether under the Salary Standardization Law or exempt therefrom and shall consist of classes of positions grouped into such categories as the GCG may determine, subject to approval of the President.
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SEC. 10. Additional Incentives.—The GCG may recommend to the President, incentives for certain position titles in consideration of the good performance of the GOCC: Provided, That no incentives shall be granted unless the GOCC has fully paid all taxes for which it is liable, and the GOCC has declared and paid all the dividends required to be paid under its charter or any other laws.

SEC. 11. Non-diminution of Salaries.—The Compensation and Position Classification System to be developed and recommended by the GCG and as approved by the President shall apply to all positions, on full or part-time basis, now existing or hereafter created in the GOCC: Provided, That in no case shall there be any diminution in the authorized salaries as of December 31, 2010 of incumbent employees of GOCCs, including those exempt under Republic Act No. 6758, as amended, upon the implementation of the Compensation and Position Classification System for GOCCs.

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EXECUTIVE ORDER NO. 7
September 8, 2010

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 PUPOSES

NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines, by virtue of the powers vested in me by the Constitution, Presidential Decree No. 985, Presidential Decree No. 1597, R.A. No. 6758, as amended by the J.R. Nos. 1, s. 1994, and 4, s. 2009, do hereby order and direct:

SECTION 1. Rationalization of the Compensation and Position Classification System in GOCCs and GFIs. — The compensation and position classification system in all GOCCs and GFIs shall be rationalized in accordance with the policies, principles and parameters prescribed in this Order.

SECTION 2. Guiding Principles. — The following principles, patterned after the governing principles in J.R. No. 4, s. 2009, shall guide the rationalization of the compensation and position classification system in GOCCs and GFIs:
a. All government personnel shall be paid just and equitable compensation in accordance with the principle of equal pay for work of equal value.
b. The compensation for government personnel shall generally be comparable with those in the private sector doing comparable work in order to attract, retain and motivate a corps of competent civil servants.
c. The compensation for government personnel shall be standardized and rationalized to create an enabling environment that will promote social justice, integrity, efficiency, productivity, accountability and excellence in the civil service.
d. A performance-based incentive scheme which integrates personnel and organizational performance shall be established to reward exemplary servants and well-performing institutions.
e. A periodic review of the compensation and position classification system shall be conducted taking into account the changes in skills and competency requirements and the possible erosion in the purchasing power due to inflation, and other factors.
f. The compensation for government personnel shall be kept fair and reasonable in recognition of fiscal realities and personal services cost shall be maintained at a reasonable proportion of over-all expenditures.

SECTION 3. Total Compensation Framework. – All remuneration granted to members of the board of directors/trustees, officers and rank-and-file employees of GOCCs and GFIs shall be categorized in accordance with the Total Compensation Framework established under Item (4) of J.R. No. 4. Under this framework, total payment for services rendered by personnel shall be limited to the following categories:
a. Basic Salaries, including Step Increments;
b. Standard Allowances and Benefits which are given to all employees across agencies;
c. Specific-Purpose Allowances and Benefits which are given under specific conditions, based on actual performance of work; and,
d. Incentives, which are rewards for loyalty to government service and for exceeding performance targets.

SECTION 5. Rationalization of Indirect Compensation Excluded from the Total Compensation Framework. – Provident Fund benefits, additional health insurance, and other benefits that are indirect compensation and are excluded from the Total Compensation Framework, shall likewise be rationalized in accordance with the policies to be issued by the President upon recommendation of the Task Force created in Section 7 hereof.
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SECTION 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. – Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby imposed until specifically authorized by the President.
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Executive Order 80
DIRECTING THE ADOPTION OF A PERFORMANCE-BASED INCENTIVE SYSTEM FOR GOVERNMENT EMPLOYEES
July 20, 2012

NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines, by virtue of the powers vested in me by the Constitution and applicable laws, do hereby order:

SECTION 1. Adoption of a PBI System. A PBI system consisting of the Productivity Enhancement Incentive (PEI) and the Performance-Based Bonus (PBB) shall be adopted in the national government beginning Fiscal Year (FY) 2012.
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SECTION 4. Prohibition against the Grant of New and Additional Increases in the Rates of Existing incentives and Bonuses. The grant of allowances, incentives and bonuses other than those authorized under SSL III and any increase in the existing and authorized rates therefor, other than what is provided for in this EO, shall not be allowed.

Government agencies, including Government–Owned or –Controlled Corporations (GOCCs), with existing authorized performance-based incentive or bonus systems shall harmonize the same with the PBB scheme.
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SECTION 7. Applicability to GOCCs under the Jurisdiction of GCG. The Governance Commission on GOCCs (GCG) is encouraged to adopt the policies and principles contained in this EO and issue the necessary guidelines for GOCCs under its jurisdiction, pending the formal implementation of the Compensation and Position Classification System (CPCS) for GOCCS as mandated under RA 10149.
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