President Benigno Aquino III signed a law on Monday creating a Governance Commission for government owned- and controlled corporations (GOCCs) which should put a stop to the multimillion-peso bonuses and extravagant benefits top executives and board members of these corporations give themselves.
The GOCC Governance Act, or Republic Act No. 10149, ends the terms of all GOCC executives on June 30 and gives the commission, attached to the Office of the President, a free hand to review and reorganize the corporations, as well as fix the salaries, allowances, per diems and bonuses of its board members.
It also prohibits GOCC executives from receiving any personal benefits—including but not limited to shares in corporations where the GOCC has an interest. Such benefits would be subject to restitution “without prejudice to any administrative, civil or criminal action,” the new law states.
The law comes almost a year after the Aquino administration uncovered the exorbitant bonuses and other extravagant benefits executives and board members of state firms had been giving themselves.
Stop abuses and excesses
“This will fix the structure of our GOCCs to stop the abuses and excesses in their operations,” Mr. Aquino said in a speech after he signed the law in Malacañang.
Justice Secretary Leila de Lima on Monday welcomed the enactment of the GOCC reform act, saying “GOCCs will no longer be able to operate like independent fiefdoms or governments with their own set of rules.”
According to the justice secretary, the exposès on how GOCC officials were milking their agencies with “scandalously excessive salaries” only showed the vulnerability of the GOCC system to such abuse.
Leaders of Congress attended the signing. They included Senate President Juan Ponce Enrile, Speaker Feliciano Belmonte, Senate and House majority leaders Sen. Vicente Sotto III and Mandaluyong Rep. Neptali Gonzales II, respectively, and law authors Sen. Franklin Drilon and Cavite Rep. Joseph Abaya.
“The Governance Commission for GOCCs (GCG) will have the power to pursue the reorganization, merger, streamlining, privatization and even the abolition of the agencies,” Budget Secretary Florencio Abad said.
Abad said the President, through the GCG, will have a free hand in reviewing the current roster of GOCC appointive board members and chief executive officers for retention or replacement with more qualified and reform-oriented persons.
The RA also provides that the term of office of all incumbent chief executive officers and appointive members of the boards will end by June 30 unless the President replaces them sooner. They shall, however, remain in office until the President appoints their successors.
Also, the tenure of the officers that will be appointed to these GOCCs will no longer exceed one year,” Mr. Aquino said.
“This way, all the directors and executives will be pushed to work well and immediately show their skills. The leaders of the GOCCs will be given equal opportunities to prove themselves,” he added.
The President said the appointment of new GOCC executives “will be done without the system of patronage.”
The law covers all GOCCs but excluded the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authorities and research institutions.
Tax evasion charges
Late last year, the Bureau of Internal Revenue said it would file tax evasion charges against former Social Security System (SSS) officials Romulo Neri and Thelmo Cunanan who had earned millions of pesos from stock options, allowances and other perks as executives of the state-run pension fund for workers in the private sector.
The BIR said Neri earned a total taxable income of P11.3 million in 2008 and P34.2 million in 2009 as SSS president and nominee to the board of directors of Philex Mining Corp. and Union Bank of the Philippines.
Cunanan has since passed away.