GOCCs defend P2.3B bonuses for employees | Inquirer News

GOCCs defend P2.3B bonuses for employees

An agency overseeing the compensation in government-owned and -controlled corporations (GOCCs) said the Commission on Audit (COA) had not issued a final notice of disallowance to 31 GOCCs that gave a total of P2.313 billion in bonuses and allowances to executives and employees in 2012.

In a report, the COA said the GOCCs paid “bonus(es) and allowances and benefits to the board of directors and employees without or in excess of legal basis or proper authority.”


The Governance Commission for GOCCs (GCG) said in a statement that the GOCCs had amply explained to the COA the bonuses and allowances.

Several GOCCs, including Philippine Health Insurance Corp. (PhilHealth), contacted by the Inquirer said the bonuses were aboveboard.


But the unauthorized bonuses prompted an opposition senator to cast doubt on the good governance platform of the Aquino administration.

Sen. Joseph Victor Ejercito, chair of the Senate committee on economic affairs, blamed the GCG for allowing the bonuses that state auditors found inappropriate.

“After all that the GOCCs went through and despite the promises made by P-Noy [President Aquino’s nickname] in his first Sona [State of the Nation Address], it turns out that the path has yet to be straightened out,” Ejercito said in a text message.

The windfall of bonuses given to GOCCs during the Arroyo presidency was one of the issues addressed by the Aquino administration shortly after it came to power in 2010.

GOCC Governance Act

A Senate inquiry into the huge 36-month compensation package at the Metropolitan Waterworks and Sewerage System during the Arroyo administration eventually led to the crafting of the GOCC Governance Act of 2011, principally authored by Sen. Franklin Drilon.

The law created the GCG that oversees the compensation of GOCC executives and employees.


“The problem is the implementation, the violation committed by authorizing the release of bonuses,” Ejercito said.

“It seems there is nothing wrong with the GOCC law. What needs to be done is how to ensure that the governance commission strictly follows the law and at the same time considers the plight of the rank-and-file employees of the GOCC,” Ejercito added.


PhilHealth president and CEO Alex Padilla said the issue raised by the COA was “a rehash of the same controversy a few months ago, which we have responded to then.”

Padilla said “these are benefits which are granted since six or seven years ago, before my time. There are no new ones.”

He explained that some of these benefits were either magna carta benefits for health workers or a collective negotiation agreement (CNA).

“The [CNA] is the counterpart of the collective bargaining agreement in the private sector. The CNA is a contract between the management and the workers which has a life span of three years. It cannot be breached, otherwise it’s a violation of the contract,” he said.

Padilla cited the PhilHealth law which, he said, allowed the agency to decide on its own the compensation of its personnel so long as it was approved by the board.

“It does not require presidential approval,” he said.

The PhilHealth official also questioned the amount the COA was asking the agency to return. “I don’t know where the P1.6 billion came from. We’re still talking here of the same amount, which is P1.4 billion.”

“That P1.4 billion was distributed to 5,900 employees. We’re actually in the lower bracket of compensation compared to other GOCCs and the private sector. I hope we put this in the right perspective. PhilHealth has been giving P1.2 billion a week in benefits to PhilHealth members,” he said.

Difference in opinion

“There is obviously a difference in the opinion of the COA and PhilHealth. This is a question of interpretation of the law. They have their own interpretation, we have our own,” he said, adding that they intend to challenge in court the findings of the COA.

“This should be settled by the court at the appropriate time,” he said.

Padilla also said that the PhilHealth board never received a single centavo in bonuses.

“PhilHealth has 17 directors, 13 of whom are from the government so they receive nothing because that would be double compensation. The four others only receive representation allowances,” he said.

COA report 4-month-old

Lawyer Paolo Salvosa, GCG spokesperson, noted that the order of the COA to refund questionable bonuses and allowances was based on a four-month-old COA report.

Acting on the report, the GCG still required the GOCCs to address COA’s “observations.”

“Nonetheless, by virtue of the PDI (Philippine Daily Inquirer) news item, all the GOCCs mentioned have been directed to submit to the GCG a concrete response and reply thereto within the next 24 hours. The GCG will be issuing within a few days the final responses of the GOCCs and the commission’s own evaluation for the guidance of the general public,” Salvosa said.

Before Aquino administration

He also noted that the amounts in the report covered various items that were already being granted without legal basis before the Aquino administration.

“As the current administration has been firm on its policy of not granting post facto approvals, many of these findings have therefore been recurring in COA reports,” he said.

Salvosa said the GCG had reviewed the COA reports and discussed the findings with the GOCCs concerned (excluding local water districts and economic zone authorities that are not within the jurisdiction of the commission).

“(E)xcept for three GOCCs, none of the other GOCCs covered in the COA report have been issued notices of disallowance,” he said.

In fact, after conferring with the COA, “no final notice of disallowance has yet been issued against the GOCCs mentioned in the report,” he said.


The management of the airport operator Mactan-Cebu International Airport Authority (MCIAA) said it was puzzled by the COA report.

Nigel Paul Villarete, general manager of MCIAA, said the performance-based bonuses that the government-run company distributed to its employees for their 2012 performance was authorized by the GCG.

“We [MCIAA] are perplexed by the report that we distributed unauthorized bonuses. The bonuses we gave out were based on the guidelines issued by the GCG,” Villarete claimed.

Authorized bonus

In fact, he said, the GCG issued the authorization for the distribution of the performance bonuses earlier this month.

Villarete said he had a copy of the authorization and was willing to show it to respond to inquiries.

He said MCIAA did not distribute other bonuses besides the performance-based bonus authorized by the GCG, the mandated 13th month pay, and the cash gift that was common for all government employees worth P5,000 each.

A media relations officer for the Development Bank of the Philippines (DBP) said the state-owned financial institution distributed bonuses to its employees using guidelines set by the GCG.

The DBP source said the bank did not want to give any further comment on the matter.

The Philippine Economic Zone Authority (Peza) also declined to comment on the issue as of press time.


At the Clark Freeport in Pampanga province, an official of Clark International Airport Corp. (CIAC) said the bonuses that the agency’s officials and employees received in 2012 were “all aboveboard.”

Victor Jose Luciano, CIAC president and chief executive officer, issued this statement in reaction to the COA order for 31 GOCCs, including the CIAC, to return P2.313 billion in bonuses and allowances.

“It is not true; all bonuses of CIAC are aboveboard, in compliance with the [requirements of the GCG],” Luciano said in a statement.

The COA report said the CIAC released P23.9 million in bonuses and other benefits to its officials and employees in 2012.

These, according to the COA, included the performance-based bonus of P4.1 million and performance enhancement incentives of P1.7 million. The GCG authorized these for that year, Luciano said.

He said the Labor Code mandated the 13th month pay while the 14th month pay was part of the agency’s employment compensation package.

Water districts, Peza

Contacted by the Inquirer, presidential spokesman Edwin Lacierda said the three GOCCs that were mentioned in the COA report but beyond the jurisdiction of GCG were Region 7 water districts, Butuan City Water District and Peza.

“The GCG law excluded local water districts and economic zone authorities,” said Lacierda, quoting GCG Commissioner Angela Ignacio.

The GCG, however, still required all GOCCs in their 2013 “performance agreements” to submit concrete and time-bound action plans for addressing COA’s observations.

This is to ascertain that “the fitness of the members of the governing boards may already be evaluated pending the evaluation by the COA and the courts on whether a notice of disallowance should be issued,” Salvosa said.—With a report from Tonette Orejas, Inquirer Central Luzon




Return bonuses, gov’t execs told

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