Newly formed GCG can abolish non-performing state firms, says Budget chief

MANILA, Philippines—(UPDATE) The newly formed Governance Commission on GOCCs (government owned and controlled corporations) has the power to abolish non-performing state firms, Budget Secretary Florencio Abad said on Monday.

Also with the GCG, Abad said President Aquino will have a free hand to review the current board members and CEOs for retention or replacement.

Abad made the remark after the President signed the GOCC Reform Act of 2011, which among others created the commission, on Monday in Malacañang.

“Finally, governance of GOCCs is now lodged in an agency with a clear mandate,” Abad said.

“The GCG will have the power to pursue the reorganization, merger, streamlining, privatization, or even abolition of agencies,” Abad added.

Under the GOCC Reform Act of 2011 all GOCCs shall be covered by a compensation and position classification system to be developed by a Governance Commission on GOCCs.

The law prescribes limits to the compensation, per diems, allowances and incentives of the members of the board of trustees.

It also stated that the terms of all incumbent CEOs and appointive members of the boards of GOCCs will end by June 30 unless they are sooner replaced by the President.

All GOCCs, government instrumentalities, government financial institutions, including subsidiaries are covered by the law, with the exception of the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authorities, and research institutions.

Originally posted at 10:46 am | Monday, June 6, 2011