By Jason de Asis

SENATE OFFICE, Manila, November 9, 2010-Senator Franklin M. Drilon, chair Senate committee on finance confirmed that members of the Government-Owned and Controlled Corporations (GOCC’s) have allocated their benefit bonuses that went as high as the equivalent of twenty six (26) months, notwithstanding the poor financial condition on the said enterprise in the course of the committee inquiry to PSR No. 66.

During the hearings, he said that the Commission on Audit (COA) independent GOCC’s like the Manila Economic and Cultural Office (MECO) established excessively generous retirement schemes that granted P600,000 yearly in service to directors who have served at least two (2) years, adding that Trustees of Pension Fund agencies have, throughout the years, impudently received from investee corporations hundreds of millions worth of stock option plans and profit share denominated as Directors’ Fees, in clear violation of their fiduciary duty as trustees of the pension fund.

It was also informed by the Department of Budget and Management (DBM) that most of the corporate operating budgets (COB’s) of GOCC’s which incidentally account for one-third (1/3) of the national expenditures for salaries and maintenance and other operating expenses, have not been dutifully submitted to DBM for review.

They lamented the discovery that GOCC subsidiaries, which further drain public funds, have been created and local banks audaciously purchased despite the absence of requisite approvals from monitoring government agencies.

Other issues concerned are often ridiculed and politicized appointment of less than qualified individuals to policy-making posts in GOCC’s, the clamor for the abolition of non-performing and obsolete public enterprises and poor corporate governance environment and weak oversight system.

On the basis of the data gathered in the course of hearings conducted by the Committee in aid of legislation, pursuant to PSR No. 66, Drilon has filed Senate Bill No. 2566, or the proposed GOCC Governance Act, which seeks to address these concerns by introducing reforms in this sector of governance.

The purposes of the bill is the improvement of corporate governance in GOCC’s by setting a just and equitable compensation system at reasonable levels that takes into account the results of operations of GOCC’s and offers enough incentives to attract the best talents to manage these enterprises, introducing a transparent process for the selection of board members that ensures qualifications and expertise, creating a more effective oversight mechanism through the GOCC Council for Governance (GCG), introducing a performance evaluation system to help assess and evaluate the effectiveness and efficiency of GOCC’s, enabling the GCG to make recommendations, when necessary, for their reorganization, streamlining, merger, abolition or privatization.

The said recommendations will be submitted to the President, who shall be vested with the delegated authority based on a set of reasonable standards, to undertake the reorganization of the GOCC’s, adding that the welfare of the employees in GOCC’s will be protected and even advanced as the bill ensures that no diminution of their salaries will be allowed.

“Through this measure, it is our hope that the GOCC’s will become a significant tool for economic development, instead of a burden upon the government’s resources,” he said. (Jason de Asis)