By Jason de Asis

SENATE OFFICE, Manila, October 28, 2010-Senator Franklin Drilon, chairman of senate finance committee defended the executive order (EO) 7 which ordered the suspension bonuses and allowances of the governing board of state enterprise until the year ended, adding that it is only proper to stop the draining of government coffers of President Benigno  “Noynoy” Aquino III (PNOy).

He defended PNoy saying that it is proper for the president to issue the directive and that pending the approval of Congress of a proposed law that will create a new compensation scheme for state enterprises.

“The governing boards of various GOCCs have abused their power even more and granted themselves excessive allowances if not for the executive order,” Sen. Drilon said. This uncovered the widespread misuse of state funds by members of the governing boards of government-owned or controlled corporations (GOCCs), he furthered, adding that without the EO, the abuses will continue unabated and public interest will continue to suffer.

The petition filed by Jelbert Galicto, a legal office of Philippine Health Insurance Corp. in Butuan City, assailing the legality of EO7 which should be declared unconstitutional as it he claimed it encroaches on the legislative power of setting pay scale for GOCC wherein the senator reacted saying that the EO only covers the directors and trustees.

“While the directors or trustees of state enterprises have the power to fix the compensation of employees under their respective charters,” said Sen. Drilon, however, he said that the governing boards should not have granted themselves unwarranted bonuses as Memorandum Order No. 20 issued by former President Gloria Macapagal-Arroyo in 2001 imposed as a ceiling on compensation on the heads of GOCCs an amount which is double the salary of their counterparts in the Cabinet.

Sen. Drilon, who sponsored Senate Resolution No. 17 urging the President to issue an order which was the basis of the executive order, also authored Senate Bill 2566 or the GOCC Governance Act of 2010 as a result of the findings of the Senate Finance Committee of how rampant the abuses are and in an effort to regulate the operations of state firms and put a stop on the abuses of state funds.

The proposal seeks to establish a new remuneration system for directors, trustees and employees of GOCCs, which will be recommended by monitoring body to be known as the Governance Council for GOCCs. However, the ratio of compensation for those occupying higher ranks to those at the lower ranks should be maintained at equitable levels, giving due consideration to higher percentage of increases to lower level positions and lower percentage increases to higher level posts.

No exemptions will be made for state firms from the coverage of the new compensation scheme, and in no case shall there be any decrease in the salaries of incumbent employees of state-run enterprises who are covered by Republic Act 6758, as amended, upon the implementation of the Compensation and Position Classification System for state firms.

Meanwhile, an initial hearing is scheduled when session resumes on November 8. (Jason de Asis)