MANILA, Philippines — The Senate and key officials of the Aquino administration agreed on Tuesday to push for the passage of the proposed Public Enterprise Corporate Governance Act (PECGA) that would empower the government to dissolve or merge some of the 157 government-owned or -controlled corporations (GOCCs) and rationalize the compensation of their officials.
The officials noted that 14 of these GOCCs have a combined expenditure of P532 billion or one-third of the proposed 2011 P1.645 trillion national budget.
The agreement was reached by the Senate finance committee chaired by Sen. Franklin M. Drilon, on one hand, and by Finance Secretary Cesar Purisima, Budget Secretary Florencio Abad and Economic Planning Secretary Cayetano Paderanga Jr. at the end of the overview on the proposed 2011 national budget by Development Budget Coordinating Committee (DBCC).
Purisima said the Philippine government should study the possibility of adopting Singapore’s Temasek in supervising the operations of these GOCCs. Temasek is a holding company.
After conducting six hearings and calling 24 offices, including GOCCs and government finance institutions (GFIs) the other day, Drilon revealed his plan to draft the proposed legislation that would have a Government Corporate Monitoring and Coordinating Council (GCMCC) that would be tasked to review the mandates of the 157 GOCCs.
“The Act will have the delegated authority to impose certain standards of performance for appointment to the board of directors so that we can have rules on the qualification of the board of directors in the different GOCCs. We will also ask them (the council) with a review of the salary structure and compensation system of the GOCCs,’’ he said.
Purisima said the proposed GCMCC should be run like Temasek because government agencies are neither equipped nor have the mindset to actually oversee these corporations “and this can be studied carefully since we are overhauling (these corporations).’’
Drilon pointed out that “43 percent of the Philippine government debts is owned to creditors because of the GOCCs.’’
He said his committee discovered that one-third of the entire expenditure program of the national government “is with the GOCCs and nobody monitors them.’’
“We intend to establish a strong monitoring committee composed of the Department of Budget and Management (DBM), the Department of Finance (DoF) and the National Economic Development Authority (NEDA) and then we will put up a strong executive director with a rank of a Usec (Undersecretary) who will be monitoring the standards of performance, their budgets and dividends that are due to the national government and in general oversee their operations,’’ he said.
The 14 GOCCs whose operations are now being monitored in the current Aquino administration are the National Electrification Administration (NEA), National Irrigation Administration (NIA), Home Guaranty Corporation (Pag-IBIG), National Development Corporation (NDC), National Food Authority (NFA), National Housing Authority (NHA), Metropolitan Waterworks Sewerage Administration (MWSS), Local Water Utilities Administration (LWUA), Light Rail Transit (LRT), Philippine National Railways (PNR), Philippine Export Zone Authority (PEZA), Philippine Ports Authority (PPA), Philippine National Oil Corporation (PNOC) and the power sectors consisting of National Power Corporation (Napocor), Transmission Corporation and the Power Sector Assets and Liabilities Management (PSALM).
“In effect, one-third of the national expenditure program is not being scrutinized by Congress and this one-third does not include the Central Bank, Development Bank of the Philippines (DBP), Government Service and Insurance System (GSIS), Social Security System (SSS), Pag-IBIG, OWWA and that is why they get away with anything under the sun in so far as compensation is concerned,’’ Drilon said.
“This is aggravated by the fact that they are exempted from the Salary Standardization Law and their attitude is- ‘we are an independent Republic," he added.
Based on the Commission on Audit, the total assets of the GOCCs is P4.3 trillion which represents equity of the economy in the GOCCs, he said.
Drilon said for every P100 of total public sector expenses, P37 is spent by the 14 monitored GOCCs and only P63 is monitored by the GOCCs.
He said the intention of his committee in conducting its hearings on the GOCCs “is to come up with a comprehensive and reformed legislation on how much benefits board members nominated by the GOCCs to private firms had made investments in should get, and it is not the business of the committee to bring people to court.’’
Drilon stressed this after former SSS chairman Thelmo Cunanan dared him to show evidence that he violated the law when he received P66 million in 2007 to 2009 for exercising his stock option on shares at Philex Mining, a private firm where he sat as a member monitoring the investments of SSS.
Cunanan, according to Drilon, also made from P8 million to P12 million for sitting as board member of Union Bank. Cunanan maintained, however, that he only made P15.5 million because he has not dispose of all his shares and that he used personal funds in buying the Philex shares.
Drilon said Cunanan’s exercise of his stock option is inconsistent with his fiduciary duty to the trust fund “and we do not need a special law to make Mr. Cunanan liable for violation of that fiduciary duty and what is relevant is his failure to turn over this privilege of stock option to the pension fund that Mr. Cunanan represents.’’
Mario Casayuran, Manila Bulletin