Senate wants GOCC execs to explain fat paychecks

(Updated 7:23 pm) Executives of government-owned and –controlled corporations (GOCCs) that received fat paychecks from 2007 to 2009 must face the Senate committee on finance and explain their excessive bonuses, allowances, and take home pays. The Senate will summon the highest paid executives of GOCCs, including Armand Arreza, administrator of the Subic Bay Metropolitan Authority (SBMA), whose take home pay topped P70 million from 2007-to 2009. Senator Franklin Drilon, chairman of the Senate finance committee, said that officials of Clark Development Corp. (CDC), Development Bank of the Philippines (DBP), Metropolitan Waterworks and Sewerage System, and other GOCCs would be summoned on August 24 to shed light on their "excessive" paychecks. "We will call on the executives concerned in order to clarify and to explain such allowances and salaries, which they received, which appear on the surface to be excessive," Drilon said after a committee hearing on GOCCs. Highest paid execs During the hearing, Drilon listed the highest paid GOCC executives in the last three years. His list showed that Arreza was paid P26.9 million last year; Benigno Ricafort, CEO of CDC, got P14.5 million; Edgardo F. Garcia, DBP deputy executive officer, P12.7 million; Bangko Sentral Gov. Amando Tetangco Jr. P10.8 million; and Benedicto Ernesto Bitonio Jr., DBP executive vice president, P9.3 million. Arreza's compensation package included P100,000 transportation allowance, P1.8 million gasoline allowance, and P5.7 million intelligence fund, Drilon said. Senator Ferdinand Marcos Jr., questioned why SBMA needed an intelligence fund. "Can you imagine, the SBMA has an intelligence fund... Now, we learn that even (the Philippine Drugs Enforcement Agency) does not have such fund," he said. Drilon said that SBMA is one of those government entities losing money, yet its executives are the highest paid among the GOCCs. "The same thing with the CDC," he said. The Drilon list for 2008 also placed Arreza as the highest paid GOCC executive with P30 million; CDC's Lauz Liderato with P10.9 million; DBP's Regardo Garcia with P10.2 million. Winston Garcia, president and general manager of the Government Service Insurance System got P8.5 million, and DBP's Bitonio Ernesto received P7.4 million. In 2007, Arreza was also the highest paid with P14.5 million, followed by Liderato with P9.1 million, Land Bank of the Philippines’s Alfonso Cruz with P7.2 million, Bangko Sentral’s Tetangco with P6.1 million, and Social Security Systems' Templo Garcia with P5.8 million. Of more than 150 GOCCs, 26 were exempted from the Salary Standardization Law. But Drilon noted that the "abuses" within GOCCs were not limited to executive salaries, saying that the executives probably benefited from unwarranted bonuses and allowances. All bonuses and allowances of GOCC executives, who by virtue of representation are board members of private corporations, should keep in mind that all bonuses or allowances they have received should go to the fund they represent, Drilon said. "In my view they can be made to refund... failure to remit can constitute malversation of funds," he said. Entertainment expenses Senator Ralph Recto also revealed that GOCCs racked up P682 million in "representation and entertainment expenses" in 2008. The BSP alone spent P391 million, or 14 times more than what the government's biggest agency - the Department of Education - spent that year, Recto said. Recto also disclosed that the SSS spent P64.9 million, Home Development Mutual Fund P48.6 million, SBMA P22.6 million, GSIS P16.8 million, and Philippine Postal Savings Bank P14.6 million. He was not ready to "render a value judgment" on whether the money used for "power lunches and dinners" were not "well spent," Recto said. "My charitable view is that perhaps the nourishment they got from these meetings kept our economy afloat, mitigated recession, and stimulated the economy," he added. Drilon said that national government presently subsidizes GOCCs to the tune of P14 billion, but many of those firms fail to remit at least 50 percent of revenues as prescribed by the law. "Neglected" to control Every budget proposal goes through the "proper approval" from the Office of the President, Myrna Chua, director of the Budget and Management said. Drilon blamed the previous administration’s failure to the curb the excesses of GOCC executives, saying that former President Gloria Macapagal-Arroyo "neglected" to control, monitor, and supervise the pay and perks of top officials of state firms. “In the past Malacañang tolerated it. They failed to exercise supervision either deliberately or through neglect," he said. The senator cited Executive Order No. 20, which says that pay increases of GOCC officials should not exceed by 200 percent the regular pay in government. The Arroyo administration failed to implement this, he said. "You can charge them with negligence but I doubt that you can make a case," he said. To right this wrong, Drilon said the Senate would push for legislation bestowing upon President Benigno Aquino III the authority to "fix" the compensation packages of GOCCs. "This power to appropriate funds for salaries can be delegated to the President," as long as there would be provisions for reasonable standards to be followed, he said. The proposal would make fund disbursements without the approval of the Budget Department and the President unauthorized and illegal, Drilon said. "We cannot allow this to go on," he added. —VS, GMANews.TV