Aquino suspends bonuses, allowances of GOCC execs

Malacañang on Wednesday suspended the allowances and bonuses of the board of directors or trustees of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs), except “reasonable" per diem allowances until a new guidelines on their compensation can be issued. “The grant of allowances, bonuses, incentives, and other perks to members of the board of directors/trustees of GOCCs and GFIs, except reasonable per diems, is hereby suspended until December 31, 2010, pending the issuance of new policies and guidelines on the compensation of these board members," according to Section 10 of President Benigno Aquino III’s Executive Order (EO) 7.
EO 7 created the Task Force on Corporate Compensation (TFCC) to review remunerations granted to GOCC and GFI board of directors or trustees, officers, and rank and file employees. It will also review the discretionary funds of GOCCs and GFIs. The TFCC will include the President as chair, with Department of Budget and Management, Department of Finance, and the Civil Service Commission as members. It will submit its findings within 90 days from the issuance of EO 7. Aquino issued the order a week after the Senate passed Senate Resolution 17, filed by Senator Franklin Drilon, asking Aquino to suspend the bonuses — except per diems — of GFI and GOCC board members, pending the enactment of legislation. Aquino's latest order tasked the TFCC to prepare an updated inventory of all salaries, allowances, and other benefits of GOCC and GFI officials and employees, and to formulate and recommend measures to rationalize the compensation system and the use of discretionary funds, including putting a cap on total compensation. The task force will categorize all remuneration for government personnel in accordance with the Total Compensation Framework (TCF) in Section 3 of EO 7. The framework limits all remuneration of executives, managers and rank-and-file employees as follows: a. Basic salaries, including step increments; b. Standard allowances and benefits, which are given to all employees across agencies; c. Specific-purpose allowances and benefits which are given under specific conditions, based on actual performance of work; and d. Incentives, which are rewards for loyalty to government service and for exceeding performance targets. EO 7 also imposed a moratorium on salary increases, new allowances, and benefits increases — except salary adjustments in line with EO 811 issued on June 17, 2009 and EO 900 of June 23, 2010 — “until specifically authorized by the President." Aquino cited as basis for EO 7 the 1987 Constitution, Presidential Decrees 985 and 1597, and Republic Act 6758 as amended by Joint Resolution 1 s. 1994 and 4 s. 2009. How compensation packages compare with prevailing industry practices, as well as the financial capability of the GOCC or GFI, and privatization plans are the factors that will influence the new compensation levels. According to EO 7, the rationalization of compensation and the classification system of executives, managers, and employees of GOCCs and GFIs will also be guided by the principle that “all government personnel shall be paid just and equitable compensation in accordance with the principle of equal pay for work of equal value." It said “The compensation for government personnel shall generally be comparable with those in the private sector doing comparable work in order to attract, retain, and motivate a corps of competent civil servants." Aquino said in his first State of the Nation Address (SONA) last July that board members of the Metropolitan Waterworks and Sewerage System were receiving excessive bonuses and allowances under the administration of former President Gloria Macapagal-Arroyo, now a representative of Pampanga’s Second District. After the Aquino SONA, the Senate initiated hearings on the compensation of GOCC and GFI officials. —JE/VS, GMANews.TV