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Gov't limits bonuses for GOCCs.

Manila, Philippines - From a high of P13 million worth of incentives during the past administration, a member of a Government Owned or Controlled Corporation (GOCC) board can now only receive as much as P3 million in bonuses each year.

Presidential Spokesman Edwin Lacierda announced that the government has limited the perks received by the GOCC executives, citing the reduction of the annual bonus cap.

The reforms were part of the law signed by President Aquino on the rationalization of the compensation scheme in the GOCC sector in a bid to prevent excessive and unauthorised allowances and benefits. The law also created the Governance Commission for GOCCs (GCG) that monitors the operations of the government firms as well as set their performance evaluation systems.

"For instance in SSS (Social Security System), the highest that you can get under the previous administration, the range is somewhere from P1.8-million up to P13.5-million for a director," Lacierda said in a Palace press briefing.

"Under this administration, under the GCG Law, and as set out by the standards or the scorecard provided by GCG, the highest that a director can get, summing up the per diem attendance and also the performance-based incentive is only P3 million," he said.

An appointive GOCC director receives per diems for actual attendance at meetings as well as performance-based incentives that can only be approved if the company achieves its targets.

The President, in Executive Order No. 24 issued in 2011, has classified the GOCCs into five groups, from A to E, based on assets and revenues. This means the larger the state corporation, the bigger the allowable compensation for its officials.

For large firms or those classified "A," the maximum per diem is P40,000 per meeting or P1,536,000 per year. Board directors and trustees in small state firms or those classified "E" will get a maximum per diem of P5,000 per meeting and P192,000 per year.

Lacierda said that the government set "a performance scorecard" to determine the reasonable PBI for a GOCC director.

The GCG, in a memorandum circular, already set the formula for computing the performance based incentive of a GOCC director.

If a GOCC gets a performance rating of 100 percent, the board directors are entitled to an incentive worth 100 percent of the total actually annual authorized per diems received.

A 95 percent performance rating means an incentive for the GOCC directors of 90 percent of the total per diems. If the GOCC gets a 90 percent performance grade, the incentive per director is set at 80 percent of the total per diems received in a year.

Asked if the compensation package for the GOCC package is fair compared to the benefits obtained by cabinet members, Lacierda said they recognize the "distinction" between the two groups.

"We perfectly understand the distinction between the GOCCs and us, government officials, who work on a full-time basis and we do not begrudge them. There are also qualifications that are inherent and peculiar to a particular GOCC," he said.

Lacierda, meantime, assured that the GCG continue to improve the performance scorecard system, recognising the complaints of excessive bonuses in the GOCC sector.

The GCG, in a briefing posted on its website, has defended the latest compensation of the GOCC directors, saying it is both reasonable and competitive with the private sector.

On concerns the bonuses of GOCC executives may be unethical since they are in public service, the GCG said: "The answer to the question would ultimately hinge on whether it is moral/ethical for the government to adopt a policy with the objective of attracting, retaining and motivating a competent corps of civil servants and ultimately improving public service."

"GCG was mandated by Congress to implement this policy, and has benchmarked the rates for GOCCs with companies at the private sector that are ranked at the median in line with the guiding principle that the compensation system must be both reasonable and competitive with the private sector," it added.

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Title Annotation:National
Publication:Manila Bulletin
Date:Jan 22, 2014
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