GCG SAFEGUARDS STATE’S INTERESTS IN UCPB
Pending the effectivity of the Supreme Court’s Temporary Restraining Order (TRO) against the privatization of the United Coconut Planters Bank (UCPB), the Governance Commission will begin regulating UCPB as a GOCC pursuant to the “GOCC Governance Act of 2011” (R.A. No. 10149).
UCPB was originally under the supervision of the Presidential Commission on Good Government (PCGG) pursuant to a Memorandum of Agreement (MOA) with the Governance Commission since PCGG was still litigating matters involving the bank. It was then approved by the President for privatization based on R.A. No. 10149 following the Supreme Court’s 24 January 2012 ruling in Philippine Coconut Producers Federation, Inc. (COCOFED) v. Republic that had the legal effect of making UCPB a GOCC. Under Executive Order No. 179, which approves the privatization of the bank, the proceeds would be used by the government for the benefit of the coco farmers.
However, on 30 June 2015, the Supreme Court issued a TRO enjoining the privatization of the bank. The TRO was issued based on the petition filed by the Confederation of Coconut Farmers’ Organizations of the Philippines, Inc. (CCFOP), who alleged that the privatization would deny the coconut farmers of their right over the coco levy funds.
Until the privatization is implemented, UCPB remains a GOCC that must comply with the corporate governance requirements of R.A. No. 10149, among others. The members of the bank’s Governing Board will be appointed by the President of the Philippines to the extent of the State’s ownership and its performance will be closely monitored and evaluated by the Governance Commission. In particular, regulation will focus on safeguarding the interests of cocofarmers, among others.
Compensation of UCPB personnel will also be regulated under the Compensation and Position Classification System (CPCS) for GOCCs, once approved by the President. The bank will also have to comply with the Government Procurement Reform Act (R.A. No. 9184) and will be subjected to examination by the Commission on Audit (COA) like all other GOCCs. Change such as in Articles of Incorporation is also subject to endorsement of the Governance Commission pursuant to its MOA with the Securities and Exchange Commission (SEC).
Regulation of UCPB as a GOCC will be done gradually over a 2-year transition period since UCPB has been operating as a private corporation ever since. The transition period is also intended to allow for possible resolution of the TRO before implementing major changes in the internal governance setup of UCPB.
Bea Nadine V. Barte
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