The Governance Commission opens its doors to the GOCC Sector for dialogues on issues concerning the Compensation and Position Classification System (CPCS) and employee welfare as part of its dynamic and collaborative approach to providing excellent public service.  

According to the Department of Budget and Management (DBM) Last Tranche of Salary Increases Implementing Guidelines published on 11 January 2023, roughly P48 million has been provided to the Governance Commission’s budget in its 2023 General Appropriations Act (GAA) to support the conduct of study on the government compensation structure of different national government agencies and GOCCs.[1][1]  

Chairperson Justice Alex L. Quiroz (ret.) assured that the Governance Commission would submit the required recommendations to the Office of the President and continue its transparent and constructive engagement with the GOCC Sector to resolve CPCS issues.  

Meanwhile, in another interview, Head Executive Assistant and Chief of Staff Atty. Remus Romano A. Reyes reiterated the Governance Commission’s mantra which encapsulates its proactive initiatives in line with the 2028 vision.   

“The GCG enjoins all GOCCs to ‘Aim G.R.E.A.T’: G for Good Governance, R for Rightsizing, E for Efficiency, A for accountability, and T for Transparency,” stated Atty. Reyes.  

“While we forge ahead with our mandate and espouse G.R.E.A.T to the GOCC Sector, we encourage open communication and collaboration to address concerns whether related to the CPCS or Performance Targets. Para sa mga GOCCs, handa ang GCG. Mag-usap tayo,” added Atty. Reyes.  

The GCG remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability, and responsiveness in corporate performance by monitoring and evaluating GOCCs’ performance.  

-oOo-  

For media contact:  
Atty. Gideon D.V. Mortel, D.C.L  
Commissioner  
(02) 5328 – 2030 to 34 local 446  
gdvmortel@gcg.gov.ph  
www.gcg.gov.ph  

  
Kristine Joyce B. Reaño  
Public Relations Officer IV  
(02) 5328 – 2030 to 34 local 442  
kjbreano@gcg.gov.ph  
www.gcg.gov.ph  

The Governance Commission enjoins the GOCC Sector to participate in concretizing efforts to combat Climate Change at the Annual National Climate Change Expenditure Tagging (CCET) Orientation dated 07 March 2023, spearheaded by the Climate Change Commission (CCC).

The CCET has supported several projects under the government geared towards climate change resiliency included Water Sufficiency Projects, Sustainable Energy and Food Security, and Flood Management Program, and a National Greening Program in the past year.

This 2023, the CCET orientation aims to support President Ferdinand Marcos Jr.’s 8-point socio-economic agenda and implement climate change provisions in the Philippine Development Plan 2023-2028.

“We can only imagine how the Philippines will transform as several projects will enhance the capacity and resilience of communities and ecosystems to natural hazards and climate change,” Commissioner Gideon D.V. Mortel said during his opening remarks as special guest speaker.

“Allotting a budget to projects geared towards climate-oriented objectives will yield positive repercussions. Through the CCET, we become hopeful in seeing a country that can withstand torrents of typhoons, survive unexpected energy and water shortages, and overcome price inflation of food supply,” Commissioner Mortel added.

A noteworthy development in the orientation for this year is the linking of Climate Change initiatives to Gender and Development (GAD) Advocacies. The Governance Commission will support initiatives that will ensure meaningful participation of women and men in the development of climate tagged Programs and Projects (PAPs), Gender Analysis and Collection of Sex Disaggregated Data, and promotion of the GAD Guidelines Checklist for GAD attributions in climate-tagged PAPS.

The GCG will continue to be CCC’s staunch ally in projects that promote climate change mitigation and adaption.

The Governance Commission remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability, and responsiveness in corporate governance by monitoring and evaluating the performance of GOCCs.

-oOo-

For media contact:
Atty. Gideon D.V. Mortel, D.C.L
Commissioner
(02) 5328 – 2030 to 34 local 446
gdvmortel@gcg.gov.ph
www.gcg.gov.ph

Kristine Joyce B. Reaño
Public Relations Officer IV
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

The Governance Commission submitted its position on Senate Bill No.1670[1] (SB No. 1670) to the Senate - Committee on Banks, Financial Institutions and Currencies on 30 January 2023. 

Among the salient points of discussion in the paper is the creation of the Maharlika Investment Corporation (MIC) which is envisioned to be an independent corporate body under the proposed bill. The MIC is intended to govern and manage the proposed state investment fund. 

The Governance Commission noted that the MIC bears the attributes of a Government Owned or Controlled Corporation (GOCC) such as its charter, functions relating to public needs, and state ownership. 

The GCG also emphasized that the funding from Government Financial Institutions (GFIs) and GOCCs may affect their respective investment strategies and performance scorecards. These proposed investments must necessarily be within and allowed by their respective charters. 

Ultimately, the Governance Commission is one with Congress and lauds its efforts to ensure the country’s economic transformation, growth, and sustainability.  

The GCG, therefore, supports the inclusion of the provision in SB No. 1670 providing at least 25% of the net profits of the MIC to families living below the poverty threshold. 

The Governance Commission remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability, and responsiveness in corporate governance by monitoring and evaluating the performance of GOCCs. 

-oOo- 

For media contact: 

Atty. Gideon D.V. Mortel, D.C.L 

Commissioner 

(02) 5328 – 2030 to 34 local 446 

gdvmortel@gcg.gov.ph 

www.gcg.gov.ph 

Kristine Joyce B. Reaño 

Public Relations Officer IV 

(02) 5328 – 2030 to 34 local 442 

kjbreano@gcg.gov.ph 

www.gcg.gov.ph 

[1] An Act establishing the Maharlika Investment Fund, Providing for the Management, Investment, and Use of the Provceeds of the Fund and for Other Purposes 

The Governance Commission initiated a dialogue with the Clark Development Corporation (CDC) management and union workers on 09 February 2023 to discuss their concerns related to the implementation of the Compensation and Position Classification System (CPCS) under Executive Order (E.O.) No. 150. 

Chairperson Justice Alex L. Quiroz reiterated that the goal of the CPCS under E.O. No. 15 is to standardize the salary of government workers under its scope and curtail the dissipation and wastage of government funds. 

Discussed were the resolution of past compensation appeals and ongoing CPCS concerns of the CDC. Chairperson Justice Quiroz urged the workers to raise their concerns to the GCG CPCS technical panel for further review and update. 

Chairperson Justice Quiroz assured the workers that the Governance Commission will provide the necessary recommendations to the Office of the President and continue with its conduct of a transparent and collaborative dialogue with the CDC to finally address their CPCS concerns. 

The GCG remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability, and responsiveness in corporate performance by monitoring and evaluating GOCCs’ performance. 

-oOo- 

For media contact: 

Atty. Gideon D.V. Mortel, D.C.L 

Commissioner 

(02) 5328 – 2030 to 34 local 446 

gdvmortel@gcg.gov.ph 

www.gcg.gov.ph 

Kristine Joyce B. Reaño 

Public Relations Officer IV 

(02) 5328 – 2030 to 34 local 442 

kjbreano@gcg.gov.ph 

www.gcg.gov.ph 

On 24 January 2023, the Governance Commission for GOCCs (GCG) signed the respective 2023 Performance Scorecard of the Landbank of the Philippines (LBP) and the UCPB Savings Bank (UCPB-SB) at the GCG office, launching the start of the 2023 Performance Target Conferences (PTCs) between GCG and the GOCC Sector.

Prior to the conference, a consultative meeting was convened between the technical panels representing the GCG and the respective GOCCs to discuss the strategic measures and targets in the Performance Scorecard. During this meeting, the supervising agency or parent company of the GOCC was present to provide further inputs and insights to the discussion.

“The GOCCs must be G.R.E.A.T,” urged GCG Chairperson Justice Alex L. Quiroz.

“Good Governance, Responsiveness, Efficiency, Accountability, and Transparency are some of the keywords that the GOCCs should keep in mind while setting their targets and strategizing on how to achieve them,” Chairperson Justice Quiroz added.

Republic Act No. 10149, otherwise known as the “GOCC Governance Act of 2011”, mandates the Governance Commission to actively exercise the State’s ownership rights through the institutionalization of a Performance Evaluation System (PES).

The PES sets the process of appraising the accomplishments of GOCCs in a given fiscal year based on set performance criteria, targets, and weights using the Performance Scorecard as the primary governance and management tool to facilitate the achievement of breakthrough results by the GOCC.

The achievement of such targets determines the grant of the Performance Based Bonus and Performance Based Incentive; determines whether the Appointive Director is eligible for reappointment; ascertains whether the GOCC should be reorganized, merged, streamlined, abolished or privatized; and determines whether a special audit of GOCC is necessary.

As always, the GCG remains steadfast in its mandate as the central advisory, oversight, and monitoring body for GOCCs, to institutionalize transparency, accountability, financial viability and responsiveness in corporate performance by monitoring and evaluating GOCCs’ performance.

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) held an on-site inspection at the air traffic management facility of the Civil Aviation Authority of the Philippines (CAAP) at MIA Road, Pasay City. This is to ensure that the Philippine Air Traffic Management System’s (ATMS) management is operating functionally, safe, and reliable.

The GCG together with CAAP's officials conducted the on-site inspection at the ATMS's control room and equipment room, where the said unexpected technical glitch transpired, and at very small aperture terminal (VSAT), where a set of satellite dishes used to link communication and surveillance facilities nationwide are located.

“We are here to exercise the monitoring power of GCG being the oversight body of CAAP. We want to know what really transpired here because this affects many individuals. By the number, around 75,000 people were affected,” Commissioner Gideon DV Mortel said.

“As an agency under our coverage, they are transparent. We were led into the entire process of it. The entire facility was shown to us and up to this time, they are cooperative and willing to share with us all the information we need. In fact after this, we will be writing CAAP another memorandum to complete their submissions based on what transpired here today” Commissioner Mortel added.

The activity is a part of the evaluation that the GCG will be undertaking for the Scorecard of CAAP in connection with the technical glitch that occurred on New Year’s Day, where hundreds of flights in the country were either cancelled, diverted, and/or delayed.

According to GCG Chairperson Justice Alex Quiroz, as partners of CAAP in national development and public service, the Authority’s report will aid in determining how the Governance Commission may support the former and assure the “non-reoccurrence” of the New Year’s Day glitch.

The GCG is responsible for monitoring and evaluating the operations of GOCCs as their central advisory, oversight, and monitoring body to guarantee that they are transparent and responsive to the needs of the public.

-oOo-

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Commissioner Geraldine Marie Berberabe-Martinez discusses the GCG’s Anti-Corruption and Integrity Program during the session on “Preventing Corruption and Improving Business Integrity in State-owned Enterprises (SOE)” at the Meeting of the Asia-Pacific Network on Corporate Governance of SOEs on 08 December 2022 in Jakarta, Indonesia.

The Governance Commission for Government-Owned or-Controlled Corporations (GCG) takes on the challenge to be an esteemed institution for corporate governance, exemplifying the highest levels of professionalism in the stewardship of GOCCs to safeguard accountability, economic viability, and responsiveness to the needs of the Filipino by 2028.

This is the new vision and strategy that the GCG has set as stewards of the GOCC Sector during a series of planning sessions in November and December 2022.

The Governance Commission crafted its new vision and strategy guided by President Ferdinand Marcos Jr.’s directive to Chairperson Alex L. Quiroz, “Tulungan natin ang ating bansa.” It also follows the President’s marching orders of transparency, rightsizing the government, and digitalizing government services.

Chairperson Quiroz noted that the GCG has already begun the work with its Anti-Corruption and Integrity Program and dialogues about the Compensation and Position Classification System. These priorities are some of the new strategies of the Commission.

The Chairperson remarked that the GCG could overcome the hurdles in its path through collaboration and coordination.

Commissioner Geraldine Marie Berberabe-Martinez added that the Governance Commission must strive to provide better public service everyday. Part of the agency’s improved strategy is the streamlining its processes for efficient service delivery.

During the conclusion of the planning sessions, Commissioner Gideon D.V. Mortel enjoined the GCG personnel to always work with the highest standard of excellence and service.

The Governance Commission is the central advisory, oversight, and monitoring body for GOCCs.

-o0o-

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) enters into a partnership agreement with the Philippine Competition Commission (PCC) for the promotion of competitive neutrality on 16 December 2022. The Memorandum of Agreement (MOA) contains provisions emphasizing the coordination and collaboration of both parties in policy review, assessment, and access to information, among others. (L-R): Marah Victoria S. Querol, Commissioner, PCC Johannes Benjamin R. Bernabe, Officer-in-Charge, PCC; Justice Alex L. Quiroz (ret.), Chairperson, GCG; Atty. Geraldine Marie B. Berberabe-Martinez, Commissioner, GCG; and Atty. Gideon D.V. Mortel, D.C.L.

The Governance Commission for GOCCs (GCG) and the Philippine Competition Commission (PCC) signed a Memorandum of Agreement (MOA) on 16 December 2022. “We are entering [this] partnership with the Philippine Competition Commission to promote competitive neutrality across the GOCC Sector,” said GCG Chairperson Alex L. Quiroz.

 The MOA also formalizes GCG and PCC's coordination in reviewing existing regulations and guidelines to ensure compliance with applicable competition laws and principles.

“This MOA will provide for exchange of information when it comes to PCC’s assessment of the impact on the market of mergers or acquisitions involving GOCCs or transactions post-decoupling,” said PCC Officer-in-Charge Johannes Benjamin R. Bernabe.

The MOA facilitates consultations between the two agencies in implementing policies of mutual interest and coordination on merger review involving GOCCs. Both agencies also agreed to conduct capacity-building activities and support the rollout of the National Competition Policy.

"The underlying principle of Competitive Neutrality is fairness. It means state-owned enterprises and private businesses compete and operate on a level playing field, while recognizing GOCCs’ critical roles and interventions across sectors,” he added.

Included in the provisions of the MOA is the Policy Review where GCG and PCC will work together to review existing regulations and guidelines issued by the GCG and GOCCs. This will ensure that there is consistency adhering to both the National Competition Policy as well as the principle of competitive neutrality. The MOA also includes the formation of a Joint Task Force in the implementation of coordination and cooperation efforts of both parties.

Considering resource and operational considerations, GCG and PCC may organize joint capacity-building activities and consultative meetings to promote the activities and address concerns that will arise from the agreement. GCG and PCC will both provide access to information and documents such as reports, data sets, analyses, assessments, notices, and guidelines necessary for the implementation of the MOA.

The GCG, as the central policy-making and regulatory body mandated to safeguard GOCCs, is an ally of the PCC in ensuring the principle of competitive neutrality is upheld and a level playing field is maintained.

-oOo-

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission recognized 14 Top Performing GOCCs in the Corporate Governance Scorecard on 05 December 2022 at the Philippine International Convention Center. Shown in the photo (Upper L-R): Atty. Karen Kreez L. Tangco-Pascasio, OIC-Director IV, GCG; Representative from Development Bank of the Philippines; National Electrification Administration; Atty. Gideon D.V. Mortel, D.C.L., Commissioner, GCG; Justice Alex L. Quiroz (ret.), Chairperson, GCG; Atty. Geraldine Marie B. Berberabe-Martinez, Commissioner, GCG; Representative from: Clark Development Corporation; Small Business Corporation; Philippine Deposit Insurance Corporation; and LBP Leasing and Finance Corporation; and (Lower L-R) Representative from: Bases Conversion and Development Authority; Power Sector Assets and Liabilities Management Corporation; Land Bank of the Philippines; Government Service Insurance System; Philippine Reclamation Authority; National Power Corporation; Philippine Crop Insurance Corporation; and Cebu Porth Authority.

The Governance Commission for GOCCs (GCG) enjoined Government-Owned or -Controlled Corporations (GOCCs) to adhere to the highest standards of corporate governance at the CY 2021 Corporate Governance Scorecard Exit Conference held on 05 December 2022, at the Philippine International Convention Center in Pasay City.

During the event, the GCG recognized 14 GOCCs who performed well in their CGS. The Corporate Governance Scorecard (CGS) was developed using a methodology benchmarked against the Principles of Corporate Governance of the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Corporate Governance Scorecard. The CGS helps identify and evaluate GOCCs’ strengths and weaknesses in contrast to existing corporate governance standards. The Commission holds an annual exit conference to ensure that the GOCC Sector remains steadfast in their pursuit of better corporate governance.

The CGS complements the Performance Evaluation System for GOCCs, which sets organizational targets and appraise the accomplishments of a GOCC.

GCG Chairperson Alex L. Quiroz emphasized that the Governance Commission and GOCCs are partners in good governance. The GCG commended the GOCC Sector for its collaborative efforts with the Commission on CGS initiatives. The Commission also underscored the importance of instilling and embracing good governance values in GOCCs.

As further proof of the strengthened partnership between the GCG and GOCCs, Chairperson Quiroz noted that the Commission has adopted an open dialogue particularly about Compensation and Position Classification System (CPCS) concerns and employee welfare. The Governance Commission will revisit the CPCS in 2023 following the ₱48-million budget allotted by the Department of Budget and Management as part of the GCG’s FY 2023 proposed budget.

The GCG will continue to enrich the governance culture and champion best practices in the sector. The Commission remains dedicated to guiding GOCCs toward meeting international standards and upholding a transparent, responsive, and accountable GOCC Sector.

To view the list of GOCCs with an outstanding CGS performance for CY 2021, click here.

-o0o-. 

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Spurred by President Bongbong Marcos’ directive to Chairperson Alex L. Quiroz, “Tulungan natin ang bansa,” the new leadership of the Governance Commission for GOCCs (GCG) has taken on the agency’s mandates in high gear.

Starting with a responsive approach to its oversight mandate, Chairperson Quiroz initiated dialogues with GOCCs to resolve Compensation and Position Classification System (CPCS) concerns. In its first month, the new Commission already met with 29 out of 37 GOCCs with pending appeals.

“In the few months that we have been here, we foresee challenges that lie ahead, especially as the CPCS is now in its implementation stage and will be up for review next year,” Chairperson Quiroz said during the Meet and Greet with the Broadcast Media.

“Moving forward, we will continue to engage and collaborate with the GOCCs and other stakeholders to ensure that we efficiently address the concerns that they have elevated to us,” Chairperson Quiroz added.

The GCG fulfills its mandates in line with the three main agendas of the Marcos administration: transparency, rightsizing, and digitalizing government services.

The new Commission’s Anti-Corruption and Integrity Program aligns with the transparency agenda of the administration as it aims to safeguard P10 Trillion in total assets of the GOCC Sector and prevent the dissipation and wastage of public funds arising from corruption.

The Governance Commission continues to study GOCCs that may be recommended for abolition, privatization, merger, or streamlining in line with the President’s recent directive on rightsizing the government.

It also continually enhances its Integrated Corporate Reporting System (ICRS), a web portal which enables GOCCs to electronically submit financial and non-financial reports to be made available for public view.

The Governance Commission, as the oversight body for and stewards of GOCCs, shall steer the Sector towards achieving results in line with President Marcos Jr.’s key agendas.

-o0o-

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs’ (GCG) proposed budget of ₱402.701 Million has been approved by the Senate panel. The proposed budget is the biggest amount since the inception of the Governance Commission in 2011. In Photo L-R: Senator Sherwin Gatchalian, GCG Commissioner Geraldine Marie Berberabe-Martinez, Senator Nancy Binay, GCG Chairperson Retired Justice Alex L. Quiroz, Senator Juan Edgardo "Sonny" Angara, GCG Commissioner Gideon D.V. Mortel, Senator Ronald Dela Rosa, and GCG Director Johann Carlos S. Barcena.

The Senate approved the ₱402.701 million budget during the Senate Session No. 28 held on 10 November 2022, presided over by Senate President Juan Miguel Zubiri. This is an increased budget by ₱156.9 million from the initial ₱245.7 million indicated in the 2023 National Expenditure Program.

"We thank Senator Sherwin Gatchalian, who sponsored our budget, and Senate Finance Committee Chairperson Sonny Angara for their trust and confidence in the mandates of the GCG. This budget will allow the Governance Commission to operate at full capacity and forge ahead to pursue the establishment of an Anti-Corruption and Integrity Program to safeguard the P10 Trillion assets of the GOCC Sector and ensure the prevention of wastage and dissipation of public funds," Chairperson Alex L. Quiroz said.

"The GCG has numerous projects down the pipeline, and the approval of the budget would allow us to implement our initiatives and programs," Quiroz added.

The Governance Commission, as the oversight body for GOCCs, shall continue working with the Senate and House of Representatives in monitoring Government-Owned or -Controlled Corporations and recommending relevant actions to make them more responsive to the Filipino people.

-o0o-

For media contact:

Atty. Gideon D.V. Mortel, D.C.L

Commissioner

(02) 5328 – 2030 to 34 local 446

gdvmortel@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) is bestowed the Outstanding Accounting Office Award for the year 2021 in recognition of its adherence to the highest professional and ethical standards of the Association of Government Accountants of the Philippines, Inc. (AGAP) on 04 October 2022 at the Park Inn by Radisson North EDSA.

This was the sixth time that the AGAP conferred this award to the Commission, the previous years being 2015, 2016, 2018, 2019, 2020, and 2021. The Governance Commission was a Hall of Famer in 2020 for being granted the same award for three consecutive years.

The AGAP awards exemplary accounting government offices that meet all the criteria in submitting financial reports. The standards include quality, timeliness, reliability, and compliance with accounting rules and regulations.

Government instrumentalities, including Local Government Units (LGUs) and Government-Owned or-Controlled Corporations (GOCCs), can be conferred with the Accounting Office Award upon the nomination of the Commission on Audit (COA). The COA nominates government instrumentalities that exemplarily fulfilled all the criteria.

This award proves that the GCG's leadership and its Finance Division continue to uphold integrity and excellence in the agency.

Photo Caption: GCG receives Outstanding Accounting Office Award for 2021. The Association of Government Accountants of the Philippines, Inc. (AGAP), conferred the Governance Commission for GOCCs (GCG) with the Outstanding Accounting Office Award for the year 2021 on 04 October 2022. AGAP awarded the GCG for having exemplary met the criteria of Accuracy, Timeliness, Reliability, and Compliance with Accounting Rules and Regulations set by the Committee on Awards. Shown in Photo (L-R): Ms. Mary Rose A. Arpon, Administrative Officer V; Mr. Josue C. Rosal, Accountant IV; Ms. Ivy Angeline L. Sazon, Administrative Assistant; Ms. Inna Marie Feliz C. Protacio-Ladislao, Chief Administrative Officer; Atty. Geraldine Marie Berberabe-Martinez, Commissioner; Mr. Raul T. Abad, Chief Accountant; Mr. Jaypee O. Abesamis; Director IV; Mr. Reynaldo S. Fuentesfina Jr., Accountant III; Mr. Fahad Bin Abdul Malik N. Tomawis, COA Resident Auditor; Mr. Paul Adam M. Tablante, COA Resident Auditor; and Ms. Vionne Rochelle D. Asuque, Administrative Assistant.

For media contact:

Atty. Johann Carlos S. Barcena

Director IV/ GCG Spokesperson

jsbarcena@gcg.gov.ph

www.gcg.gov.ph

Kristine Joyce B. Reaño

Public Relations Officer IV

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Under the helm of the new leadership is a Commission whose dynamic approach is bent on instilling vigilance, discipline, and compliance among the Government Owned or Controlled Corporations (GOCC) Sector.

In less than 60 days since Chairperson Alex L. Quiroz assumed his new role, he has introduced a series of dialogue meetings with GOCCs to look into and resolve their pressing concerns.

Discussing its new approach during the Senate budget deliberation, the new Commission introduced two of its main priorities during its administration: a proactive Anti-corruption and Integrity program to safeguard the P10 Trillion in total assets of the GOCC Sector and the Implementation of the new Compensation and Position Classification System (CPCS) of GOCCs and re-evaluation of the CPCS.

“We are opening a possibility of filing criminal, civil, or administrative cases against erring officials to prevent dissipation and wastage of funds arising from corruption,” Chairperson Quiroz said. Chairperson Quiroz is also looking into the conduct of a special audit of GOCCs in support of the Governance Commission exercising its functions as stipulated in the GOCC Governance Act.

Public office is public trust. The State’s active exercise of its ownership rights in GOCCs through the GCG, together with the vigilance of all stakeholders involved, will ensure that the governance of GOCCs, shall be carried out in a transparent, responsible, and accountable manner.

One of the main challenges the Commission faces is the non-compliance and late submissions of the Sector during performance evaluation. This has prompted the new leadership to study the use of a show cause order compelling the submission of GOCCs.

“The doctrine of justice delayed is justice denied, so we won’t allow further delay of action obligated to the GOCCs…We’re adopting measures, schemes, how to make these GOCCs to be transparent. We’re going to digitalize the transactions, open to the public,” Chairperson Quiroz said.

Through stringent and efficient policy-making, the Governance Commission is looking into improving the GOCC Sector in terms of fiscal discipline and corporate governance.

-o0o-

For media contact:

Kristine Joyce B. Reaño

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

This refers to the appointments of Directors of GOCC Governing Boards in an acting capacity issued by the President of the Philippines.

The constitution conferred to the President the authority to appoint officials of the Executive Department (Section 16, Article VII, 1987 Constitution), which includes temporary appointments or in acting capacity. Said temporary/acting capacity appointments is to prevent a hiatus in the discharge of official functions, pending the selection of permanent appointees (Hon. Luis Mariano M. General v. Hon. Alejandro S. Urro, et. Al, G.R. No.191560, 29 March 2011), and the former, thereafter, are to relinquish the positions once permanent appointees assume office.

For media contact:

Kristine Joyce B. Reaño

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) Chairperson Samuel G. Dagpin, Jr. emphasized the achievements of the Governance Commission on the anniversary celebration of the GOCC Governance Act of 2011 on 03 June 2022. This year marks the 11th anniversary since the creation of the central policy-making and regulatory body mandated to safeguard the State’s ownership rights and monitor the operations of government-owned or-controlled corporations (GOCCs).

Chairperson Dagpin cited the Compensation and Position Classification System (CPCS) as one of the continued undertaking of the Governance Commission.

Securing approval on 01 October 2021 from President Rodrigo Roa Duterte, the CPCS began a new compensation scheme that will provide equal pay for work of equal value. Several guidelines and circulars were published subsequently for proper implementation of the system.

“In January this year, the Governance Commission issued the CPCS Implementing Guidelines and its respective CPCS Circulars. As of 01 June 2022, 54 GOCCs out of 67 received the Authorization to implement the CPCS,” Chairman Dagpin shared.

The Chairman also shared that the GCG remains steadfast in its commitment to the 2017-2022 Philippine Development Plan by ensuring a level playing field between the government and private sector. He added that the GCG had shown increasing net satisfaction scores since 2020 based on third-party surveys. From an increase to 60% in 2020, the Governance Commission received a 74% net satisfaction score in 2021, which proved continual improvement in the agency.

Commission on Audit (COA) Commissioner Roland Café Pondoc, guest speaker, shared that the COA sees the Governance Commission as a key stakeholder in ensuring transparency and accountability in the use of government resources in the GOCC Sector, as well as in strengthening public trust and confidence in government corporate finances.

COA Commissioner Pondoc commended the Governance Commission for adopting and utilizing technological advancements, tools, and resources to ensure unhampered delivery of services.

“It is a step in the right direction, especially in this time of the new normal where government agencies need to leverage technology to effectively carry out our respective mandates. For the Commission, we are undergoing an audit modernization program, which includes strategies to build capacities for remote auditing, as well as use artificial intelligence to help auditors in data collection and analysis,” Commissioner Pondoc shared.

GCG Chairman Dagpin also underscored the conferment of the Outstanding Accounting Office Award by the Association of Government Accountants of the Philippines, Inc. (AGAP) to the GCG in 2015, 2016, 2018, 2019, 2020 as a Hall of Famer, and in 2021. This achievement reflected the GCG’s high professional and ethical standards in terms of its finances. The Chairman also shared that the Governance Commission had received an Unqualified Opinion, the highest COA rating, for nine (9) years from 2013 to 2021.

For media contact:

Kristine Joyce B. Reaño

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

Established on 08 October 2015, the Corporate Governance Scorecard for GOCCs (GCG M.C. No. 2015-07 (Re-Issued)) was developed using a methodology benchmarked against the Principles of Corporate Governance of the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Corporate Governance Scorecard.

The CGS annually assesses the Corporate Governance performance of GOCCs to help identify and evaluate the latter’s strengths and weaknesses compared to existing corporate governance provisions and their adherence to best practices and international standards. Along with the Performance Scorecards of GOCCs, the CGS ensures the transparency of GOCCs on their corporate governance initiatives and practices.

To view the list of GOCCs that garnered the highest CGS ratings for CY 2020, click here.

For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) issued the Compensation and Position Classification System (CPCS) Implementing Guidelines on 14 January 20221  following President Rodrigo R. Duterte's approval of the Executive Order (E.O.) No. 150, s. 2021.

The CPCS Implementing Guidelines is promulgated to detail the coverage, exclusions, implementation, compensation system, allowance, benefits and incentives, additional entitlements, and procedural rules of the GOCCs’ new compensation system.

According to the Implementing Guidelines, all Government-Owned or -Controlled Corporations (GOCCs) and their subsidiaries, unless excluded from the coverage of Republic Act (R.A.) No. 10149 or with approved abolition or deactivation orders, shall implement the new system upon receipt of their respective authorization to adopt the CPCS from the GCG. 

The CPCS authorization shall contain the Classification, Job Evaluation Results, and Tiering of the GOCCs.

The Classification determines the appropriate compensation system to be implemented by the GOCC. It considers the nature of operations, the financial viability to sustain their operations/activities and the size of the GOCCs. 

Further, the Job Evaluation Results shall determine the CPCS Job Grades of the GOCC positions which were determined using the Job Evaluation methodology under E.O. No. 150. 

Finally, the Tiering determines the applicable pay levels that GOCCs may implement based on their financials.

Upon receipt of its authorization, the GOCC Governing Board shall approve the appropriate salary schedule under the CPCS with due consideration of the GOCC’s capability to afford and sustain its implementation. GOCCs with substantial compliance to CPCS requirements upon approval of E.O. No. 150 shall retroactively apply the salary structures, allowances, benefits, and incentives effective 05 October 2021. 

Along with the Implementing Guidelines, the GCG also issued several circulars concerning allowances, bonuses and incentives, among others. The GCG also released the CPCS Frequently Asked Questions (FAQ). These may be found at the CPCS portal on the GCG website at https://gcg.gov.ph/cpcs/.

The CPCS follows the principles of the GOCC Governance Act of 2011 to standardize GOCC compensation and provide equal pay for work of equal value.

The Governance Commission is the implementing agency of the CPCS.

1 Published in the BusinessWorld on 14 January 2022.

For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

The Supreme Court (SC), in G.R. Nos. 197422 and 197950, unanimously affirmed the constitutionality of Republic Act No. 10149, otherwise known as the GOCC Governance Act of 2011, that promotes financial viability, fiscal discipline, and responsiveness of Government-Owned or-Controlled Corporations (GOCCs).

In the decision penned by Justice Marvic M.V.F. Leonen, the Court En Banc dismissed the petitions filed by Albay Representative Edcel Lagman and Surigao del Sur 1st District Representative Prospero Pichay, Jr.

The high tribunal found that the law mandates the improvement of the State’s ownership rights in GOCCs, promotes growth by ensuring that operations are aligned with national development policies and programs, and addresses the poor handling of the operations and abuses committed by officials of these corporations.

The SC held that Republic Act No. 10149 introduced valid changes to the terms and conditions for service in GOCCs in that “Congress acted within its discretion when it modified, in good faith and in accordance with the objectives and policies contained in valid laws, the aspects of public offices which exist by virtue of the same exercise of legislative power.

Congress enacted Republic Act No. 10149 to address the reported abuses, poor performance, and inefficiencies in the operations of GOCCs. The law, among others, reduced the terms of incumbent GOCC officers and created a central policy-making and regulatory body for GOCCs, tasked with reforming and developing a standardized compensation and position classification system for GOCCs.”1

These actions that the Congress enacted through R.A. No. 10149 were geared toward achieving what they perceived as a great public need.

Of equal note, the SC did not see the need to address questions of legislative policy or wisdom with due respect to the Congress as a co-equal branch of government. Absent any clear showing of unconstitutionality, the provisions of RA No. 10149, duly deliberated upon and approved by the legislature, should be upheld.

The Governance Commission welcomes this decision as it continues to pursue its mandate which the Congress has enacted through the law. Further, GCG remains steadfast in its commitment in ensuring a strategic and performance-driven GOCC Sector that upholds transparency and institutionalizes good corporate governance in the service of the Filipino people.

1-Page 71, Decision in G.R. Nos. 197422 and 197950, promulgated on 03 November 2020

For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) has received the highest rating for the Calendar Year 2020 in the annual audit report of the Commission on Audit (COA) released on 21 June 2021. The report, which is now available on the COA’s website, was signed on 10 May 2021 by supervising auditor Melinda R. Barcial.

2020 marks the 8th year that the Governance Commission has received an Unqualified Opinion for the presentation of financial statements. Meriting such rating entails consistently following the Generally Accepted Accounting Principles and Philippine Public-Sector Accounting Standards.

Despite the COVID-19 pandemic, the GCG was able to sustain transparent, efficient, and streamlined processes. The GCG Management was able to present financial statements that complied with applicable laws, rules, and regulations.

The recommendations of the COA and other stakeholders presented future improvement opportunities to aid the GCG in enhancing its processes and operations.

By addressing findings and implementing recommendations, the GCG becomes more effective in its role as the central advisory, monitoring, and oversight body of the GOCC Sector.

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For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

President Rodrigo Duterte noted the milestones of the Governance Commission for GOCCs (GCG) since the enactment of the GOCC Governance Act of 2011.

“GCG has been instrumental in enabling GOCCs to become catalysts for our nation’s economy and growth development. I hope this milestone will further inspire the men and women of the Commission to work even harder, ensuring that transparency and accountability will become the norm,” President Duterte said through a recorded message.

The GCG, the central monitoring and oversight body of government-owned or-controlled corporations (GOCCs), celebrated the 10th Anniversary of Republic Act No. 10149, otherwise known as the GOCC Governance Act of 2011 on 11 June 2021.

The virtual celebration officially marked the Commission’s 10th year of policy-making, performance evaluation, and promotion of corporate governance that enable GOCCs to become significant tools for economic growth and development.

Senator Franklin M. Drilon, the principal author of the GOCC Governance Act, in a written message to the GCG commended the contribution of GOCCs in raising funds for the government’s COVID-19 response. He also noted that the potentials of the law may be further maximized.

During the celebration, GCG Chairperson Samuel G. Dagpin, Jr. said “We have done a lot. And there is much more to do regarding rationalizing the GOCC Sector and enhancing competitive neutrality, implementing the CPCS (Compensation and Position Classification System), promoting participatory governance in the Sector, and raising corporate governance to international standards, among others.”

Department of Finance Secretary Carlos G. Dominguez in a live message lauded the great strides that have been made in improving the performance of GOCCs and the valuable governance reforms implemented by the GCG in the government corporate sector. He in turn challenged GCG to correct the seeming incongruence between its evaluation against those made by other regulatory agencies.

Senator Richard J. Gordon, Department of Budget and Management Secretary Wendel E. Avisado, and the former GCG Chairperson and Commissioners also sent their messages in view of the occasion.

During the virtual celebration, the Governance Commission also recognized its partners, such as the Securities and Exchange Commission, Presidential Commission on Good Government, the Office of the Ombudsman, among others, for their contribution to promoting good governance in GOCCs.

In photo during the virtual celebration of the 10th Anniversary of the GOCC Governance Act (from left to right): Undersecretary Bayani H. Agabin, Department of Finance (DOF); Secretary Carlos G. Dominguez III, DOF; Commissioner Dennis B. Funa, Insurance Commission (IC); Ms. Beatrice G. Karamihan, GCG; CEO Leonardo Jose M. Berba, Institute for Solidarity in Asia (ISA) and Institute of Corporate Directors (ICD); Chairperson Samuel G. Dagpin, Jr., GCG; Executive Clerk of Court Maria Teresa S. Pabulayan, Sandiganbayan; Director Jacqueline D. Ponseca, GCG; Ms. Kristine B. Reaño, GCG; Commissioner Marites Cruz-Doral, GCG; Director Jonathan B. Beltran, Commission on Audit (COA); Former GCG Director William B. Ruyeras, Professor Simeon A. Ilago, University of the Philippines- National College of Public Administration and Governance (UP-NCPAG); Director Irving V. Occeña, GCG; Chairperson Emilio B. Aquino, Securities and Exchange Commission (SEC); Director Michael D. Pabalinas, GCG; Undersecretary Ricardo P. Bernabe III, Office of the Executive Secretary; Director Karen Tangco-Pascasio, GCG; Director Robert Alvin T. Arceo, Department of Trade and Industry (DTI); Chairperson Reynold S. Munsayac, Presidential Commission on Good Government (PCGG); Deputy Executive Secretary Alberto A. Bernardo, Internal Audit - Office of the President; Director Johann S. Barcena, GCG; Atty. Juliet M. Guevara, GCG; Mr. Melecio Zuñiga, Jr., GCG; Officer-in-Charge Eric B. Distor, National Bureau of Investigation  (NBI).

-o0o-

For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph

Established on 08 October 2015, the Corporate Government Scorecard (CGS) is a quantitatively-driven evaluation tool based on existing and globally accepted standards and practices. It is an instrument that assesses the corporate governance initiatives of a Government-Owned or -Controlled Corporation (GOCC) through a methodology benchmarked against the Organisation for Economic Co-operation and Development Principles (OECD Principles) and the ASEAN Corporate Governance Scorecard (ACGS). 

The OECD Principles provide the benchmark for building an environment of trust, transparency, and accountability in corporations. Corporate Governance principles, such as the OECD Principles and the ACGS, guide corporations on how to operate in a way that would lead to financial stability, business integrity, long-term sustainability and resilience, and attracting investments. In particular, the OECD Principles include: Ensuring the Basis for an Effective Corporate Governance Framework, the Role of Stakeholders, Disclosure and Transparency, and the Responsibilities of the Board. 

The GCG used these international standards as a point of reference and introduced the CGS for the GOCC Sector. Through this, the Governance Commission aims to reinforce improvement of corporate governance standards that will lead to long-term sustainability and resilience in the Sector.

The CGS checks GOCCs’ policies and practices in terms of stakeholder relationships, disclosure and transparency, and responsibilities of the Board. GOCCs which adhere to the principles yield a good corporate governance score. This means that these institutions have rules and practices that allow them to have a satisfactory relationship with the Board, internal and external stakeholders, shareholders, and creditors. 

The output of the CGS is called the CGS score. This is an indicator of the GOCCs' level of adherence to international best practices.

CGS and PES

Despite its clear characteristics, the CGS is often mistaken for the Performance Evaluation System (PES), a performance evaluation framework of the GCG. While both are significant for a thorough assessment of a GOCC, both are unique in terms of their objectives and purpose.

The CGS aims to enhance the corporate governance standards in GOCCs towards sustainability and resilience. It helps the Governance Commission and GOCCs identify and assess the latter’s strengths and weaknesses by checking the level of adherence to existing corporate governance provisions, best practices, and international standards of corporate governance.

The CGS asks questions such as “Does the GOCC stipulate the existence and scope of its effort to address customer’s welfare?” to assess the policies and practices in terms of relationship with stakeholders. It also checks the content quality of a GOCC’s Annual Report to assess the disclosure and transparency of GOCCs. 

In terms of the responsibilities of the Board, the CGS evaluates the practices of the GOCC, asking questions such as, “Does the GOCC disclose how it implements and monitors compliance with the code of ethics or conduct?”

In contrast, the purpose of the PES is to set organizational targets and appraise the accomplishments of a GOCC. It indicates the organizational performance of a GOCC based on their mandates and long-term vision as a contribution to national development.

It measures the GOCC’s performance of its strategic objectives that are anchored on the five perspectives: a) Social Impact, b) Financial, c) Stakeholder/Customer, d) Internal Processes, and e) Learning and Growth.

Each perspective tackles a certain scope of the organization. The Social Impact Perspective refers to the national and community-wide or socio-economic impact of the services delivered by the GOCC. The Financial Perspective evaluates the financial performance and utilization of the corporation. The Stakeholder/Customer Perspective measures organizational performance based on the level of satisfaction of customers with the GOCC services delivered. The Internal Process Perspective refers to the efficient manner and quality of the corporation’s operations and functions. The Learning and Growth Perspective measures the competencies of the employees and other capacities that are vital to performance.

It is important to note that the PES also consists of different measures given the various mandates, operations, and objectives of the GOCCs. The CGS, on the other hand, consists of the same set of standards being checked across all the GOCCs.

The PES is the basis for the Performance-Based Bonus of the employees. It also forms part of the computation of the Performance Evaluation for Directors (PED) score of the Board Members. It also helps the GCG to ascertain whether a GOCC should be reorganized, merged, streamlined, abolished, or privatized.

The PES promotes accountability in government corporations, while the CGS encourages transparency; both implement the State policy in the governance of GOCCs. In tandem with the PES, the CGS helps ensure that state-owned enterprises are running at their best, full capacity and are espousing a culture of good governance.

For media contact:

Kristine Joyce B. Reaño
(02) 5328 – 2030 to 34 local 442
kjbreano@gcg.gov.ph
www.gcg.gov.ph
 

The Governance Commission for GOCCs (GCG) obtained a high audit rating for the Calendar Year 2019 in the recently released annual audit report of the Commission on Audit (COA). The report, which is now available on the COA’s website, was signed on 31 July 2020 by supervising auditor Melinda R. Barcial. The GCG is among the 15 attached agencies under the Office of the President that received an unqualified audit opinion.

This is an achievement for the GCG as an organization, made possible by the hard work of its personnel who ensure that processes remain clean, efficient, and streamlined.

Each year since 2013, the COA has been issuing an Unqualified Opinion to the GCG for consistently presenting its financial statements following the Generally Accepted Accounting Principles and Philippine Public-Sector Accounting Standards.

Financial statements comprise of financial performance, statement of cash flows, statement of changes in net assets/equity, statement of comparison of budget, and actual amounts for the year.

The recommendations of the COA and other stakeholders serve to further aid the GCG to continuously improve its processes and become more effective in its role as the central advisory, monitoring, and oversight body of the GOCC sector.

The COA also commended the GCG Management for its good procurement planning that brought an effective, efficient, and economical discharge of the financial and operational functions of the agency.

For media contact:

Kristine Joyce B. Reaño

(02) 5328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

GCG reaps Outstanding Accounting Office Award. The Association of Government Accountants of the Philippines, Inc. (AGAP), conferred the Governance Commission for GOCCs (GCG) with the Outstanding Accounting Office Award for year 2018 on 23 October 2019. AGAP awarded GCG for having exemplary met the criteria of Accuracy, Timeliness, Reliability and Compliance to Accounting Rules and Regulations set by the Committee on Awards. Shown in Photo (L-R) GCG Chief Accountant, Mr. Raul T. Abad; DBM Secretary, Mr. Wendel E. Avisado; DBM Undersecretary and AGAP President, Ms. Tina Rose Marie L. Canda; GCG Director, Mr. Jaypee O. Abesamis; GCG Supervising Administrative Officer, Mr. Raymond C. Ramos; COA Commissioner, Mr. Roland C. Pondoc, and AGAP Executive Vice-President, Ms. Ester A. Aldana.

The Association of Government Accountants of the Philippines, Inc. (AGAP), conferred the Governance Commission for GOCCs (GCG) with the Outstanding Accounting Office Award for the year 2018 on 23 October 2019.

Recognizing the quality, timeliness, and accuracy of the Governance Commission’s financial reports, AGAP granted the coveted award during the opening day ceremonies of the convention-seminar held in Cagayan de Oro City. Annually, AGAP recognizes exemplary accounting offices in the government during its technical seminar and convention. The said event promotes programs towards maintaining high professional and ethical standards. It also encourages continuing quality education among members and personnel in Accounting.

The Governance Commission was previously granted this award in the years 2015 and 2016.

Government instrumentalities, including Local Government Units (LGUs) and Government-Owned or-Controlled Corporations (GOCCs), can be conferred with the Accounting Office Award upon the nomination of the Commission on Audit (COA). The COA nominates exemplary government instrumentalities that meet all the criteria in the submission of financial reports, including reliability and compliance with accounting rules and regulations.

The Governance Commission was among the forty-one conferred with the Most Outstanding Accounting Office Award for 2019.

Consistent with this achievement, the GCG also received an “Unqualified Opinion” on the 2018 Auditor’s Report by the COA. Since 2015, the COA has been issuing an Unqualified Opinion to the GCG as the latter consistently presented its financial statements following the Generally Accepted Accounting Principles and Philippine Public-Sector Accounting Standards. 

For media contact:

Kristine Joyce B. Reaño

(02) 328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

The Office of the President has approved the revised Interim Performance Based Incentive (PBI) System for the Appointive Directors of Government Owned or Controlled Corporations (GOCCs), as proposed by the Governance Commission for GOCCs (GCG), setting the limits and the conditions on its grant.

The grant of the incentive was previously suspended following President Duterte’s directive to study and control the allowances of GOCCs and other government entities for transparent and corrupt-free governance.

Under the revised system, an Appointive Director merits to receive PBI only if the GOCC: (1) achieved a weighted-average of at least 90% in its Performance Scorecard for the applicable year; and (2) complied with the various good governance conditions set by the Inter-Agency Task Force and the GCG.

In addition, the Appointive Director must have: (1) attended at least 90% of all duly called for Board and Committee meetings; (2) rendered at least three (3) months of aggregate service as an Appointive Director in any GOCC for the applicable calendar year; (3) submitted all the requirements for Director Performance Review; and (4) has not been found guilty of an administrative and/or criminal cases related to his/her work.

The maximum PBI amount that an Appointive Director may receive varies depending on its asset and revenue sizes based on the GOCC’s classification under Executive Order (EO) No. 24, s.2011. 

With the revisions, the maximum PBI amount has decreased by 67%. For the largest GOCCs (Class A), the maximum PBI has been reduced to P512,000.00 from the previous maximum amount of P1,536,000.00. On the other hand, the maximum PBI for the smallest GOCCs (Class E) is now P64,000, compared to the previous P192,000.00.

The funding for the PBI shall be charged to the respective corporate funds of GOCCs, subject to the approval of their respective Governing Boards per applicable laws, rules, and regulations.

With the upcoming State of the Nation Address (SONA), the Revised PBI is another accomplishment by President Duterte from his 2017 SONA stating that salaries, allowances, incentives, benefits and bonuses across the GOCCs will have to pass by the Office of the President. The limitations set can allow these government corporations to allocate more funds to better serve the public.

Click here to see the Fact Sheet on the Classification of GOCCs per E.O. No. 24, s. 2011 and the Comparison of PBI Rates.

For media contact:

Kristine Joyce B. Reaño

(02) 328 – 2030 to 34 local 442

kjbreano@gcg.gov.ph

www.gcg.gov.ph

(Released on 12 October 2018)

(Released on 03 September 2018)

The Governance Commission clarifies that GCG Memorandum Circular (M.C.) No. 2018-02 was issued to revoke GCG M.C. No. 2013-03 (Re-Issued) after its evaluation that the revoked M.C. contained provisions and processes that unnecessarily impede the timely approval and implementation of government projects.

The GCG regularly reviews its existing circulars and policies in keeping with its mandate to ensure the alignment and consistency of the GOCCs’ operations with the national development policies and programs, resulting to a more efficient and effective integration of programs, activities and priorities of the GOCCs.

In consideration of the current Administration’s policy to remove redundant requirements and align the development and implementation of infrastructure projects under the Private-Public Partnership (PPP) scheme, the Governance Commission issued GCG M.C. No. 2018-02 to effectively streamline the process of implementing Major Development Projects and Major Contracts of GOCCs.

Under GCG M.C. No. 2018-02, Major Development Projects and Major Contracts of GOCCs shall continue to strictly fall under the review and decision-making process of the National Economic Development Authority (NEDA), the NEDA Investment Coordination Committee (ICC), the NEDA Board, and/or the Economic Development Cluster (EDC), pursuant to all applicable existing laws, rules and regulations. GOCCs shall submit to the Governance Commission a report on said projects and contracts entered into for purposes of monitoring GOCC performance and asset utilization.

It should be noted that in all cases, GCG M.C. No. 2018-02 emphasizes that all agreements shall not be grossly disadvantageous to the government, and that GOCCs shall comply with existing laws, rules and regulations, regardless of covered land area and/or period.  To ensure this, the new M.C. now even requires the favorable legal opinion or contract review of the OGCC on GOCC contracts before entering into the said agreement.

GCG M.C. No. 2018-02 does not prescribe nor dispense a specific mode of procurement of Major Development Projects and Major Contracts. It stipulates that proposed Major Development Projects and Major Contracts of GOCCs lie within the sound business judgement of the respective Governing Boards of GOCCs who are constituted under Republic Act No. 10149 as “fiduciaries of the State,” with the “legal obligation and duty to always act in the best interest of the GOCC, with utmost good faith” and who “must exercise extraordinary diligence in the conduct of the business and in dealing with the properties of the GOCC using the utmost diligence of a very cautious person with due regard for all the circumstances.”[1]

(Released on 06 July 2018)

The Governance Commission for GOCCs (GCG) has sought the explanation of Duty Free Philippines Corporation (DFPC) on the FY 2017 findings of the Commission on Audit (COA).

The DFPC is likewise directed to address said COA findings under the Performance Evaluation System (PES) of the GCG, which requires GOCCs to present concrete and time-bound action plans for addressing all COA findings, including the recently released Audit Report on misuse of DFPC funds.

Failure to properly address such findings will render the DFPC Board ineligible from receiving the 2017 performance incentives even if DFPC achieves its 2017 performance targets.

The DFPC, and all GOCCs for that matter, must be reminded that Republic Act (R.A.) No. 10149 or the GOCC Governance Act of 2011 has constituted all directors, trustees, and officers as “fiduciaries of the State”, with the “legal obligation and duty to always act in the best interest of the GOCC, with utmost good faith” and who “must exercise extraordinary diligence in the conduct of the business and in dealing with the properties of the GOCC using the utmost diligence of a very cautious person with due regard for all the circumstances.”[1]

GCG’s Oversight Functions

The GCG exercises its oversight functions on GOCCs’ operations primarily through performance monitoring and evaluation. Pursuant to R.A. No. 10149, the GCG is mandated to conduct performance evaluation of GOCCs in relation to their performance scorecards. Meanwhile, audit of GOCC operations in terms of their financial transactions are carried out by the COA. Findings such as those on DFPC are obtained during these audits by COA.

To further complement the audit of COA, the GCG has begun the conduct of quarterly validation of GOCC accomplishments in relation to their performance scorecards to intensify the performance monitoring of GOCCs. This is in addition to the regular annual performance evaluation being executed by the GCG.

While the GCG recognizes the limitations in its mandate, it continues to exercise its power over the GOCCs under its jurisdiction to the fullest extent permitted by its charter.

For media contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 local 307

vpdcastro@gcg.gov.ph

www.gcg.gov.ph

(Released on 25 April 2018)

The Governance Commission has reviewed the mandates of 12 GOCCs in relation to competitive neutrality issues, as part of its commitment to the Philippine Development Plan (PDP) 2017-2022. Among the 12 is the Philippine Amusement and Gaming Corporation (PAGCOR) which the GCG has recommended to President Rodrigo Roa Duterte for separation of commercial and regulatory functions due to its conflicting proprietary activities and regulatory functions in which its operation of casinos conflicts with its function as a gaming regulator.

The Governance Commission is committed to review the mandates of all 123 GOCCs under its jurisdiction, as well as recommend and implement appropriate actions to be undertaken for those with identified competitive neutrality issues, before the end of President Duterte’s term. 

The Governance Commission will be working closely with the Philippine Competition Commission (PCC), the National Economic Development Authority (NEDA), the Department of Justice (DOJ), and the Department Trade and Industry (DTI) to review the mandates of GOCCs, and recommend and initiate privatization or transfer of regulatory functions to the appropriate government agency.

It is the firm belief of the Governance Commission that there should be a level playing field between GOCCs and corporations in the private sector performing similar commercial activities. Competitive neutrality is clearly among the policies of the State under Republic Act No. 10149 and the Ownership and Operations Manual Governing the GOCC Sector. Pursuant to Section 5(l) of the GOCC Governance Act of 2011, the Governance Commission is mandated to recommend to the President GOCCs for dispositive action “upon determination that there is a conflict between the regulatory and commercial functions of a GOCC.”

The Governance Commission is committed to its role in the formulation and implementation of the National Competition Policy to improve consumer welfare and market efficiency, and achieve Pagbabago and Patuloy na Pag-unlad as envisioned in PDP 2017-2022.

For media contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 local 307

vpdcastro@gcg.gov.ph

www.gcg.gov.ph

(Released on 12 January 2017)

Prior to the statement of Socioeconomic Planning Secretary Ernesto M. Pernia on the proposed cap on the salaries and bonuses of Government-Owned and –Controlled Corporation (GOCC) officials, regular employees and staff, the GCG has already been undertaking a study, in consultation with the Department of Finance (DOF) and the Department of Budget and Management (DBM), on the proposed Executive Order (E.O.) amending E.O. No. 24, s. 2011,[1] on the compensation of members of the Board of Directors/Trustees in GOCCs including Government Financial Institutions (GFIs) covered by Republic Act (R.A.) No. 10149.

The amendments to E.O. No. 24, s. 2011, which were approved by the Commission en banc on 30 September 2016, were proposed to distinguish the Director’s Compensation System (DCS) of GOCCs pending their adoption of the Compensation and Position Classification System (CPCS), which was approved by former President Aquino on 22 March 2016.

The amendments contained in the proposed E.O. provides for revised rates of per diems for every Board or Committee meetings attended by the Board of Directors/Trustees. The revised rates are in accordance with the policy of the Duterte Administration to promote prudence in spending and to provide for a compensation system that is reasonable and appropriate based on the performance of the GOCCs.

For media contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 local 406

vpdcastro@gcg.gov.ph

www.gcg.gov.ph

(Released on 29 November 2016)

The Governance Commission for GOCCs (GCG) has adopted an Interim Freedom of Information Manual to guide and assist the GCG and the public in dealing with requests of information. The Interim FOI Manual of GCG was signed and issued on 25 November 2016 following the issuance in 23 July 2016 of Executive Order No. 2 on Freedom of Information.

Designed to accommodate requests of information from the public regarding matters falling within the mandate of the GCG under Republic Act No. 10149, the Interim FOI Manual of the Governance Commission for GOCCs outlines the procedure of filing and processing of request for access to information, and the grant or denial, and remedies thereof.

The GCG has taken measures to operationalize the policy of the State on public disclosure of transactions and information involving public interest through the adoption of an Interim Freedom of Information Manual.

The Interim FOI Manual of the Governance Commission for GOCCs was adopted by GCG pending the issuance of the Office of the Executive Secretary (OES), Department of Justice (DOJ), and the Office of the Solicitor General (OSG) of a Memorandum Circular providing for the inventory of exceptions to the access of information.

Click here to view the Interim Freedom of Information Manual of the Governance Commission for GOCCs.

For media contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 local 406

vpdcastro@gcg.gov.ph

www.gcg.gov.ph

(Released on 25 October 2016)

Representatives of the nineteen (19) agencies conferred with the Most Outstanding Accounting Office Awards for 2015 posing with AGAP National President Gregorio C. Rulloda and DBM Secretary Benjamin E. Diokno.

The Governance Commission for GOCCs (GCG) was awarded Most Outstanding Accounting Office for 2015 by the Association of Government Accountants of the Philippines (AGAP), Inc. during the 2016 AGAP National Convention held on 19 October.

AGAP, the oldest organization of government accountants, budget and financial officers from the National Government (NG), Local Government Units (LGUs), and Government Owned or Controlled Corporations (GOCCs) in the Philippines, awarded GCG for having exemplary met the criteria of Accuracy, Timeliness, Reliability and Compliance to Accounting Rules and Regulations set by the Committee on Awards.

The Governance Commission was among the nineteen agencies conferred with the Most Outstanding Accounting Office Award for 2015 out of forty-five agencies from the NG, LGUs, GOCCs, and State Universities and Colleges nominated by the AGAP Committee on Awards.

AGAP awards outstanding accounting offices in the government during its annual technical seminar and convention where AGAP encourages and promotes programs towards maintaining high professional and ethical standards and continuing quality education among its members and personnel in Accounting.

For media contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 local 406

vpdcastro@gcg.gov.ph

www.gcg.gov.ph

(Released on 31 July 2016)

In reference to the news article of Mr. Prinz Magtulis entitled "GOCC holdovers step down today" published on 31 July 2016 in The Philippine Star. The Governance Commission appreciates the vigilance of the media especially on the selection and nomination process for GOCC Appointive Directors. Nevertheless, we would like to clarify some points raised in the news article.

First, holdover officials of GOCCs will remain in holdover capacity pursuant to Section 17 of Republic Act No. 10149 or the GOCC Governance Act of 2011, and, thus, are not covered by Memorandum Circular No. 1 issued on 30 June 2016. GOCC Appointive Directors remain in holdover capacity until replaced by a new appointee or re-appointed by the President of the Philippines.

Second, the Governance Commission did not issue any official statement regarding the selection and nomination process for GOCC Appointive Directors.

The GCG Chairman and Commissioners have recently been appointed and immediately assumed office on 27 July 2016. On 28 July 2016, the Governance Commission immediately began interviewing nominees for GOCC Boards.

Due to the urgency of filling up Appointive seats in GOCC Governing Boards, the new GCG Commission En Banc held its first en banc meeting on 30 July 2016. The new GCG Commission En Banc is composed of Chairman Jaime Ma. F. Flores II, Commissioners Michael P. Cloribel and Samuel G. Dagpin, Jr., and ex officio Commissioners, Finance Secretary Carlos G. Dominguez III and Budget Secretary Benjamin E. Diokno. The Commission En Banc resolved to prioritize the evaluation of nominees to GOCC Boards.

For Media Contact:

Veronica Paula D. Castro

(02) 328 – 2030 to 34 | www.gcg.gov.ph

5 GOCCs received an Award for Excellence on the Corporate Governance Scorecard (CGS) for the GOCC Sector this June. The Governance Commission, in partnership with the Institute of Corporate Directors (ICD) established the CGS to raise the Corporate Governance standards and practices of GOCCs to be at par with the ASEAN state-owned enterprises.

Established on 08 October 2015, the Corporate Governance Scorecard for GOCCs was developed using a methodology benchmarked against the Principles of Corporate Governance of the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Corporate Governance Scorecard. The CGS aims to annually assess the Corporate Governance performance of GOCCs and recognize well-governed GOCCs.

The CGS assesses each GOCC’s governance policies and practices on Stakeholder Relationships, Disclosure and Transparency, and Responsibilities of the Board. After the assessment, the Philippine Deposit Insurance Corporation garnered a total score of 94.50 and ranked 1st among 90 GOCCs. Completing the top 5 are: Land Bank of the Philippines with a total score of 89.50, Poro Point Management Corporation with a total score of 86.00, and Philippine Crop Insurance Corporation and Philippine Amusement and Gaming Corporation both with a total score of 80.50.

GCG confers PDIC with Award for Excellence on the CGS

The CGS helps the Governance Commission and GOCCs identify and assess the latter’s strengths and weaknesses compared to existing corporate governance provisions, and level of adherence to best practices and international standards of corporate governance. The CGS also works with the Performance Scorecard of GOCCs as it ensures improvement of transparency of GOCCs’ corporate governance initiatives and practices.

To view the complete list of CGS scores of GOCCs for CY 2014, click here.

Media Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

www.gcg.gov.ph

Government-Owned or-Controlled Corporations (GOCCs) once again posted remittances during the last GOCC Day or ceremonial turnover of dividends under the administration of President Benigno S. Aquino III.

50[1] GOCCs, led by their respective Chairpersons and Chief Executive Officers, handed over checks to President Aquino in a simple ceremony at the Rizal Hall in Malacañan Palace today. The GOCC Day is the annual ceremonial turnover of GOCCs’ dividends and recognition of GOCCs’ achievements and their significant contributions to the country’s national development.

This year’s GOCC dividends and other remittances increased from a total of P36.36 billion remitted in last year’s GOCC Day.

The Landbank of the Philippines (LBP) had the highest dividends at P6.6 billion and remitted a total of P6.85 billion. The Philippine Amusement and Gaming Corporation (PAGCOR), on the other hand, had the highest total remittances at P8.869 billion. LBP and PAGCOR are joined by 7 more GOCCs in the Billionaires’ Club – an elite class of contributors that have declared P1 billion or more in total remittances.

This year’s Billionaires’ Club include: Mactan Cebu International Airport Authority (MCIAA) with P5.062 billion; Bases Conversion Development Authority (BCDA) with P3.930 billion; Development Bank of the Philippines (DBP) with P2.87 billion; Manila International Airport Authority (MIAA) with P2.358 billion; Philippine Deposit Insurance Corporation (PDIC) with P2.27 billion; Philippine Ports Authority (PPA) with P2.187 billion; and Philippine Reclamation Authority (PRA) with P1 billion.

GOCCs are required to declare and remit at least 50% of their income as dividends to the National Government pursuant to Republic Act No. 7656. The tradition of GOCC Day started in 2010 under the Department of Finance (DOF) to give recognition to the GOCCs for the dividends that would be remitted to the National Government. Since 2012, the Governance Commission has continued the tradition of the annual ceremonial turnover over of GOCCs’ dividends and recognition of other GOCCs that made significant contributions to national development.

Media Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

www.gcg.gov.ph

      Q: Why is there a Revised Whistleblowing Policy for the GOCC Sector?

A: The Whistleblowing Policy, launched in 2014, is revised in order to strengthen the policy especially on the confidentiality of Whistleblowing Reports, and the anonymity of the whistleblower (unless he/she waives this privilege). In the revised Policy a new reporting channel is added –the Whistleblowing Web Portal.

Q: How many Whistleblowing Reports has GCG received and resolved since the launch of the Whistleblowing Policy?

A: GCG has received close to a hundred reports since the issuance of the Whistleblowing Policy for the GOCC Sector in 2014. Resolutions are decided on a case-to-case basis, as reports may be dismissed, referred, or further investigated upon depending on its subject.

Q: What are the possible results of GCG’s investigation of a Whistleblowing Report?

A:  Whistleblowing Reports may be dismissed for a lack of merit, directly forwarded to the GOCC concerned, or further investigated on, among other things. Investigation of reports may result to: referral to the appropriate government agency or to the GOCC for appropriate action, GCG sending recommendations to the Governing Board or to the Office of the President.

Q: How do I choose which channel to report through?

A: GCG has established the web portal as its primary reporting channel. However, alternative reporting channels have been established for the convenience of the whistleblower. While the web portal prompts whistleblowers to be more exhaustive with the information they provide, reports from other channels are not treated differently.

Q: How long does it usually take for GCG to resolve a report?

A: The timing of resolution of the reports depends on the complexity of each case. Nevertheless, GCG allocates the appropriate resources per case in order to efficiently handle the same.

Q: How can I help with the investigation?

A: GCG does not recommend whistleblowers to conduct investigations to maintain their anonymity and security. However, whistleblowers can help by being as exhaustive with their reports as possible, providing all available supporting materials to GCG, and not publicizing such information.

Q: How do I follow-up my report?

A: The GCG Whistleblowing Web Portal allows the user to access the status of his/her report for up to three years after its resolution. Until a report is resolved, the whistleblower may continue to update the report by uploading files to support the report.

Q: Has GCG tested the web portal against cyberattacks such as hacking?

A: As per the industry practices, the web portal has been tested for cyber security flaws before its launch. GCG has a modern IT infrastructure equipped with controls against cyber-attacks.

Q: How can GCG guard the confidentiality of the reports?

A: GCG only allows access of Whistleblowing Reports to authorized personnel throughout its investigation. These personnel are bound and equipped to treat all documents related to Whistleblowing Reports in strictest confidence.

The Governance Commission for GOCCs launched the GCG Whistleblowing Web Portal (www.whistleblowing.gcg.gov.ph) in an effort to provide a more accessible, reliable, and efficient channel for submitting red flags in the GOCC Sector. Senate President Franklin M. Drilon served as keynote speaker during the launch, and expressed his support towards good governance initiatives in the public sector.

The Whistleblowing Web Portal serves as an online, user-friendly, and secure platform for concerned individuals, whether from the GOCC Sector or the general public, to report to GCG perceived anomalies in the GOCC Sector. It will serve as the primary reporting channel, in addition to e-mail, postal mail, and telephone. It is GCG’s latest anti-corruption reform, intended to complement its other transparency and accountability programs, such as mandatory disclosures on the GOCC’s website and the adoption of No Gift Policies by GOCCs. The GCG hopes to encourage GOCC employees and the public to take part in strengthening integrity in the GOCC Sector.

The Governance Commission has prioritized maintaining whistleblower anonymity since the launch of GCG Memorandum Circular No. 2014-04, the Whistleblowing Policy for the GOCC Sector, in 2014. By design, the website does not require any personal information of the whistleblower to be submitted to GCG.

The website also allows whistleblowers to access the status of their report through a generated Whistleblowing ID. This Whistleblowing ID allows whistleblowers access to the status of their reports, and enables them to provide additional information.

Only authorized GCG officers are granted access to the reports, and each and every report received is treated with utmost consideration and confidentiality. Once an investigation is concluded, the Governance Commission may endorse to the appropriate government agency, such as the Office of the Ombudsman, the pursuit of criminal and/or administrative processes against the person/s complained of; or recommend to the President or to the Governing Board the removal of the concerned Appointive Directors, or officers, respectively, as the case may be. The Governance Commission may also enjoin the concerned GOCC/s to comply with applicable laws or jurisprudence, or undertake corrective measures to address the matters raised in the report.

Reports on irregularities within the Governance Commission may also be submitted to the Whistleblowing Web Portal.

Media Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

Q: What is the CPCS? Why do GOCCs have it?

A: The CPCS is one of the major human capital management reforms in the GOCC Sector towards bringing the Filipino people world class public service.

Prior to the Aquino Administration, compensation of certain GOCCs exempted from the Salary Standardization Law (SSL) was set by the Board of Directors of each GOCC with no uniform framework for the Sector. This resulted in abusive compensation practices in some GOCCs, which Executive Order No. 7, s. 2010, addressed by placing a moratorium against increases in compensation unless specifically approved by the President.

However, the other side of the problem was that many of the other GOCCs were losing many talented individuals to the private sector since compensation levels were not competitive.

Accordingly, the “GOCC Governance Act of 2011” (R.A. No. 10149) required the Governance Commission to develop a uniform framework for all GOCCs covered by the law that would enable GOCCs to attract, retain and motivate a corps of competent civil servants.

The CPCS was developed in collaboration with Towers Watson, a leading Human Resource (HR) consulting firm both locally and internationally, following a rewards philosophy that the GOCC compensation must:

• be generally competitive with the private sector doing comparable work in order to attract, engage, and retain the right talent;
• ensure reasonable, justifiable, and appropriate remuneration schemes, within affordability limits and sustainability capacities of the GOCCs; and
• provide rewards that support and encourage performance-driven, productive, and efficient organizations.

Q: Why should civil servants in GOCCs be paid rates that are competitive with the private sector? Shouldn’t public service be a noble calling and not motivated by profit?

A:  While public service shall always remain a noble calling, this principle must be balanced with the need to attract, retain and motivate the best and the brightest in light of the external pressures brought about by the highly competitive environment for talented Filipinos, both on a local and global scale.

While there are Filipinos who are more than willing to serve with little regard for competitive compensation, they are a rare breed and are generally individuals who have already achieved a satisfactory level in their personal economic situations.

Majority of the talented Filipinos are new graduates or young managers/ professionals who are starting out or in the middle of their career, and who merely seek to provide or sustain a good life for their families while also serving the Filipino people.

Accordingly, the CPCS does not make GOCC personnel paid more than everyone else. Rather, it only aligns the compensation of GOCCs personnel along the median of the market based on Towers Watson’s database of compensation for over 200,000 jobs across over 240 companies in the private sector, which is the most extensive database in the Philippines.

Q: Is it proper for GOCCs such as SSS and GSIS to be under the CPCS and have compensation that is competitive with the private sector?

A:  The position that the pay for SSS and GSIS officers should be lowered in view of the rate of pensions may be popular but is actually counter-intuitive.

GOCCs such as SSS and GSIS cannot simply rely on the contributions mandated by law. They must maintain an acceptable collection efficiency rate and invest the funds received to maintain the financial viability of its operations. This requires the GOCC to be run by competent and motivated managers and professionals who are also sought after by large companies in the private sector. Unreasonably lowering compensation would only result in the loss of talent without addressing the goal of improving the pension system. Notably, personnel expenses on average accounted for 5% and 4% of total expenses for SSS and GSIS respectively.

The key is to hold SSS and GSIS officials accountable for achieving concrete and measurable breakthroughs in improving the country’s pensions system, which is done through the GOCCs Performance Scorecards that are available for public scrutiny on the websites of both GCG and the GOCC concerned.

Q:  How will this reform the current compensation system of GOCCs?

A: The CPCS standardizes compensation in GOCCs and makes it transparent by making public the rates of salaries, allowances and benefits.

Moreover, the CPCS streamlines the number of allowances to only 5 such that the basic salary represents almost all of the total compensation of a GOCC officer or employee with no more hidden allowances or bonuses.

Guaranteed Compensation:

1. Basic salary

2. Standard allowance and benefits

(e.g. Mid-year Bonus, Year-end Bonus, rice, meal and clothing allowance)

Depending on Type of Job:

Specific Purpose Allowance (e.g. hazard pay)

Depending on Performance:

Variable Pay or Performance-Based Bonus

Q:Will all GOCCs be covered by the CPCS?

A: Only GOCCs under the jurisdiction of R.A. No. 10149 shall be covered by the CPCS.

Q:  What is the assurance that GOCCs will not abuse the CPCS?

A:  Before adopting the rates under the CPCS, each covered GOCC, acting through its Governing Board, shall adopt a Total Compensation Framework (TCF) subject to the recommendation of the Governance Commission and approval of the President. GCG shall vet the proposed Total Compensation Framework to ensure that it meets the guidelines and the same is financially viable. If the GOCC Governing Board were to add compensation beyond the approved TCF, the same would be disallowed by the Commission on Audit (COA) for being unauthorized compensation and the Board and/or the personnel receiving such unauthorized compensation would be personally liable to restitute the same.

Q:Why is the compensation of GOCC personnel different from personnel in the National Government Agencies (NGA)? Aren’t they all civil servants who should be paid based on just one uniform standard?

A: The CPCS has been developed in such a way that compensation in GOCCs is also aligned with the Salary Standardization Law (SSL) for NGAs. The reason for the current difference lies mainly in the source of funding since majority of the GOCCs can implement compensation reforms using revenues generated from their operations. NGAs, on the other hand, draw their resources from the General Appropriations Act, and must contend with the available fiscal space arising from the need to fund many other important projects and programs of government.

Q:Will the CPCS be subject to change?

A: The CPCS is subject to periodic review by the Governance Commission to ensure that it remains competitive and applicable considering changes in the financial environment. Changes will be made public prior to implementation. 

President Benigno S. Aquino III has approved the Compensation and Position Classification System (CPCS) for GOCCs through Executive Order No. 203, standardizing compensation and benefits in all GOCCs under the jurisdiction of the Governance Commission for GOCCs (GCG).

The issuance of E.O. 203 was mandated under Rep. Act No. 10149 (The GOCC Governance Act of 2011), which directed the GCG to undertake a compensation study and recommend for approval by the President a CPCS for the GOCC Sector that is reasonable and competitive with the private sector.

It will be recalled that in September 2010, President Aquino issued E.O. No. 7 that provided for a moratorium on increases in salaries, allowances, incentives and other benefits, to allow the then Task Force for Corporate Compensation (TFCC) to undertake a rationalization and compensation and position classification in GOCCs and GFIs in accordance with the guidelines provided therein. In July 2011, R.A. No. 10149 was enacted into law which mandated that the GCG, after conducting a compensation study, shall develop a Compensation and Position Classification System which shall apply to all officers and employees of the GOCCs whether under SSL or exempt therefrom, and once approved by the President shall be mandatory on all GOCCs, notwithstanding any law to the contrary.

The CPCS was developed by GCG to bring GOCCs closer to the median of the market based on a compensation study done with Towers Watson, which study benchmarked GOCC positions with 6,000 comparable jobs across over 240 companies in the private sector. Based on the study, compensation in GOCCs generally fell below the median of the comparable pay in private sector, especially for decision-makers in the higher job levels. Towers Watson also served as the same consultant in establishing the rates under SSL 4 for the National Government Agencies.

The CPCS brings all GOCCs into a common compensation framework limited to four basic types, namely: (a) basic salary; (b) standard allowances and benefits; (c) Specific Purpose Allowance that depends on the job; and (d) Variable Pay or Performance-Based Bonus (PBB). For better transparency, the bulk of compensation has been reflected in the basic salary, and the number of allowances have been streamlined to 5 types. The CPCS also increases the pressure on GOCCs to meet the performance targets negotiated with GCG as a significant portion of compensation has been allocated to the PBB.

The implementation of the CPCS is estimated to cost P4.6 billion or 0.026% of the average total corporate income of GOCCs from 2012-2015. From P81.55 billion dividend remittances in 2002 to 2010, GOCC dividend remittances reached P96.84 billion from 2011 to 2014. The implementation of the CPCS shall be subject to each GOCC’s capacity to pay, ensuring the corporation’s financial viability.

With the implementation of the CPCS, the Governance Commission intends to raise the standards even higher on performance targets from GOCCs, especially with respect to their long-term breakthrough results.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

www.gcg.gov.ph

Q: How did UCPB become a GOCC?

A:  In Philippine Coconut Producers Federation, Inc. (COCOFED), et al. v. Republic of the Philippines,[1] the Supreme Court (SC) declared that the so-called Farmers’ shares, which comprise the original 64.98% UCPB shares, and the converted 753,848,312 SMC Series 1 Preferred Shares, are conclusively owned by the Republic, and affirmed with modification its 4 September 2014 Resolution, declaring that the six Coconut Industry Investment Fund (CIIF) companies[2] are owned by the Government to be used only for the benefit of all coconut farmers and for the development of the coconut industry. In the same decision, the Court declared as well the 14 Holding Companies[3] and the converted 753,848,312 SMC Series 1 Preferred Shares to be government-owned. The formally recorded judgment or Entry of Judgment thereto was issued by the Supreme Court on 10 December 2014.

In the case of Eduardo M. Cojuangco, Jr. v. Republic of the Philippines,[4]  the Supreme Court affirmed the decision of the Sandiganbayan, nullifying the shares of stock transferred to Cojuangco and ordered the reconveyance of the 14,400 First United Bank (now UCPB) shares of stock, the additional FUB shares subscribed and paid by Philippine Coconut Authority  to Cojuangco to the Republic, and including those that were issued to the alleged fronts, nominees and dummies of Cojuangco, forming part of the 72.2% FUB/UCPB shares also paid by PCA with the use of public funds. The Entry of Judgment was issued by the Supreme Court on 1 October 2013.

Pursuant to the abovementioned Decisions, the Sandiganbayan in its Resolution dated 23 October 2015[5] ordered the PCA and Cojuangco to surrender to the Court the necessary documents to effect the transfer of the subject shares of stock in favor of the Republic and also directed UCPB to cancel the subject shares of stock and to issue the equivalent number of shares in the name of the Republic.

As held in the foregoing cases, a total of 72.2% shares of the UCPB belong to the Republic of the Philippines. As such, UCPB is a GOCC/GFI covered by R.A. No. 10149. Under Republic Act (R.A.) No. 10149, a GOCC is defined as any agency organized as a stock or non-stock corporation, vested with functions to serve the public’s needs and owned by the State either wholly or at least a majority of its outstanding capital stock.

Q: What is the role of GCG as its supervising agency?

A: The following are the roles of the Governance Commission as the supervising agency of UCPB:

1. Coordinate and monitor its operations;

2. Ensure its efficient and effective management;

3. Review and assess its functions and performance for submission to the President;

4. Recommend to the President a shortlist of suitable and qualified candidates for Appointive Directors based on the Fit and Proper Rule;

5. Recommend to the Board of Directors/Trustees of UCPB the suspension of any member of its Board for violation or non-compliance with the Ownership and Operations Manual, without prejudice to the filing of administrative and criminal charges; and

6. Recommend to the President a competitive compensation and remuneration system based on the Compensation and Position Classification System (CPCS) for GOCCs.

The turnover of UCPB to the Governance Commission does not divest the Presidential Commission on Good Government (PCGG) of its mandates under Executive Order (E.O.) No. 1 (s. 1986). PCGG retains responsibility over the following matters affecting UCPB and the CIIF Companies:

• Prosecution and defense of all pending sequestration, including putting into effect a court decree or execution of judgment, and of related cases involving UCPB and the CIIF Companies, through the Office of the Solicitor General as PCGG’s statutory counsel;
• Preservation of the assets of these GOCCs insofar as they are subject of pending litigation, including the determination of the necessity to file the appropriate cases to recover ill-gotten wealth and protect the interests of the Government therein; and
• All other pending sequestration matters.

Q: What are the other legal implications now that UCPB will be supervised by GCG?

A: The legal implications of this action are the following:

1. UCPB is now covered by the Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits.              

Under R.A. No. 10149, UCPB will now be covered by the Compensation and Position Classification System developed by the Governance Commission subject to the approval of the President. Furthermore, recommendation to the President for additional incentives to be given to UCPB’s personnel shall come from GCG.

2. Appointive Directors in the UCPB Governing Board must now be qualified by the Fit and Proper Rule and has a Term of One (1) Year.

UCPB’s Governing Board will be appointed by the President based on the list of nominees submitted by GCG and the appointees shall have a term of one (1) year unless sooner removed. The number of Appointive Directors to be vetted by the Governance Commission shall only be to the extent of the government’s shareholdings in UCPB.

The list of nominees from GCG will be qualified by the Fit and Proper Rule which is defined as the standards for determining whether a member of the Board of Directors/Trustees or CEO is fit and proper to hold a position in a GOCC which shall include, but not be limited to, standards of integrity, experience, education, training and competence.

 3. Appointive Directors are Public Officers.

As presidential appointees, the Appointive Directors are now covered by the laws on public officers such as the “Code of Conduct and Ethical Standards for Public Officials and Employees” and “Anti-Graft and Corrupt Practices Act”, and as public officers, they are required to submit their annual Statements of Assets, Liabilities and Networth (SALNs) pursuant to Article XI, Section 17 of the 1987 Constitution and Section 8 of R.A. No. 6713.

 4. Compensation of Appointive Directors shall be based on E.O. No. 24, series of 2011.             

The compensation, per diems, allowances and incentives of the members of the Board of Directors/Trustees of GOCCs shall be determined by GCG using as reference E.O. No. 24, series of 2011. The said E.O. provides that the compensation of the members of the Board shall be in the form of per diems and performance-based incentives (PBIs).

5. UCPB must now adopt a Corporate Code of Governance for GOCCs and a No Gift Policy.

In accordance with GCG Memorandum Circular No. 2012-07 or the “Code of Corporate Governance for GOCCs,” UCPB is enjoined to adopt a Manual of Corporate Governance, to be submitted to GCG for evaluation. The Code of Corporate Governance embodies and operationalizes the philosophies and best practices in public corporate governance enshrined in R.A. No. 10149. It aims to instill within the GOCC Boards and Management the principles of responsibility, transparency and accountability as public servants.

In addition, UCPB is enjoined to comply with Section 29 of GCG Memorandum Circular No. 2012-07 and adopt its own No Gift Policy, to instill the practice of unbiased professionalism in the performance of responsibilities. UCPB must submit its No Gift Policy to GCG for evaluation, and ensure its full advertisement to the community and its strict implementation inside UCPB.

Furthermore, they shall regularly submit mandatory reports to GCG including their Performance Scorecards, financial reports, implementation of the audit recommendations of COA, and compliance with commitments on servicing loans to and borrowings guaranteed by the National Government.

6. Reorganization or Streamlining of UCPB requires GCG Approval, while its Merger, Abolition, or Privatization requires GCG Recommendation and Approval by the President.

Under Section 5(a), R.A. No. 10149, the Governance Commission is given the power to determine if it is to the best interest of the State that a GOCC should be reorganized, merged, streamlined, abolished or privatized, after which, it shall:

1. Implement the reorganization, merger, or streamlining of the GOCC, unless otherwise, directed by the President; or
2. Recommend to the President the abolition or privatization of the GOCC.

Any measure, including a Capital Call on all stockholders to infuse additional capital, which may potentially result in the dilution of the Government’s stake in the bank, is tantamount to a privatization of the bank, the determination of the necessity and propriety of which falls within the powers of the Governance Commission as described above.

Having previously obtained approval by the President, and guided by the provisions of Executive Orders Nos. 179 and 180 on the inventory, privatization, reconveyance and utilization of the coco levy assets, the Governance Commission commenced the recapitalization through privatization of UCPB. The Supreme Court, however, issued a Temporary Restraining Order (TRO) in Confederation of Coconut Farmers Organizations of the Philippines, Inc. (CCFOP) v. Aquino[6] against the privatization efforts of the Governance Commission. The case is still pending and the TRO remains in effect.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

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. 

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

Q: What is the Governance Commission’s reason for proposing the merger of Landbank and DBP?

A: The consolidation of DBP and LBP is necessary as the functions or purposes of both banks duplicate and/or unnecessarily overlap with one another, which is one of the standards for implementing a merger under R.A. No. 10149.

      Also, the consolidated entity will be more effective, efficient and sustainable in carrying out the mandates of both banks, particularly in anticipation of the wave of foreign banks that may enter the Philippine market upon the occurrence of ASEAN integration in 2015.

Q: What are the overlapping functions of these banks?

A: The matrix below shows the overlap between DBP and LBP in terms of their mandate, clientele, and services/products. The highlights are as follows:

Q:What is the merger’s effect on the banks’ financial base?

A: The consolidated entity will create the 2nd largest universal bank in the country in terms of total assets at P 1.6 trillion. The surviving bank will also be 2nd in terms of deposits at P 1.2 trillion. In terms of loans and capitalization, it will be 4th at P 582 billion and P 114 billion, respectively. Thus, it shall provide a more stable and stronger base for developmental financing.

Level and Industry Rank in terms of Assets, Loans, Deposits, and Capital,

As of 30 September 2015

Q:What is the significance of the surviving bank having greater lending capacity?

A: The merger will result in a combined single borrower’s limit (SBL) of P 26 billion compared with DBP’s SBL at P 9 billion and Landbank’s at P 17 billion. A higher SBL enables the surviving bank to fund big-ticket infrastructure projects.

Q:How will the surviving bank be able to provide wider access to financial services?

A: More underserved and unbanked areas will be reached by the surviving bank through rationalization of the existing branch networks of DBP and Landbank. Planned branch openings and relocation of branches will expand the reach of the surviving bank to 298 cities and municipalities.

With its wider presence, the surviving bank can offer more financial services to OFWs, SMEs, and the agriculture-agrarian reform sector who are the natural customers of its branch network.

In addition, the surviving bank will have a total of 1,670 ATMs that can also provide access for beneficiaries of the 4Ps program.

Q:What happens to employees of the banks affected by the merger?

A: While no employees will be forced to separate from the bank, they may be reassigned to different locations or jobs. Accordingly, a Merger Incentive Plan (MIP) will be offered to employees who wish to separate from their bank in view of the change in their duties but separation and availment of the MIP will be on a voluntary basis subject to the approval of management.

Q:Which compensation system will the surviving bank follow?

A: The surviving bank will adopt the Compensation and Position Classification System (CPCS) for GOCCs. The surviving bank shall undergo reorganization prior to adoption of the CPCS to align its organization structure to the bank’s strategy in a cost effective manner.

Q:Why is there a need to increase the surviving bank’s Authorized Capital Stock (ACS)?

      A: The higher ACS is necessary to accommodate additional capital requirements in the medium to long term.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

(released 12 February, 2016)

President Benigno S. Aquino III signed on February 4, Executive Order 198 approving the merger of Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP).

The merger aims to strengthen the two state-owned banks in fulfilling their mandate of providing banking services to drive countryside development and contributing to the country’s sustainable and inclusive growth. It also creates an opportunity to optimize both banks’ business policies by choosing the best of both banks.

A stronger government bank is seen with the merger of Landbank and DBP, creating the 2nd largest universal bank in the country in terms of total assets at P 1.6 trillion. The surviving bank will also be 2nd in terms of deposits at P 1.2 trillion. In terms of loans and capitalization, it will be 4th at P 582 billion and P 114 billion, respectively.

Further, it shall enhance financing of priority projects and sectors with a more diversified portfolio that shall support both growth in agriculture, SMEs, and other priority sectors, as well as investments in infrastructure and public utilities. It shall also provide a bigger fund base with its combined capital base and total deposit base thus allowing greater lending capacity.

The now bigger state-owned bank shall provide wider access to financial services by expanding its reach to more unbanked and underserved areas. By leveraging its combined presence in cities and municipalities, it shall also enhance the delivery of products and services for the agriculture-agrarian sector, OFWs, and beneficiaries of the government’s 4Ps program. 

 E.O. 198 increases the Authorized Capital Stock of Landbank, the surviving bank, to P 200 billion. It also directs the National Government to provide a capital infusion of P 30 billion to allow room for loan growth and meet capital requirements.

GCG will begin implementation with the preparation of the integration and business plan in consultation with both banks, which is among the requirements for obtaining the approval of Bangko Sentral ng Pilipinas.

For clients and business partners of both banks, it will be business as usual under existing terms and conditions until further notice.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

Q: Why should the State own a television broadcasting company?

A: A state-owned broadcaster ensures supply of free-to-air broadcasting for the public regardless of ability or willingness to pay. It also ensures that the public is provided with welfare-enhancing programs balanced against programs driven purely by advertising and business motives.

      In 2013, the state-owned broadcast network, People’s Television Network, Inc. (PTNI or commonly known as PTV-4), was revitalized under R.A. No. 10390. The law addressed its problem of depleting capital by directing the proceeds from the privatization of the State’s equity holdings in Radio Philippines Network (RPN-9) and IBC-13 to fund the capitalization of PTV-4.

      In turn, PTV-4 is regularly monitored under the Performance Evaluation System (PES) of the Governance Commission.

      RPN-9 is a private corporation with the State only owning a minority share.

Q: What are the reasons for privatizing a GOCC?

A: Under Section 5(a) of R.A. No. 10149, the GCG shall be guided by any of the following standards for the abolition to evaluate the performance and to determine the relevance of a GOCC:

• The functions or purposes for which the GOCC was created are no longer relevant to the State or no longer consistent with the national development policy of the State;
• The GOCC’s functions or purposes duplicate or unnecessarily overlap with the functions, programs, activities, or projects already provided by a Government Agency;
• The GOCC is not producing the desired outcomes, or no longer achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical, and economic returns vis-à-vis the resource inputs;
• The GOCC is in fact dormant or nonoperational;
• The GOCC is involved in an activity best carried out by the private sector; and
• The function, purpose, or nature of operations of any group of GOCCs requires consolidation under a holding company.

Q: Why was IBC-13 privatized? Which of these criteria did the IBC-13 meet?

A:  IBC-13 was evaluated and found to meet the following criteria:

Despite being subsidized by the government, IBC-13 was found to be operating at an average net loss of P 45.26 million from 2010 to 2014.

Nonetheless, the company still has commercial value as a broadcasting company, making it a proper subject for privatization.

Q: How will the privatization proceed?

A: The privatization will be done through public bidding, which will be implemented by an inter-agency committee composed of representatives from GCG, the Presidential Communications Operations Office (PCOO), and IBC-13.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

President Benigno S. Aquino III has approved the privatization of Intercontinental Broadcasting Corporation (IBC-13) based on the recommendation of the Governance Commission for GOCCs (GCG).

IBC-13 started out in 1960 as a private company known as Inter-Island Broadcasting Corp., and then was sequestered by the Presidential Commission on Good Government (PCGG) in 1986 as part of the recovery of ill-gotten wealth. It has been one of 2 networks considered as GOCCs aside from Philippine Television Network, Inc. (PTV-4). The State also has a minority share in Radio Philippines Network (RPN-9).

The privatization rationalizes the State’s portfolio in the Communications Sector in view of the overlap with PTV-4, which is already sufficient to address market failures in the private broadcast industry such as providing programs with social value but are not considered profitable. This comes in the wake of the recent revitalization of PTV-4 mandated by Republic Act No. 10390 which identified the privatization of IBC-13 as one of the sources of funding the increase in PTV-4’s capital.

IBC-13 was also in financial distress – operating at an average net loss of P 45.26 million from 2010 to 2014 and receiving operational subsidies amounting to P23.56 million in 2015. The privatization should pave the way for infusion of additional capital to revitalize the network, which will also be able to operate with more flexibility as a private entity.

The privatization of IBC-13 will be done through public bidding with an estimated floor price of P1.977 billion. A committee composed of representatives from GCG, the Presidential Communications Operations Office (PCOO), and IBC-13 shall implement and conduct the said process.

 Since GCG’s establishment in 2011 as the central advisory and oversight body for ensuring the active exercise of the State’s ownership rights in GOCCs, it has abolished 22 nonperforming GOCCs and classified 25 more as inactive or nonoperational.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

[email protected]

www.gcg.gov.ph

(released 25 November, 2015)

Finance Secretary Cesar V. Purisima noted the improvements in the GOCC Sector four years into the GOCC Governance Act of 2011. Citing the improvements in the Sector in terms of setting performance standards and streamlining the number of GOCCs, Secretary Purisima congratulated the Governance Commission for GOCCs (GCG) during its anniversary celebration of R.A. No. 10149 on 29 October 2015.

“I am sure that if you count the number of companies that we propose to close and actually closed, this is the most ever of an administration. And that requires political will,” Sec. Purisima said. Since 2012, President Aquino has approved the abolition of 22 GOCCs based on recommendations from the Governance Commission. 14 more GOCCs are being studied for abolition, privatization, or merger. Currently, there are 102 GOCCs being monitored by the Governance Commission.

During the anniversary celebration, GCG was also conferred by the Institute for Solidarity in Asia (ISA) the Silver Trailblazer Award as it is also certified Proficient in the Performance Governance System. ISA President Francisco Eizmendi noted that “Through its [GCG] guidance, GOCCs have also started to adopt a culture founded on good governance values and principles.” Through the Performance Governance System, the organization’s vision is translated into specific and quantifiable strategies and time-bound commitments with the objective of realizing breakthrough results.

The Governance Commission was also re-certified compliant by TÜV Rheinland Philippines to the Quality Management System based on ISO 9001:2008 Standards during the event. GCG received its first certification in July 2014. TÜV Rheinland Managing Director Tristan Loveres awarded GCG saying, “All these benefits will accrue not only to your constituents but more importantly in the end to us in the public.”

Despite the notable improvements, Sec. Purisima emphasized that there are still many opportunities for reform, particularly in benchmarking GOCCs with the private sector for purposes of performance monitoring and dividend collection.

GCG Chairman Cesar L. Villanueva thanked all government agencies and other organizations who helped the Governance Commission in positioning the GOCC Sector for sustained long-term success. Also gracing the anniversary celebration were GCG’s ex officio Commissioner Budget Secretary Florencio Abad, Senator Cynthia Villar, PCGG Chairman Richard Amurao, SEC Chairperson Teresita Herbosa, CSC Chairperson Alicia Bala, and former Finance Secretary Roberto De Ocampo.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

(released 13 May, 2015)

Government-Owned or-Controlled Corporations (GOCCs) continue to post robust remittances to the national treasury according to the Governance Commission for GOCCs (GCG).

The GOCC sector handed over checks totaling P36.85 billion to President Benigno S. Aquino III in a simple ceremony entitled “2015 GOCC Day” at the Rizal Hall in Malacañang Palace today.

Forty-eight1 GOCCs, led by their respective Chairpersons and Chief Executive Officers, handed over their checks to President Aquino in the annual ceremonial turnover of GOCCs’ dividends and recognition of GOCCs’ achievements and their significant contributions to the country’s national development.

The Governance Commission said that this year’s GOCC dividends and other remittances increased from a total of P32.31 billion in 2013 to P36.85 billion in 2014.

The Landbank of the Philippines (LBP) had the highest dividends and remitted a total of P6.254 billion. The Philippine Amusement and Gaming Corporation (PAGCOR), on the other hand, had the highest total remittances at P10.137 billion. LBP and PAGCOR are joined by 8 more GOCCs in the Billionaires’ Club – an elite class of contributors that have declared P1 billion or more in dividends.

This year’s Billionaires’ Club include: Bases Conversion Development Authority (BCDA) with P3.201 billion; Development Bank of the Philippines (DBP) with P3.135 billion; Food Terminal, Inc. with P2.305 billion; Philippine Deposit Insurance Corporation (PDIC) with P2.1 billion; Philippine Ports Authority (PPA) with P1.822 billion; Philippine National Oil Company (PNOC) with P1.525 billion; Manila International Airport Authority (MIAA) with P1.339 billion; and Philippine Reclamation Authority with P1.2 billion.

GOCCs are required to declare and remit at least 50% of their income as dividends to the National Government pursuant to Republic Act No. 7656. The Department of Finance (DOF) started the celebration of the GOCC Day in 2011. Since 2012, the Governance Commission has continued the tradition of the annual ceremonial turnover over of GOCCs’ dividends and recognition of other GOCCs that made significant contributions to national development.

To view the complete list of remitting GOCCs, click here.

_________________

1 Excluding the Tourism Infrastructure and Enterprise Zone Authority that did not attend the 2015 GOCC Day.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

feedback@gcg.gov.ph

www.gcg.gov.ph

See the complete details of the 2014 GOCC Operating Subsidies and Program Funds here.

Q: What are the reasons for abolishing a GOCC?

A: Under Section 5(a) of R.A. No. 10149, the GCG shall be guided by any of the following standards for the abolition to evaluate the performance and to determine the relevance of a GOCC:

• The functions or purposes for which the GOCC was created are no longer relevant to the State or no longer consistent with the national development policy of the State;
• The GOCC’s functions or purposes duplicate or unnecessarily overlap with the functions, programs, activities, or projects already provided by a Government Agency;
• The GOCC is not producing the desired outcomes, or no longer achieving the objectives and purposes for which it was originally designed and implemented, and/or not cost efficient and does not generate the level of social, physical, and economic returns vis-à-vis the resource inputs;
• The GOCC is in fact dormant or nonoperational;
• The GOCC is involved in an activity best carried out by the private sector; and
• The function, purpose, or nature of operations of any group of GOCCs requires consolidation under a holding company.

Q: Which of these criteria did the 7 abolished GOCCs meet/ why were these GOCCs abolished?

A:  The 7 GOCCs were evaluated and found to meet the following criteria:

Q: How will the abolition proceed?

A: The GCG shall convene a Technical Working Group (TWG) per GOCC consisting of officials of the GOCC’s Supervising Agency and/or Parent GOCC and the Securities and Exchange Commission (SEC) to implement the abolition. The responsibilities of the TWG are as follows:

• Work on winding down the operations of the GOCC.
• The Supervising Agency or Parent GOCC shall coordinate and/or supervise the transfer of programs and functions of the GOCC.
• The parent GOCC shall take over the assets, program, and functions of the GOCC. It shall also be responsible for the payment of liabilities out of the proceeds from the sale of assets and assumption of remaining liabilities. Furthermore, it shall implement the separation package for affected employees, in accordance with the pertinent provisions of the Labor Code and the GOCC’s personnel policy.
• The SEC shall provide technical support and ensure that the winding down of operations be in accordance with the provisions of the Corporation Code of the Philippines.

Q:What will happen to the affected employees?

A: For PNOC subsidiaries, PNOC shall determine the necessity to absorb, including option to reorganize if necessary, their affected employees. PNOC-AFC and PNOC-DMC have allocated benefits totaling to P12.61 million and P9.87 million respectively for its affected employees.

      As for PNCC subsidiaries, only 3 GOCCs have at most 6 employees as these GOCCs are already in the process of winding down or are already nonoperational. Affected employees were already being granted their separation benefits. These remaining employees work on the monitoring of remaining assets and will receive separation benefits.

Q:How much will be gained or saved from these abolitions?

A: The abolition of PNOC subsidiaries will result to approximately P 210 million[1] in annual cost savings. PNCC on the other hand will gain a minimum of P 445.85 million[2] upon closure of its 5 subsidiaries.

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

More nonperforming and dormant GOCCs have been abolished as President Benigno S. Aquino III approved last August the closure of seven GOCCs following the recommendation of the Governance Commission for GOCCs (GCG), which is the primary regulatory agency for the country’s GOCCs. Under Republic Act 10149, the law which created it, the GCG is mandated to evaluate the performance of GOCCs and determine their relevance with current national development goals and economic realities.

The seven GOCCs facing closure are: PNOC Alternative Fuels Corporation (PNOC-AFC), PNOC Development and Management Corporation (PNOC-DMC), Alabang-Sto. Tomas Development Incorporated (ASDI), DISC Contractors Builders and General Services Incorporated (DCBGSI), Traffic Control Products Corporation (TCPC), CDCP Farms Corporation (CDCP-FC), and Tierra Factors Corporation (TFC). The first two are subsidiaries of the state-owned Philippine National Oil Company (PNOC) while the latter five are subsidiaries of the Philippine National Construction Corporation (PNCC).

PNOC-AFC and PNOC-DMC were recommended for abolition in the third quarter of this year as they are no longer achieving the objectives and purposes for which they were originally designed. ASDI, DCBGSI, CDCP-FC, TCPC, and TFC, on the other hand, were abolished since they were non-operational corporations.

The Governance Commission will convene inter-agency Technical Working Groups (TWGs) that will implement the abolition/dissolution such as: winding down of operations, disposition of assets and liabilities, closing of books, and the transfer of functions. Affected officers and employees will be given due benefits and separation pays pursuant to civil service rules and other existing laws.

For PNOC, the GCG expects that the closure of its two subsidiaries will mean improved efficiency in operations and annual cost savings of P210 million. On the other hand, PNCC is expected to gain at least P237 million with the dissolution of its non-performing subsidiaries.

Since its establishment as the government’s central advisory and oversight body over the public corporate sector in 2011, the GCG now has abolished 20 dormant or nonperforming GOCCs and has classified 20 more as inactive or nonoperational. It continues to study and monitor GOCCs to ensure that the sector becomes a significant tool for economic growth and development.

Contact: Bea Nadine V. Barte  (02) 328 – 2030 to 34  bnvbarte@gcg.gov.ph  www.gcg.gov.ph

The Governance Commission for Government-Owned and Controlled Corporations (GCG) achieved its quality management system certification based on ISO 9001:2008 Standards last July 4, 2014 from TUV Rheinland Philippines, Inc.

GCG began working in January 2014 towards the ISO 9001:2008 certification of all of its processes, namely: (1) corporate policies and standards development, (2) corporate governance services, (3) legal services, and (4) administration and finance.

”Since its constitution, the Governance Commission has made it a point to set and commit its officers and staff to espouse professionalism in fulfilling its mandate, and the certification of compliance to ISO 9001:2008 is a manifestation that the core values of the Governance Commission are being put into good practice,” shared GCG Chairman Cesar L. Villanueva during the formal conferment of the certificate.

 Chairman Villanueva also stressed that GCG shall not ask of GOCCs that itself cannot do, “It is our ending goal to be exemplary public servants. Simply put, let us always walk the talk.” Since 2013, the Governance Commission has required all GOCCs to pursue ISO certification by 2016 at the latest.

TUV Rheinland Philippines, Inc. attested GCG’s compliance with ISO 9001:2008 Quality Management System Standard with the scope of “Provision of corporate policies and standards development and corporate governance services” after a 4-month process.

Chief Operating Officer Engineer Tristan Arwen G. Loveres awarded the certificate and pointed out that “To the general public, an ISO certification is simply a label for quality…however, the certification must be considered as a convincing and powerful testimony to the nobility of the vision of the officials, officers and staff of GCG– and the discipline, which order demands.”

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

The Institute for Solidarity in Asia (ISA), a non-government organization advocating good governance as a shared responsibility, conferred the Governance Commission for GOCCs (GCG) last June 6, 2014 with the Silver Trailblazer Award for accomplishing the Compliance Stage in ISA’s program for institutionalizing its Performance Governance System (PGS).

The PGS program consists of four stages: Initiation, Compliance, Proficiency and Institutionalization. Through the PGS, the organization’s vision is translated into specific and quantifiable strategies and time-bound commitments with the objective of realizing breakthrough results. GCG presented its plans and accomplishments during the revalida to a panel headed by Mr. Rex C. Drilon II of ISA and consisted of the following members: Hon. Cesar B. Bautista (ISA), Mr. Ruy Y. Moreno (National Competitiveness Council), Mr. Arthur Florentin (Center for Innovation, Change, and Productivity), Ms. Evelyn R. Singson (ISA), Mr. Edgardo Morada (Fellowship of Christians in Government), and Dr. Francisco Magno (Jesse Robredo Institute, De La Salle University). The Governance Commission aims on completing the program and obtaining the Institutionalization Certification by 2016.

GCG Chairman Cesar L. Villanueva, together with Finance Secretary Cesar V. Purisima and Commissioners Ma. Angela E. Ignacio and Rainier B. Butalid, received the Heart Medallion and Silver Trailblazer Award from ISA Chairman Dr. Jesus P. Estanislao during GCG’s 3^rd year Anniversary Celebration of the GOCC Governance Act of 2011. The Silver Governance Trailblazer award is granted to government agencies that garnered a score of 8.5 or higher during the public revalida or performance report.

The public can view the Governance Commission’s strategy map and performance scorecard at www.gcg.gov.ph, which shows how the agency plans to raise the service delivery and financial performance standards of GOCCs and contribute more effectively to the President’s agenda of inclusive growth and development. 

Currently, the Governance Commission is also rolling out its own program for institutionalizing an equivalent performance governance system in GOCCs known as the Performance Evaluation System (PES) for GOCCs. 

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) is set to start the second annual Performance Agreement Negotiations (PAN) with GOCC Boards beginning August 2014. This requires GOCCs to make strategy maps and performance commitments for CY 2015 on how they will achieve breakthrough results and contribute to the President’s development agenda through their respective mandates.

The PAN embodies one of GCG’s mandates to institutionalize a performance-oriented culture in the GOCC Sector by creating performance scorecards for each GOCC. Performance indicators must strategically focus on measuring the financial viability and social impact of a GOCC.

Accordingly, all GOCCs have been required to measure their Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margins. On the other hand, social security institutions such as the Social Security System (SSS) and Pag-IBIG will instead track their Net Profit margins in order to monitor both financial viability and the pay-out of benefits to their members.

For service delivery, all GOCCs must have customer and/or stakeholder satisfaction surveys conducted by independent third parties from the private sector. GOCCs can also propose other performance indicators for their respective operations. The determination of breakthrough results will be based primarily on historical performance for each measure.

Together with a GOCC’s compliance with Good Governance Conditions such as the filing by all officers and employees of their Statement of Assets, Liabilities and Net Worth (SALN) and compliance with anti-red tape statutes and transparency guidelines, the Performance Evaluation System (PES) serves as basis for the granting of GOCCs’ Performance-Based Bonus (PBB) for officers and employees and Performance-Based Incentive (PBI) for their directors.

Performance scorecards of specific GOCCs can be viewed by the public on GCG’s website, www.gcg.gov.ph. The Governance Commission also invites everyone to participate in the performance evaluation of GOCCs by sending their comments or suggestions on the current measures and targets of the GOCCs to feedback@gcg.gov.ph.

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) has moved closer to its landmark goal of institutionalizing transparency and accountability in the GOCC sector.

The GCG which was created last June 2011 to oversee and regulate the public corporate sector is preparing to launch its Integrated Corporate Reporting System (ICRS), a sector-wide uplink of crucial data and information on all GOCCs. When launched, the comprehensive database will feature all the necessary data on all GOCCs under the Governance Commission’s jurisdiction, regardless of size.

Mandated under Republic Act No. 10149, which created the GCG and its Code of Corporate Governance, the ICRS will be the Governance Commission’s key policy tool in pursuing good governance, transparency and accountability in the GOCC sector.

Last May 5 to 15, 2014 the GCG has started its training of officers and personnel from various GOCCs in the use of ICRS through its ICRS orientation workshops.

GCG Commissioner Angela Ignacio stated that “The ICRS will serve as the central web portal and database for all information and reports on the GOCC Sector.” Once publicly launched, this would be the central repository of GOCCs’ financial information, including financial statements and corporate operating budgets, and of non-financial information such as GOCC Charters, Performance Scorecards, and Organizational Structures. Information on GOCCs’ incumbent Appointive Directors would also be included in the system.

273 representatives from 91 GOCCs attended the ICRS training slated for 8 days at the GCG’s office in Makati. GCG together with the ICRS developers –Sagesoft Solutions, Inc., discussed the ICRS’s background and purpose and trained the GOCC representatives in using the system to input financial and non-financial information regarding the GOCC.

As a stepping stone towards streamlining the various reportorial requirements for GOCCs, both GCG and the GOCCs work together in continuously enhancing the system and inputting relevant data that would be useful not only within the GOCC sector but also for the general public.

The development of the ICRS is mandated under Section 5(c)(6) of the “GOCC Governance Act of 2011” (R.A. No. 10149). Consequently, GOCCs are required to become “an active and responsible member and contributor to the ICRS” under Section 4 of the Code of Corporate Governance for GOCCs (GCG MC No. 2012-07).

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

The number of Government-Owned-or Controlled Corporations (GOCCs) that remit earnings, or dividends, to the national coffers continue to increase according to the Governance Commission for GOCCs (GCG).

In simple rites held this morning, chairpersons and chief executive officers of various GOCCs personally handed remittance checks to President Benigno S. Aquino III in a ceremony marking GOCC Day at the Rizal Hall, Malacañan Palace.

GCG, the central advisory body that monitors and oversees the GOCC Sector, said that the number of GOCCs that have declared dividends increased from 38 in 2012 to 50 in 2013.

The GOCC sector remitted a total of P 32.31 billion worth of dividends and other remittances for the past year. Land Bank of the Philippines (LBP) had the highest dividends remitted with P 6.298 billion. Philippine Amusement and Gaming Corporation (PAGCOR), on the other hand, had the highest total remittances at P 9.791 billion. 7 GOCCs are also included in the elite class of contributors, or the so called “Billionaires’ Club,” that have declared P 1 billion or more in dividends.

This year’s Billionaires’ Club include: Development Bank of the Philippines (DBP) with P 3.616 billion; Power Sector Assets & Liabilities Management Corporation (PSALM) with P 2.5 billion; Bases Conversion Development Authority (BCDA) with P 2.107 billion; Manila International Airport Authority (MIAA) with P 1.577 billion; Philippine National Oil Company-Exploration Corporation (PNOC-EC) with P 1.5 billion; Philippine Ports Authority (PPA) with P 1.422 billion; and Philippine Deposit Insurance Corporation (PDIC) with P 1.05 billion.

GOCCs are required to declare and remit at least half of their income as dividends to the National Government under R.A. No. 7656. The Department of Finance (DOF) started the celebration of the GOCC Day in 2011. Since 2012, GCG has continued the tradition of the annual ceremonial turnover over of GOCCs’ dividends and recognition of other GOCCs that made significant contributions to national development.

To view the complete list of remitting GOCCs, click here.

Contact:

Bea Nadine V. Barte

(02) 328 – 2030 to 34

bnvbarte@gcg.gov.ph

www.gcg.gov.ph

The Governance Commission for GOCCs (GCG) marked its third anniversary celebrations today as the central advisory body that monitors and oversees Government-Owned or Controlled-Corporations (GOCCs).

Foremost among these were issues of unregulated bonuses and salaries granted by GOCC boards to their executives and directors as well as charges of graft and corruption in other GOCCs.

Highlighting today’s simple anniversary rites at the GCG headquarters at the Citibank building in Makati was its conferment of the Silver Trailblazer Award from the Institute of Solidarity in Asia (ISA) for accomplishing its Performance Governance System (PGS) Compliance Stage. The PGS translates the organization’s vision into specific and quantifiable strategies and commitments. 

Senate President Franklin M. Drilon, one of the principal authors of R.A. No. 10149, graced the third anniversary celebration as guest speaker. In his speech, Sen. Drilon congratulated GCG for its milestones and achievements it has accomplished in such a short span of time. 

Among these were the regulatory and policy milestones which the GCG has instituted in the hitherto unregulated GOCC sector. These included the coming out of a Fit and Proper Rule for GOCC directors and officers, the institution of the Code of Corporate Governance, Ownership and Operations Manual for the entire GOCC sector, the initiation of performance scorecards and various good governance conditions for its directors and officers.

Also this year the GCG recommended the abolition of 23 non-performing GOCCs. Out of the 23, 11 GOCCs have already been approved by President Benigno Aquino III for closure. 

Abolition, reorganization, mergers, and privatization of GOCCs form part of the GCG mandate of evaluating the performance of GOCCs and in determining their socio-economic relevance relative to the country’s development goals. 

Also with the cooperation of the Securities and Exchange Commission (SEC), the GCG recently initiated the dissolution of 14 Non-chartered GOCCs by way of the expiration of their corporate terms.

Also with the cooperation of the Securities and Exchange Commission (SEC), the GCG recently initiated the dissolution of 14 Non-chartered GOCCs by way of the expiration of their corporate terms.

In time for its anniversary, GCG also launched its new official website which can be accessed through www.gcg.gov.ph. The new website contains the most recent news about GCG and updates on various information on GOCCs under GCG’s jurisdiction. 

The GCG is headed by Chairman Cesar L. Villanueva, Commissioners Ma. Angela E. Ignacio and Rainier B. Butalid. Its two ex officio members are Finance Secretary Cesar V. Purisima, and Budget Secretary Florencio Abad.

Civil Service Commission (CSC) Chairman Francisco T. Duque III, Securities and Exchange Commission (SEC) Commissioner Ephyro Luis B. Amatong, Government Corporate Counsel Justice Raoul C. Creencia, Deputy Ombudsman Gerard A. Mosquera, and Usec. Reynaldo P. Cruz also graced the celebration.

GCG’s partners in the transformation of the Government Corporate Sector such as the Insitute of Corporate Directors (ICD) President and CEO Ricardo Nicanor Jacinto and the Institute for Solidarity in Asia (ISA) Chairman Jesus P. Estanislao, were also present at the event. The Philippine chapter of international anti-corruption watchdog, Transparency International, represented by Chairperson Dolores Español was also in attendance. 

GCG will also spearhead the GOCC Dividends and Recognition Day on June 9, 2014 at the Malacanang Palace which will be graced by President Benigno Aquino III. The event will be highlighted by the remittance of 47 GOCCs remitting close to P33 billion in dividends. By 2013, the GOCC Sector covered by R.A. No. 10149 had a total aggregate asset of P 5.7 trillion and a consolidated net income of P 131 billion.

Contact:
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

The rising crusade against corrupt government officials and employees got another boost today with the launching of a whistleblowing system against corrupt officials and workers within Government –Owned-or-Controlled Corporations (GOCCs).

In a short ceremony, the Governance Commission for GOCCs (GCG) officially launched a new memorandum circular that allows the forwarding of information on any wrongdoing in the GOCC sector. 

Anchored on Memorandum Circular No. 2014-04, or the “Whistleblowing Policy on the GOCC Sector,” which GCG issued on May 30, 2014, the whistleblowing system provides an ideal avenue for any potential whistleblower to report corruption in any GOCC, or other misdeeds committed by GOCC officials or employees. The system allows the submission of information either openly or anonymously. 

The GCG whistleblowing system will provide potential whistleblowers easy access to GCG communication lines as well as various reporting channels, such as the GCG website, confidential meetings with authorized GCG officers, email, mail, short messaging system, telephone, and fax. A committee comprised of GCG officers and lawyers will be set up to handle and process whistleblowers’ information. The system also allows the GCG to assist whistleblowers from retaliatory actions for the information they provided. 

By encouraging citizens to come forward and provide information, the whistleblowing system provides the GCG with another arsenal in its campaign to institute transparency and good governance in the GOCC sector. Aside from the traditional judicial institutions, Filipinos now have an additional venue for reporting misdeeds among GOCC directors, officers, employees, consultants or contractors whether these are corrupt practices, unethical acts, deeds that go against good government principles, or those that promote unsound public corporate practices. 

The Whistleblowing Policy is only the latest a string of good governance and regulatory policies created by the GCG since it was conceived in 2011 as the central advisory body that monitors and oversees the public corporate sector. 

In keeping with its role as model and beacon of good governance in the corporate sector, the Whistleblowing Policy will also apply to the chairman, commissioners, officers and employees, of the GCG.  

Whistleblowing Reporting Channels

GCG Website: http://www.gcg.gov.ph/
Face-to-face meetings: authorized GCG officers 
Email: feedback@gcg.gov.ph 
Mail: 3/F Citibank Center 8741 Paseo De Roxas, Makati City, Philippines 1226 
Telephone: (632) 328-2030 to 33 
Fax: (632) 328-2030 to 33 
 
Contact: 
Bea Nadine V. Barte 
(02) 328 – 2030 to 34 
bnvbarte@gcg.gov.ph 
www.gcg.gov.ph

In the last quarter of 2013, President Benigno S. Aquino III already approved the abolition of five (5) of the 19 GOCCs proposed for abolition in House Bill 3807 by Representatives Rufus Rodriguez and Maximo Rodriguez, namely: National Agribusiness Corp. (NABCOR), Zamboanga del Norte Rubber Estate Corp. (ZREC), Human Settlements Dev’t. Corp. (HSDC), Philippine Forest Corp. (PFC), and Cottage Industry Technology Center (CITC).

The Governance Commission also recommended the abolition/privatization of another seven (7) out of the 19 GOCCs cited in the Rodriguez bill: Marawi Resort Hotel Inc. (MRHI), Philippine Aerospace Dev’t Corp. (PADC), NDC-Philippine Infrastructure Corporation, Batangas Land Co., Kamayan Realty Corp., GY Real Estate, Inc., Pinagkaisa Realty Corp., together with Technology Resources Center (TRC) which is covered by the Bayan Muna recommendation.

The other six (6) GOCCs covered in the Rodriguez bill (Banaue Hotel and Youth Hostel, BCDA Management and Holdings, Inc., Masaganang Sakahan, Inc., Northern Foods Corp., Tourism Promotions Board [referred to as Philippine Convention and Visitors Corp.], and Trade and Investment Development Corp. [now PhilEXIM]) are part of the GCG’s regular sector-wide evaluation of GOCCs based on financial viability and relevance to current national development plans, together with National Livelihood Dev’t Corp. (NLDC) which was also covered by the Bayan Muna recommendation. Freeport Services Corp., a subsidiary of the Subic Bay Metropolitan Authority (SBMA), is outside the jurisdiction of the Governance Commission.

President Aquino also approved the abolition of the following six (6) GOCCs not appearing in the bill: Southern Philippines Dev’t. Authority (SPDA), Philippine Fruits and Vegetables Corporation (PFVC), San Carlos Fruits Corporation (SCFC), Philippine Agricultural Development and Commercial Corporation (PADCC), Bataan Technology Park, Inc. (BTPI), and PNOC Shipping and Transport Corporation (PNOC-STC).

The Governance Commission has also recommended for abolition / privatization the following five (5) GOCCs: Alabang Sto. Tomas Development, Inc. (ASDI), Tierra Factors Corp. (TFC), Traffic Control Products Corp. (TCPC), DISC Contractors, and CDCP Farms Corporation.

Finally, the following fourteen (14) GOCCs were actually dissolved-by-expiration-of-corporate-term/ rendered non-operational/ liquidated under the direction of the Governance Commission: Manila Gas Corp. (MGC), PNOC Malampaya Corp. (PNOC-MC), Aviation Services and Training Institute (ASTI), Calauag Quezon Province Integrated Coconut Processing Plant (CQPICPP), Clark Polytechnic Dev’t Corp. (CPDF), First Centennial Clark Corporation (FCCC), GSIS Properties, Inc., LBP Financial Services SpA, LBP Remittance Company, LBP Singapore Representative Office, Paskuhan Dev’t., Inc., Phil. Centennial Expo ’98 Corp., Philpost Leasing and Financing Corp. (PLFC), and Metro Transit, Inc. (MTI).

There are currently one hundred sixteen (116) GOCCs actively being monitored, which GCG aims to reduce to less than 100 by the end of 2014 through abolition, privatization or merger. The streamlining of non-performing and/or unnecessary GOCCs is a key objective in GCG’s strategic roadmap to improving efficiency and transforming the GOCC Sector into a significant tool for economic growth and development.

Affected employees are given separation pay amounting to around one month’s salary for every year of service, unless an administrative or criminal case is failed against them.

Contact:
Ms. Bea Nadine V. Barte
(02) 328 – 2030 to 34
bnvbarte@gcg.gov.ph
www.gcg.gov.ph

President Benigno S. Aquino approved last month the abolition of three non-performing GOCCs following the recommendation of the Governance Commission for GOCCs (GCG), which is mandated to regulate the country’s GOCCs.

The three GOCCs are Philippine Forest Corporation (PFC), ZNAC Rubber Estate (ZREC), and the National Agri-Business Corporation (NABCOR). The recommendation for their abolition was made in the third quarter of last year following the GCG’s regular sector-wide evaluation of GOCCs based on financial viability and relevance to current national development plans.

PFC and ZREC were some of the GOCCs cited in recent media reports as being conduits of spurious PDAF allocations linked to the Janet Lim-Napoles pork-barrel scam. On the other hand, NABCOR was found to be a non-performing GOCC that has been operating at a loss.

The GCG’s regular evaluation of GOCCs also showed that the three GOCCs were no longer performing the purpose for which they were created, had negligible social impact and were not financially viable.

The presidential clearance will mean the creation of a Technical Working Group (TWG) to pave the way for the: winding down of operations, disposition of assets, liabilities, closing of book accounts, and the transfer of assets and functions. Affected employees are given separation pay pursuant to civil service rules and regulations, unless they are found to have participated in graft and/or corrupt acts in which case the separation package may be withheld pending the investigation and/or prosecution. The Commission turns over any findings of this nature to the Ombudsman pursuant to the Memorandum of Agreement executed by the two agencies.

Currently, the GCG is studying the abolition of more GOCCs as part of its broad mandate, which includes merging, reorganizing, streamlining, and privatizing GOCCs.

President Benigno S. Aquino approved last month the abolition of three non-performing GOCCs following the recommendation of the Governance Commission for GOCCs (GCG), which is mandated to regulate the country’s GOCCs.

The three GOCCs are Philippine Forest Corporation (PFC), ZNAC Rubber Estate (ZREC), and the National Agri-Business Corporation (NABCOR). The recommendation for their abolition was made in the third quarter of last year following the GCG’s regular sector-wide evaluation of GOCCs based on financial viability and relevance to current national development plans.

PFC and ZREC were some of the GOCCs cited in recent media reports as being conduits of spurious PDAF allocations linked to the Janet Lim-Napoles pork-barrel scam. On the other hand, NABCOR was found to be a non-performing GOCC that has been operating at a loss.

The GCG’s regular evaluation of GOCCs also showed that the three GOCCs were no longer performing the purpose for which they were created, had negligible social impact and were not financially viable.

The presidential clearance will mean the creation of a Technical Working Group (TWG) to pave the way for the: winding down of operations, disposition of assets, liabilities, closing of book accounts, and the transfer of assets and functions. Affected employees are given separation pay pursuant to civil service rules and regulations, unless they are found to have participated in graft and/or corrupt acts in which case the separation package may be withheld pending the investigation and/or prosecution. The Commission turns over any findings of this nature to the Ombudsman pursuant to the Memorandum of Agreement executed by the two agencies.

Currently, the GCG is studying the abolition of more GOCCs as part of its broad mandate, which includes merging, reorganizing, streamlining, and privatizing GOCCs.

Contact: Bea Nadine V. Barte  (02) 328 – 2030 to 34  bnvbarte@gcg.gov.ph  www.gcg.gov.ph

We are holding this press conference pursuant to the commitment undertaken by GCG to report on the final responses of the GOCCs and the Commission’s own evaluation on the news item that covered the COA report that various GOCCs granted unauthorized allowances, bonuses and benefits amounting to P2.313 billion.

The process undertaken by GCG leading to this afternoon’s proceedings were to evaluate again the four month old COA report issued in September 2013 and direct GOCCs covered in the report to respond to the items pertaining to them.

GCG HAS NOT APPROVED ANY INCREASE IN COMPENSATION

We first like to cover various press statements to the effect that GCG has granted or approved generous compensation packages and bonuses for GOCC directors, officers and rank-and-file employees.

Apart from putting into effect the Performance-Based Bonus (PBB) for officers and employees directed by the President under E.O. No. 80, s. 2012, and the grant of Performance-Based Incentives (PBI) for Appointive Directors pursuant to E.O. No. 24, s. 2011, GCG has not granted or authorized, much less has it recommended to the President, any increase in the rates of compensation, bonuses, allowances, and other benefits within the GOCC Sector. In fact, it has consistently denied various applications made for such increase in rates, including those that resulted from collective bargaining processes. Such position is in line with the moratorium on any such increases provided by the President in E.O. No. 7.

GENERAL FRAMEWORK

Our evaluation of the items found in the COA report shows that since September 2010, no increases or new benefits were authorized within the GOCC Sector as a result of President Aquino’s E.O. No. 7 mandating a moratorium on increases in salaries, allowances, incentives and other benefits within the GOCC Sector, unless specifically authorized by the President himself.

Therefore, the bulk of the COA-reported unauthorized allowances, bonuses and benefits amounting to P2.313 billion granted to 30 GOCCs relate to practices or existing rates that were carried over from the previous administration, and were therefore inherited by the GOCC Governing Boards appointed by the current Administration.

The current GOCC Boards were confronted with a basic dilemma on how to discontinue the grant of the unauthorized salaries, benefits and bonuses of their officers and employees without disrupting public service. This situation was further exacerbated in a number of cases where the legal positions taken on the grants were contrary to the COA position.

When the GCG was constituted in October 2011, the work that it had to undertake in this area was to sort out the legal issues involved such as the claim of employees for non-diminution of benefits granted, resolution of the alleged fiscal autonomy that Governing Boards had over their compensation framework of their officers and employees, and firming up the proper application of the doctrine of good faith that favors non-restitution on the part of employees.

The COA report was issued in September 2013, when such issues were still in the process of being individually sorted out by GOCCs with COA. We note that there is not a single final notice of disallowance covered in the COA report.

Although no final notice of disallowance has yet been issued against the GOCCs mentioned in the report, GCG required all GOCCs in their 2013 Performance Agreements to submit concrete and time-bound action plans for addressing audit observations from COA in order that the fitness of the members of the Governing Boards may already be evaluated.

INDIVIDUAL GOCC EVALUATION

We will now proceed to address in brief the points raised in the news article, our evaluation of the COA report, as well as the responses we have received from the GOCCs and we affirm.

1. Philippine Health Insurance Corporation (PhilHealth)

The news report identified the unauthorized grant to be P1.45 billion, but our reading of the COA report indicates that it is a higher figure of P1.6 Billion, which covered increases in salaries, allowances and benefits pursuant to a formal resolution adopted by the PhilHealth Board.

A notice of disallowance was issued by COA, on the ground that such increases were done without presidential approval. The matter is under appeal on the ground that the PhilHealth Charter (R.A. No. 7875) grants to its Board the power to provide for a compensation framework.

PhilHealth has actually presented lately documents providing for presidential approval in the past administration to exercise autonomy in determining their compensation framework, which were also presented to COA. PhilHealth President, Atty. Alex Padilla, has issued a press statement that they will defend such legal position all the way to the Supreme Court.

We take this opportunity to deny the press statements to the effect that GCG has approved the increases in the rates of compensation, bonuses and allowances for PhilHealth officers and employees. Pursuant to the moratorium mandated under E.O. No. 7, it is not within the authority of GCG to approve any increase in the rates of compensation, bonuses and allowances on its own.

Under the circumstances, GCG is duty-bound to await the final decision of the courts on the matter.

2. Development Bank of the Philippines (DBP)

The news report that P216.801 million is consistent with the figure appearing in the COA report and covered by an Audit Observation. The amount actually pertained to the 2012 PBB, which according to the COA report does not follow the formula provided in GCG’s Memorandum Circular (GCG MC No. 2012-11).

DBP had an OP approved compensation framework that provided for a performance-based incentive system. The records will show that the GCG had in fact confirmed the grant. We had therefore directed the DBP Governing Board to resolve the matter with COA.

3. Philippine Charity Sweepstakes Office (PCSO)

The news report of P54.829 million actually refers to two figures in the COA report: P51.85 million pertaining to the grant of weekly draw allowances and Cost of Living Allowances to the Officers and Employees, and P2.53 million pertaining to salaries, allowances and benefits received by the Board contrary to E.O. No. 24.

The grants were actually a carry-over from the practices under the previous administration, and for which GCG had in fact refused to issue a post facto clearance. The records indicate that PCSO has appealed the COA Notice of Disallowance.

GCG respects the position of the COA on the matter, and that in fact it had denied the grant of PBI to the Board for 2012 for failing to comply with the Notice of Disallowance.

4. Home Development Mutual Fund (Pag-IBIG)

The news report of P37.636 Million pertains to the payment of the Early Retirement Incentive Plan (ERIP), which is contrary to the COA report that lumps it into the compensation bonuses and benefits received by Pag-IBIG officers and employees.

Although the ERIP was granted prior to the constitution of the GCG, we do confirm that it may constitute a valid separation package for officers and employees who are affected by a reorganization undertaken by a government agency.

Pag-IBIG’s management has been instructed to sort out and resolve the matter with COA.

5. Development Academy of the Philippines (DAP)

The news item amount of P23.838 million does not appear anywhere in the COA report, and instead, what appears therein is COA’s observation that certain positions filled-up by DAP were not the ones authorized by DBM in their plantilla.

DAP President Antonio Kalaw confirms that they have not received any COA audit observation, much less a notice of disallowance, for any unauthorized bonuses or allowances.

6. Philippine National Oil Company – Exploration Corp. (PNOC-EC)

The news item amount of P14.518 million pertains to the grant in 2012 of Performance Incentive Pay (PIP) to employees, and gasoline allowance to incumbent managers. The COA report states that the PIP granted since 2007 were in violation of Administrative Order No. 103, s. 2004, and Memorandum Order No. 20, s. 2001, which were austerity measures adopted for the government sector.

GCG denied the request of PNOC-EC to recommend post facto approval of the benefits, pursuant to the Commission’s policy not to grant requests for ex post facto approval from GOCCs.

7. Mactan Cebu International Airport Authority (MCIAA)

The news item amount of P14.406 million pertains to the release of 2011 CNA benefits, notwithstanding the absence of a duly approved CNA and non-compliance of the other requisites in the grant of the same.

GCG confirms that the grant of CNA incentives should be deferred until full compliance with the requirements for its release.

8. GOCCs Without News Item Amounts

The following GOCCs were included in the news report without specification of the amounts involved. Our verification confirms the following: 

• Bases Conversion and Development Authority (BCDA)
• Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
• Veterans Federation of the Philippines (VFP)

For BCDA, TIEZA and VFP, there were no amounts in the COA report, and they confirmed that none of them are aware of any audit observation, much less have received a notice from disallowance from COA referring to compensation, bonuses or allowances.

GCG has directed their Governing Boards to clarify the matter with COA.

9. Civil Aviation Authority of the Philippines (CAAP)

The COA report indicates an amount of P125.092 million pertaining to the payment of performance enhancement allowances for CAAP officers and employees in 2012.

The grant was covered by a CAAP board resolution without the legally-required presidential approval. In their Performance Agreement with GCG, the CAAP Board was bound to undertake concrete and time-bound action plans to address COA audit observations.

10. Clark International Airport Corporation (CIAC)

The COA reports an amount of P1.212 million covering insurance premiums for medical coverage for 2012 – 2013. CIAC is asserting that it has been giving this group life insurance since 2002 and it forms part of their CBA. CIAC has appealed this audit observation with COA.

In their Performance Agreement with GCG, the CIAC Board was bound to undertake concrete and time-bound action plans to address COA audit observations.

11. Human Settlements Development Corporation (HSDC)

The COA report figure of P8.713 million pertains to the grant of rice subsidy, employees’ loans, financial assistance, and other allowances to officers and employees, effected without formal presidential approval.

By reason of the Notice of Disallowance, the management instructed all employees to refund the amounts received by them. Incidentally, HSDC has been approved for dissolution by the President.

12. National Dairy Authority (NDA)

The COA reports an amount of P7.279 million pertaining to the payment of Healthcard insurance and Christmas giveaways to officers and employees in 2012.

NDA Management confirmed that COA has issued a Notice of Suspension for the issuance of Healthcards to its officers and employees amounting to approximately P58,000 each. NDA has explained the matter to COA and the reply is being awaited.

It should be noted that, in the Performance Agreement signed with NDA, it was stipulated that that NDA must submit and execute concrete and time-bound action plans to address the observations of COA.

13. National Development Company (NDC)

The COA reports an amount of P1.37 million pertaining to the grant of corporate package to officers and employees and P614,000 pertaining to the grant of CNA incentives without legal bases.

NDC Management says that the amounts pertained to reorganizations effected in 2003, and that they are currently retrieving supporting documents from their archives to justify the legality of the grants.

14. Batangas Land Corporation , Inc

The COA reports an amount of P16 million under the item on unauthorized compensation, bonuses and allowances for Batangas Land Corporation, which is a land-holding company of NDC and does not maintain regular employees. Our verification of its 2012 audited financial statements do not indicate any COA observation.

15. NDC-Philippine Infrastructure Corporation

The COA reports an amount of P30,000 but with no observation or comment on what it pertains to. Since NDC-PIC is a non-operational company, we have directed NDC as the mother company to coordinate with COA on the matter.

16. Manila Gas Corporation

The COA reports an amount of P281,000 pertaining to purchase of 25 Skagen watches for the centennial anniversary and 10 Landbank gift checks in the amount of P10,000 each and other Christmas expenses. Manila Gas has been formally dissolved with the expiration of its term last September 2012. Part of the dissolution process is the turn-over of findings to the proper investigating authorities when warranted.

The Philippine Daily Inquirer today published an article entitled “Return bonuses, gov’t execs told. COA issues order to 31 GOCCs.” The news item was based on a 4-month old COA report wherein it was observed that various GOCCs granted unauthorized allowances, bonuses, and benefits amounting to P2.313 billion.

GCG had actually reviewed the COA reports and discussed the findings with the GOCCs concerned (which excludes Local Water Districts and Economic Zone Authorities which are not within the jurisdiction of the Commission), and except for three GOCCs, none of the other GOCCs covered in the COA report have been issued Notices of Disallowance.

Although no final notice of disallowance has yet been issued against the GOCCs mentioned in the report, GCG required all GOCCs in their 2013 Performance Agreements to submit concrete and time-bound action plans for addressing observations from COA in order that the fitness of the members of the governing boards may already be evaluated pending the evaluation by COA and the courts on whether a Notice of Disallowance should be issued.

Nonetheless, by virtue of the PDI news item, all the GOCCs mentioned have been directed to submit to the GCG a concrete response and reply thereto within the next 24 hours. GCG will be issuing within a few days the final responses of the GOCCs and the Commission’s own evaluation for the guidance of the general public.

It should be noted that the amounts in the report cover various items that were already being granted without legal basis prior to the Aquino Administration. As the current administration has been firm on its policy of not granting post facto approvals, many of these findings have therefore been recurring in COA reports.


Contact:
Atty. Paolo E. Salvosa
(02) 328 – 2030 to 34
www.gcg.gov.ph

A stronger GCG foundation: (seated L-R) DAP-GSPDM Dean Gloria Jumamil-Mercado, GCC Raoul C. Creencia, GCG Chairman Cesar L. Villanueva and DAP President Antonio D. Kalaw, Jr. pose with the GCG executives who successfully completed the Executive Development Program.

Pasig City---To further strengthen its foundation, the newly created Governance Commission on Government-owned-and-controlled Corporations (GCG) under the leadership of Chairman Cesar L. Villanueva, sought the Development Academy of the Philippines’ (DAP) aid to create a corps of development-oriented and highly competent GCG executives capable of fulfilling the GCG’s mandate through the DAP Graduate School of Public and Development Management’s (GSPDM) Executive Development Program (EDP).

The Executive Development Program for GCG was specifically designed to equip GCG executives with strategic skills and knowledge to efficiently and effectively perform their duties which involve managing and monitoring of performance, formulation of policies, and implementing development programs for GOCCs.

EDP modules covered the following areas;
1.) Bureaucracy and the GCG
2.) Dynamics of corporate governance
3.) Service Delivery System of the corporate operations
4.) Performance management of the corporate organizations for the GOCCs
5.) Public Finance-Financial Analysis, Resource Management and Forecasting
6.) Sustainability of Corporate Organizations
7.) Strategic Planning and Development

The roster of EDP faculty included Government Corporate Counsel Raoul C. Creencia, former Civil Service Chairman Corazon Alma G. De Leon, former Presidential Adviser Francisco Raymundo Pimentel-Lukban, PUNLA SA TAO FOUNDATION Vice President and Executive Director Reuel K. Virtucio, DAP-GSPDM Dean Gloria Jumamil-Mercado, GSPDM-IPQ Director Jonas George S. Soriano, DAP Senior Fellow Gabriel Ma. J. Lopez and Government Consultant Ms. Ramonesa R. Ricardo.

The GCG Executives on July 10 presented their final papers as a requisite to completing the program. Notable members of the panel included GCG Chairman Cesar L.Villanueva, GCG Commissioners Rainier B. Butalid and Ma. Angela E. Ignacio, DAP President Antonio D. Kalaw, Jr., DAP-GSPDM Dean Gloria Jumamil-Mercado and other top-management officials of DAP and GCG.

The final papers, considered as major inputs to strategic policy development forthe commission, tackled issues such as privatization, reorganization, appointment of Board of Directors and the labor code for GOCCs.

Thirteen GCG executives successfully completed the program.

For press release and interviews :
Contact Person: Princess Umali/ Krisjuper Andreo J. Punsalan
DAP Corporate Communications Office
2F DAP Bldg., San Miguel Avenue,Ortigas Center,Pasig City
Tel. (063) 631-2171 • Fax No. (063) 632-7860
http://www.dap.edu.ph • punsalank@dap.edu.ph