COMPENSATION SYSTEM FOR GOCCs APPROVED
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.
Bea Nadine V. Barte
(02) 328 – 2030 to 34