[PHOTO - President Aquino signs into a law the Government-Owned and Controlled Corporations (GOCC) Governance Act. of 2011 at Malacañang yesterday. Witnessing the signing are Senate President Juan Ponce Enrilre, (seated 2nd from left), House Speaker Feliciano Belmonte Jr. (seated right), Sen. Franklin Drilon, and other officials. Willy Perez]

MANILA, JUNE 8, 2011 (STAR) By Delon Porcalla - Malacañang said yesterday that the Government-Owned and Controlled Corporation Governance Act of 2011 that President Aquino signed into law was a “milestone and the first important law” under the current administration.

The law is a reform measure that ensures a level playing field for all government institutions.

“This is a milestone bill that the President personally considers as the first important law to be signed during his administration,” presidential spokesman Edwin Lacierda said, in reference to the newly signed Republic Act 10149.

The new law – the second law that Aquino signed after the General Appropriations Act of 2011 – provides for the rationalization of salaries and benefits of officials and employees of government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs).

“The President has already indicated that the often bloated compensations of those at the helm of GOCCs is a major factor in the unwieldiness of such institutions,” Lacierda said in a statement.

“Worse, it contributes to a culture of political transactionalism, deeming such positions as mere political currency – to be granted based on expediency and proximity to those in power, rather than on character and competence,” he added.

Lacierda said the law effectively paves the way for wider-ranging reforms in public corporations.

“From now on, there will be no more excessive, unreasonable and unnecessary perks for GOCC and GFI executives, unlike in the past,” he said.

The objective of the GOCC law is to “promote financial viability and fiscal discipline in GOCCs and strengthen the role of the state in its governance and management to make the GOCCs more responsive to the needs of public interest.”

RA 10149 covers all GOCCs, GFIs and its subsidiaries, but “excludes the Bangko Sentral ng Pilipinas, state universities and colleges, cooperatives, local water districts, economic zone authorities and research institutions.”

The law also provides for the creation of a Governance Commission for GOCCs (GCG), which shall be attached to the Office of the President and will be the “central advisory, monitoring and oversight body with authority to formulate, implement and coordinate policies.” The GCG will be composed of five members to be headed by a chairman with the rank of Cabinet secretary and two members with the rank of undersecretary who shall all be appointed by the President.

Secretaries Florencio Abad of the Department of Budget and Management and Cesar Purisima of the Department of Finance will be sitting as ex-officio members in the five-man GCG.

The GCG is authorized to evaluate the performance and determine the relevance of a GOCC, implement the reorganization, merger or streamlining of a GOCC, unless otherwise directed by the President.

The five-man supervising body will also recommend to the President the abolition or privatization of a GOCC and, upon approval, will carry out the same, “unless the President designates another agency to implement such abolition or privatization.”

“It shall also conduct compensation studies, develop and recommend to the President a competitive compensation and remuneration system which shall attract and retain talent, at the same time allow the GOCC to be financially sound and sustainable,” a provision stated.

Under the law, the “term of office of all incumbent chief executive officers and appointive members of the board of GOCCs will end by June 30 (2011), unless sooner replaced by the President.”

“However, they shall continue in office until the successors have been appointed by the President,” the law stated.

Chief News Editor: Sol Jose Vanzi

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