MANILA,  September 21, 2004
By Marichu Villanueva - President Arroyo has accepted the resignations of the heads of two subsidiaries of the Philippine National Oil Co. (PNOC), one of the country’s largest state-run firms, which came under fire in the past days because of the high salaries of its top executives.

Presidential Spokesman Ignacio Bunye said the resignations of Rufino Bomasang and Jose Gangan, president and chief executive officer of PNOC Exploration Corp. and PNOC Petrochemical Development Corp., respectively, were "in line with the ongoing government reorganization."

Mrs. Arroyo has not yet named replacements for Bomasang and Gangan, Bunye said, adding that the resignations were part of a revamp that started with Mrs. Arroyo’s fresh term in June.

"If you will recall, presidential appointees were asked to submit courtesy resignations way before, and those who are still holding positions are... on holdover capacity," he said.

Erstwhile PNOC chief Thelmo Cunanan was recently moved to the Social Security System, replacing Bernardino Abes. Abes was named to the Government Service Insurance System, whose finances could face scrutiny by Congress for alleged losses.

Yesterday, the President swore in Reynaldo David as Development Bank of the Philippines (DBP) president and CEO. David was profusely praised by the President for taking a pay cut even before he assumed his post.

David was among 18 new presidential appointees sworn in by Mrs. Arroyo at Malacañang yesterday. He replaced Simon Paterno, who resigned in August to join Credit Suisse First Boston as managing director. David was vice chairman of Export & Industry Bank prior to joining the DBP.

Following a public uproar over excessive government salaries, Mrs. Arroyo had earlier warned that heads of government-owned or controlled corporations who disobey her order to trim their pay would be fired.

Budget Secretary Emilia Boncodin was ordered to check if the directive was being followed.

Mrs. Arroyo is struggling to rein in a burgeoning budget deficit, which economic analysts say could throw her anti-poverty program off track.

Yesterday, Sen. Manuel Villar filed a bill repealing provisions in the charters of the state-run firms to trim the salaries of their executives.

"We should always bear in mind that in entering government or public service, we have to make some sacrifices, especially in the area of remuneration. Accepting a government job because of the pay is a wrong attitude," Villar said in a statement to the media, adding that "fat paychecks" do not guarantee results.

"As we found out, most of these agencies are buried in huge financial losses and debts. So can we say we have attracted the best and brightest?" he asked.

For his part, Justice Secretary Raul Gonzalez said those who are receiving huge pay and perks may have violated the government’s ethical standard because executives of state-run firms are still public officials and especially if the companies were losing money heavily.

"It may violate the rules of morality. It is very lopsided. That may be justified if the government-owned or controlled corporation is making money," Gonzalez told reporters in an interview. "How could they be efficient managers when so many corporations are languishing and sinking us deeper into debt?"

Gonzalez did not say if his department would conduct an inquiry to determine liability.

He cited the case of cash-strapped National Power Corp., which the Arroyo administration has been having difficulty privatizing because of its huge debt. "Why are their salaries so huge? These people are feasting on the misery of the Filipino people."

Napocor denied allegations that its board members are receiving millions of pesos in "monthly perks and privileges," including the use of four helicopters and planes.

Mrs. Arroyo said last month said the Philippines was already in the midst of a fiscal crisis and introduced a drastic austerity program — including scrapping parties and gift giving by government officers and most foreign trips for government officials.

Rampant tax evasion, corruption, bloated state subsidies and protectionism have been blamed for the government’s fiscal woes.

Mrs. Arroyo had vowed to take on "entrenched interests" as well as make tough and even unpopular decisions to avoid a possible fiscal crisis.

She has reduced the number of vehicles in her security convoy as her personal contribution to her administration’s efforts to reduce fuel consumption to deal with high oil prices and the budget deficit.

However, some lawmakers think Mrs. Arroyo’s contribution is not enough.

At a press forum yesterday, Bayan Muna party-list Rep. Satur Ocampo and Makati Rep. Agapito Aquino said the pork barrel of Malacañang and other government agencies should also be abolished, not only those of lawmakers.

Public outrage over the reported questionable use of pork barrel funds by lawmakers had sparked calls for its abolition. Some congressmen reportedly have spent the money, listed in the national budget as the Priority Development Assistance Fund, to buy votes in past elections.

The pork barrel has also reportedly used in the past as bait by presidents to ensure passage of administration-backed bills in Congress.

"We advocate the removal of all pork barrel to remove the source of corruption," Ocampo said.

Aquino claims that Malacañang has many funds hidden in the budget which the President uses for patronage.

Congress has started scrutinizing the Arroyo administration’s proposed 2005 budget for such hidden funds.

Some lawmakers want Malacañang and other government agencies to get rid of their respective intelligence funding, which they claim are being misused. — With Cecille Suerte Felipe, Pia Lee-Brago

Reported by: Sol Jose Vanzi

All rights reserved