Press Release
August 17, 2010


The Arroyo administration failed to curb the excesses by executives of government-owned and controlled corporations (GOCCs) regarding fat paychecks, Senator Franklin Drilon said on Tuesday.

Drilon, chairman of the Senate Committee on Finance that conducted a hearing on the issue, said former President Gloria Macapagal-Arroyo neglected her power to control, monitor and supervise the excessive pay and perks enjoyed by top officials of state firms despite laws and executive issuances.

"It is not proper for these officials to be receiving excessive perks. These funds should not be at their disposal," Drilon said.

Executive Order No. 20, which mandates that hikes in state executives' pay should not exceed twice the regular pay in government, is also not being followed by some GOCCs, Budget department director Myrna Chua said.

In fact, Drilon cited that in 2009 alone, Subic Bay Metropolitan Authority Administrator Armand Arreza received a total compensation of P26.8 million, that included P100,000 in transportation allowance, P1.8 million in gasoline allowance and P5.7 million in intelligence funds.

Arreza, the "top grosser" in government, also received total compensation, including fat bonuses, of P30.3 million in 2008 and P14.5 million in 2007, Drilon said.

"In the past Malacanang tolerated it. They failed to exercise supervision either deliberately or through neglect," Drilon said.

"They have untrammeled authority to set their allowances. They have salaries and allowances that went beyond the roof. We cannot allow this to go on," he added.

The senator is pushing for a proposed legislation that will delegate to the President the authority to fix the compensation packages of government-owned corporations to "stop the abuses" on excessive allowances enjoyed by state executives.

Drilon said that the panel will include in their committee report a law authorizing the Chief Executive to determine a "reasonable" compensation package for government-owned and controlled corporations and government financial institutions.

"Clearly, there is a need for a remedial legislation in order to stop these abuses," he said.

As a matter of law, Drilon said, Congress has the authority to set compensation packages in state agencies because it appropriates funds, but this could be delegated to the President provided that reasonable standards are set by law for the exercise of the delegated authority.

The level of compensation in the private sector, the financial capacity of the GOCCs, the nature of the functions performed can be some of the standards that can be specified in the law to determine a reasonable compensation package, Drilon said.

The proposed bill will also provide that disbursements without the approval of the Budget department and the President will be considered as unauthorized and illegal.

Drilon noted that the board of directors of government corporations, financial institutions and their subsidiaries enjoy virtually exclusive control over the funds of their agencies, without regard to laws and executive issuances.

At the subsequent hearing to be called on August 24, Drilon said the committee will be calling executives of GOCCs and GFIs to discuss the substantial bonuses they have been receiving.

The next hearing will also delve on dividends the Board of Directors receive from private entities where they sit as directors, which are not reported to the Commission on Audit.

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